TAXING SUBJECT

[Fkatz]

I KNOW THAT INCOME TAX IS NOT A FAVORITE OF EVERYONE, AND DEFINITELY NOT ON ANYONE'S MIND AT THE PRESENT TIME, WHEN FREIGHT IS SLOW. BUT, IN ALL, TAX TIME IS JUST AROUND THE CORNER.

NOW IS A GREAT TIME TO GET ALL YOUR INFORMATION AND RECEIPTS TOGETHER FOR FUEL, OIL, MAINTAINCE, TOLLS, MOTELS, SHOWERS, AND ALL OTHER MISC. EXPENSES THAT WERE SPENT DURING THE YEAR ON THE TRUCK.

QUESTION 1:
WHAT DO YOU USE THE LOG BOOKS FOR BESIDES FOR HOURS OF SERVICE AND D.O.T. COMPLIANCE?

ANSWER:
LOG BOOKS ARE YOUR PROOF FOR YOUR DEIM PAY DEDUCTION. THIS YEAR YOU RECEIVE $38.00 FOR TRAVEL IN U.S.AND $42.00 IN CANADA PER DAY LOGGED AWAY FROM YOUR PLACE OF ABODE. THE DEDUCTION IS NOW 60%, UP 5%, FROM 55% LAST YEAR.

QUESTION 2:
HOW DO I TAKE THE DEDUCTIONS THAT ARE ALLOWABLE FOR THE TRUCK?
ANSWER:
IF YOU OPERATE A "C,D OR E UNIT" YOU MUST TAKE ACTUAL EXPENSES, FUEL, OIL, TOLLS , DEPRECIATION-(BASED ON WHAT YOU PAID LESS TRADE IF ANY FOR TRUCK) INSURANCE PREMIUNS,ETC.
CERTAIN "C" UNITS MIGHT BE ABLE TO TAKE THE MILAGE RATE ALSO, PICK=UP OR VAN WITH 10-12 FT BOX NOT OVER 12,OOOGVW, IF OVER THAT GVW YOU MUST TAKE ACTUAL EXPENSES.
"B" UNITS CAN TAKE THE STANDARD MILEAGE DEDUCTION DEPENDING HOW IT WORKS OUT WHEN FIGURING THE EXPENSES BOTH WAYS AND TAKE THE BEST FOR YOU.

THE SITE WHERE QUESTIONS LIKE THE 2 EXAMPLES ABOVE FOR YOU TO ASK IS THE NEW TAX FORUM FOR EXPEDITERS. YOU WILL BE ANSWERED WITHIN 24-48 HOURS OR SOONER. IF IT IS A QUESTION THAT I CANNOT ANSWER, I WILL NOTIFY YOU, THAT I CANNOT GIVE YOU A TRUTHFULL ANSWER AND THAT I AM CHECKING WITH THE PROPER AUTHORITIES FOR YOU
BUT YOU WILL DEFINITELY GET ONE.

THE ADVANTAGE THAT I HAVE OVER THE NATIONAL TAX FIRMS OR ACCOUNTING FIRMS IS THAT I AM ALSO AN O/O, OWN A "B" UNIT AND HAVE A DRIVER OUT FOR ME ON MY VAN DURING TAX TIME. I WAS A COMPANY DRIVER FOR AN OTR TRUCKING COMPANY FOR 5 YEARS AND WAS ABLE TO TAKE OFF TIME TO KEEP UP WITH MY EDUCATION ON TAXATION.

SO IF YOU HAVE ANY QUESTIONS FOR ME TO ANSWER PLEASE ASK!!!!!

WE WILL BE HAPPY TO ASSIST YOU IN ANY LEGAL WAY WE POSSIBLY CAN.

 

[RichM]

I think your posts are needed and offer good advise but I have to disagree on one subject.I have always run D Units and have taken the standard mileage deduction rather than depreciation and operating costs. I did this based on my accountants advice,who previously worked for the IRS. In 1995 I was audited by the IRS and passed the audit with no problems. If you run about 100,000 miles or greater a year I have found it is more to my advantage to take the mileage deduction vs the other route..

 

[LittleBigTruck]

Each person should have their accountant work it out both ways to see which is more beneficial. I have always used actual with my D unit, but used mileage for the van.

 

[Fkatz]

Rich M. and Little Big Truck

In answer to the mileage rate on "D" units, yes! it is true that the mileage rate is the way to go but Since last year, 1999 they the IRS has been watching a little bit closer as to straight trucks using the mileage rate, When I was at the National Association of Tax Practioners tax seminiars this past July, in Crystal City, VA, just outside of DC, I spoke to a number of IRS people in reference to this question and this is what I was told.
If you put in the depreciation Sch on Form 4562 as a freightliner fl60,70, or 80. with no $$$ amount with 100% business use, and an V in listed property, plus (SL) for the type of depreication used for 3 yrs, with a life of 4 years. As a description for the the vehicle in question and use the mileage rate, then the audit trail is there for them to audit you. If you use Medium Truck, the the chances slims down a bit, but still can be audited.
I work it out both ways to see which is the better deduction that I would be able to take.
Preferably the mileage rate, always will produce a larger deduction, but, but and more but!
An other question can and will be answered in the forum,

thank you
Franklin Katz
Franks Tax & Business Service