Tax Question for drivers of owner operators.

drivingmecrazy · Dec 2, 2007

We do not own the truck, we drive for a owner -leased to Panther. This is our first tax filing- we are on a 60/40 split, we buy fuel.. owner pays fuel tax, tolls and all maintenance.
I am a little nervous, to tell you the truth we have not put back any money for taxes. Just been able to keep up our household payments. So I need some information, is it best to find accountant in the trucking buisness? How about some dedutions for drivers... our owners asked if we set up a buisness account, and they would just 1099 the buisness, instead of each team member... is this the best way to go? Any help would be very much appreciated! I heard some drivers get money back from the IRS- how did they do that???

LDB · Dec 2, 2007

recommend is John Turner. He does a show on XM every week, has a website at www.truckcpa.com and is located in Houston. It doesn't matter where you are located, he can work with you. He knows the business and will properly advise you. Don't make the mistake of going to one of the national chains just because they are inexpensive. They aren't. They will miss so many things you will lose far more than you save. I know of cases where people have paid in more than two thousand dollars because the big name tv ads place missed so much and when they had it properly redone didn't owe anything. You would probably be well served by listening to Dave Ramsey as well, plus reading his book The Total Money Makeover. Good luck to you.

Leo Bricker, 73's K5LDB
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ATeam · Dec 2, 2007

Another firm that specializes in providing tax and business services to owner-operators and drivers is American Truck Business Services. See:

http://attrucktax.com/

The busy season for tax preparers is about to begin. The sooner you contact one, the more they can focus on you without getting interrupted by all their other clients.

From what you said in your post, you are on the threshold of having some serious tax troubles, if you are not in them already. Firms like those recommended above can help you get out and stay out of trouble. Tax troubles do not go away if ignored. They only get worse. On Monday, make the calls.

jaminjim · Dec 2, 2007

All is not gloom and doom, if you owe money, you can file for an extension and not pay until Oct 15, 2008 for a small penalty, that gives you ten months to scrap up the money.

The bigger question might be " why are you just scraping by "

greg334 · Dec 2, 2007

IF you are having an issue with taxes,

DO NOT GO TO A TAX PREPARER

REPEAT

DO NOT GO TO A TAX PREPARER

Get a CPA and pay them the money to get things straight for you and then look at something like American Truck Business Services to help with the truck stuff after.

TeamCaffee · Dec 2, 2007

I hope over the past year you have kept all of your receipts. You are going to need to re-create your year and you need all the help you can find. Immediately on Monday call a good CPA and get the process started on what you are going to need to do. The price of a good CPA is going to scare you but just suck in your breath and go for it. A CPA does not come cheap.

We have used both ATBS and then left them and went to John Turner and we are very happy with the change. We would never recommend ATBS to anyone for accounting.

The Enemy · Dec 2, 2007

Greg if you don't mind me asking who do you use. Since I live close to you, over in Dearborn Heights, I was wondering if you use someone local or one of the big names. Thanks.

greg334 · Dec 2, 2007

I use a corporate CPA out of Auburn Hills who I grew up with but he does not take small clients, like me, on at all - he does the work I need as a favor to my family. I wish he would hire staff to handle trucking more, I told him there is money to be made handling things for people - especially payroll - but he is the stubborn type.

drivingmecrazy · Dec 2, 2007

Thank you ! We were recently given the Dave Ramsey book " Total money makeover"... so excited to get started ! Just confirmed we are on the right track when I got your responce. We are in our mid-forties, and it is so good to know that if we listen, and follow a program- we wont have to eat alpo caseroles when we retire! Thanks again, I will check out your tax info too.

davekc · Dec 2, 2007

Dave Ramsey provides some very good sound financial advice. Especially breaking the habit of using credit in the wrong ways.
That is the number one killer of many financially.

Davekc
owner
23 years
PantherII
EO moderator

drivingmecrazy · Dec 2, 2007

Being new to the industry ( July 07) we were not sure as we started driving what our income would be. And we are switching owners in January 08- our current split is not so great 60/40 we buy fuel- but the fuel surcharge is figured into the split- hard to make it with fuel prices- as I am sure you well know! So our new owners do the 60/40 split we buy fuel- but we will get 100 percent of F.S. No chump change there! And we have moved out of rental home- so there is big savings there, no cable, utilities ect.. So now we are on track for 08! Love the job, love Panther- we have been running hard for over a month- even weekends, (we didn't run the weekends much for a long time) So I don't really fear the tax thing- just wanted to make sure we do it smart.

Broompilot · Dec 2, 2007

RECORDS, RECORDS, RECORDS. All those reciepts you NEED THEM AND IN AN ORDER.

First year in business and just keeping your head above water to make the household payments is what you did say?

You will probably be in good shape for having to pay in little this year. So I would not Panic but its a good idea to get originized and take all of the posted advice IMM!

Now you came into this with no goal? No record keeping? No idea how you were going to make a living or if you could? The last one is yet to be determined.

This sounds all to typical of people we give advice to here, when one writes what you wrote sounds like you just got into this with the HOPE it works out or Maybee? So what will your plans be if you are making up to $100,000.00 a year some teams do accomplish this. What are your plans if your going broke? Are you gona be able to change it? How? When?

Good Luck sounds like you need it and a Mentor to boot.

themagicoen · Dec 2, 2007

Make sure you count your days outs and WHERE. That alone can make it so you have ZERO taxes. Take the advice, get a CPA - they are worth it. On a side note, I would set up a business llc asap, 1099 the business, pay your self and team member very little and take a profit share at the end, capital gains is whole lot cheaper than income tax.

davekc · Dec 2, 2007

All to often folks forget the business side of things and get too focused on the "paid tourist" aspect. That seems to be a common occurance especially with entry level folks.

Davekc
owner
23 years
PantherII
EO moderator

Tennesseahawk · Dec 2, 2007

Enemy... I'm from Dearborn Heights also. Let me ask the woman our accountant's name, as it slips my mind. His office is on Allen near Eureka. We used him for regular income taxes before I got back into expediting. Came to find out, he has numerous trucking clients, and knows his stuff. I'll send you a pm tomorrow.

-A bore is a person who opens his mouth and puts his feats in it. - Henry Ford

jasonsprouse · Dec 2, 2007

Good to see that you are making changes to cut your expenses. It doesn't do you any good to have a "job" where you are just getting by AND the income taxes aren't being paid...

I really don't think that setting up an LLC is going to make a big difference in taxes. Either you pay or the company pays, there's no way around filing or paying taxes..... In fact in some setups you will pay MORE taxes because you can be taxed at the corporate level AND the personal level. (There are different options for LLC's which change how the LLC is taxed).

I would advise you to consult a tax professional on this so that they can advise you on your own personal situation.

I can tell you that as a sole member LLC I pay more in taxes than if I operated simply as a sole proprietor. However the LLC keeps my personal assets better protected.

Crazynuff · Dec 3, 2007

>Good to see that you are making changes to cut your
>expenses. It doesn't do you any good to have a "job" where
>you are just getting by AND the income taxes aren't being
>paid...
>
>I really don't think that setting up an LLC is going to make
>a big difference in taxes. Either you pay or the company
>pays, there's no way around filing or paying taxes..... In
>fact in some setups you will pay MORE taxes because you can
>be taxed at the corporate level AND the personal level.
>(There are different options for LLC's which change how the
>LLC is taxed).
>
>I would advise you to consult a tax professional on this so
>that they can advise you on your own personal situation.
>
>I can tell you that as a sole member LLC I pay more in taxes
>than if I operated simply as a sole proprietor. However the
>LLC keeps my personal assets better protected.
An LLC will protect a fleet owner when someone driving one of his trucks is negligent but if you are an o/o in your own truck and are found negligent you can be sued personally and the LLC will not protect your personal assets . This is something to consider before forming an LLC .

Tennesseahawk · Dec 3, 2007

Thank you, Crazy! I did not know that.

-A bore is a person who opens his mouth and puts his feats in it. - Henry Ford

Crazynuff · Dec 3, 2007

Note in this link where it lists the driver as a potential defendant . They can sue you as well as the LLC . If you have a nice home , money in the bank , and other assets and the only asset the LLC has is a wrecked truck , guess what will happen , especially if the wreck was caused by a defect you should have corrected in a pre-trip or any discrepancy is found in your logs ?
http://www.hallinjurylaw.com/pa/truck.html

greg334 · Dec 3, 2007

I don't get the LLC thing for service companies, like trucking and manufactures, I think that the LLC thing should not be used for Chrysler.

There is no real protection and no way to move the money around for a reduced rate, like a dividend payout.

I think an S corp is better but if you got the right accountant, a C corp can really help you. It is all about getting the right info, getting things to help you and not listening to others who you don't pay to advice you.