Reminder of What is Not Deductible
Do-It-Yourself Repair and Maintenance
You cannot deduct your own time for working on your equipment. The benefit of doing your own repairs and maintenance is the money you save by not having to pay someone to do it for you.
Deadhead and Unpaid Miles
Another misconception concerns deadhead and unpaid miles. Many truckers think that income lost as a result of deadhead and unpaid miles is a deductible item. Unfortunately, that is not the case. Only the cost to operate the truck during that time is deductible, such as fuel, tolls, and scales.
You cannot deduct for downtime. Even though you may be waiting for a load, and can prove you’re empty and away from home, it is not an allowable deduction.
You may hear that someone has been taking these nondeductible expenses on their tax return, but the truth is they simply have not been caught. If these items appear on a tax return that gets audited, they will be disallowed and the taxpayer will be charged interest and penalties on the disallowed amounts.
Most Common Lost Deductions
Many truckers forget the small stuff, either because they are not aware of the deduction or because they don’t think the deduction is big enough to matter. Being aware of all of your deductions is a major key in reducing your taxes. Every little bit helps, and you’d be surprised how fast the little things add up.
Here are a few commonly missed deductions:
Access Fees: Internet, Qualcomm, Satellite
Administrative Fees: Bank Account Charges, ATM Fees, Check Reorder Fees
Annual Credit Card Fees
Computer Software/Software Support
Cleaning Supplies: Windex, Paper Towels
Interest (Business loans/business credit card)
Office Supplies: Pens, Pencils, Paperclips, Envelopes, Folders, Rubber Bands
Postage & Delivery Fees
Trucking/Business Related Subscriptions
Always Get Proof of Mailing to the IRS
Whenever mailing to the IRS, always get documented proof of the mailing. Send certified or registered mail with a return receipt request from the U.S. Postal Service, or a signed, dated receipt from a reputable express delivery service such as FedEx or UPS. It is always advisable when sending tax returns to mail certified mail, return receipt requested for proof you mailed the return on time, especially when mailing close to a tax deadline.
If you have not yet taken the time to get your 2010 bookkeeping in order, now is the time to get started. Do not wait until the end of the year. Once you have all your income and expense information in an organized format, you will be able to review that information to gain more insight into your business operation.
Whether you are looking at a professionally or self-prepared Profit & Loss Statement, you will have the information necessary to manage cash flow, control costs, calculate estimated tax payment requirements, and make informed business decisions. Waiting until the end of the year to gather your business records increases the odds that you will miss out on important deductions due to lost and/or misplaced records.
Your accountant can be a valuable advisor, whether he or she does your bookkeeping or periodically reviews the bookkeeping work you’ve done yourself. A good accountant can be an asset year round, providing business advice and guidance when it comes to equipment purchase, tax and retirement planning, income and expense projections, and more.
This article has been presented by MBA Tax & Bookkeeping Service, a company proud to provide Corporate/LLC filings, income tax, bookkeeping and IRS problem resolution services to truckers in all states. If you would like additional information or have questions, calls are always welcome. Contact us at 888-407-1669 or visit our website at www.mbataxhelp.com or www.mbabizservices.com.
This article is provided for informational purposes only and is not intended as legal or tax advice. Each individual business situation is different and the information contained herein is meant for general information purposes only. Specific tax and legal recommendations can only be made after an individual has consulted his or her qualified tax or legal professional.