By the time you read this article, it is going to be very close to the
tax-filing deadline. In fact if you operate as a corporation or an LLC you may
be past your deadline. I have had several calls this month from owner operators
who had formed a corporation some time during 2002 who did not realize that
their tax deadline for their corporate return was March 15th. Of course the
personal tax deadline is April 15th.

The number one most important tip I can give you on saving money on your
taxes is: GET ORGANIZED NOW! I see so many owner operators paying way too much
in tax, simply because they waited too long and then had to rush and they missed
deductions. Most tax preparers do not even know what to ask an owner operator
for when preparing their return. Which leads me to another BIG reason owner
operators pay too much in tax. They are using the local tax preparer that really
doesn’t understand their business or the industry. There are several mistakes
made on owner operator returns, that we see repeated over and over again. Things
like: depreciation figured incorrectly, meal deductions calculated improperly,
deductions such as, home office or personal vehicle mileage missed completely.
These things can literally add up to thousands of dollars in tax deductions that
YOU are missing out on.

The first thing you need to do is get organized. If you want to make sure you
are getting every deduction allowed by law, you definitely want to get a copy of
our tax organizer! There are several ways to get your free copy. You can call us
toll free at 1-866-43TRUCK that’s 1-866 438-7825 and we can fax or mail or
e-mail you a copy. You can also go to www.43truck.com to print one right from
our website. If you need more time to get organized you will need to file an
extension. We can do that over the phone or you can print the extension forms
right from our website as well.

Now some specific ideas that can help lower your tax:

• A tax break for truckers...but you must be self-employed!
  There is a
  loophole in the federal law right now that gives SUV and truck owners a great
  tax break. To give you some background, many years ago rules were written into
  law prohibiting business owners from buying luxury vehicles and then writing
  them off on their taxes. Basically, these people were buying luxury cars and
  using special depreciation rules to get taxpayers to pay for their
  transportation. That rule was done away with about 20 years ago, but one
  exception in it was left alone.
  
  Vehicles designed for construction or
  farm use were exempt. When the rule was developed, the idea of buying a luxury
  sport utility vehicle just didn’t exist. Nobody was interested. On top of the
  exempted provision, Congress passed some new tax breaks after September 11 to
  encourage businesses to build new factories and buy new equipment. But a
  provision in those breaks also makes it possible for people who own their own
  business or who are self-employed to get an SUV for next to nothing.
  
  One
  man featured in the Detroit News bought a $47,000 Ford Excursion, but he was
  able to deduct $32,000 of that amount. If he’d bought a passenger car, he would
  only be able to write off a small amount. News of this break is spreading and
  people are jumping on the bandwagon. If you’d like to see the list of vehicles
  that qualify, go to www.43truck.com.
  Not all SUVs qualify, so check the list
  and talk to your CPA first.
  
  
• Home Office Deduction:
  Many tax preparers will tell you to avoid this
  deduction because it is a red flag. Don’t listen, this is a legitimate deduction
  and does not increase your chances of an audit. If you maintain an office in
  your home you are entitled to take this deduction. The way it works is this,
  first we determine what percentage of your home you are using as office space,
  let’s say you are using 10%. Then we add up your yearly costs for things like
  rent, utilities, insurance, repairs, and maintenance. Then you get to deduct 10%
  of all of those costs. There is a page on our tax organizer that will make this
  easy for you.
  
  
• Personal Vehicle Mileage:
  You can take a tax deduction based on the
  miles you have driven your personal vehicle for business purposes. You don’t
  need receipts for the expenses, you simply need a log. The log should include,
  date, reason for the trip, and the total miles driven. This includes trips to
  your terminal or where you have to park your truck, trips for parts or repair
  work, meetings, trips to the bank or post office for business. Even trips to the
  grocery store if you are buying supplies for the truck. If you didn’t keep a log
  last year you may be able to construct one from your other documents. If you
  have a receipt for parts then you know on that day you drove to the parts store
  etc.
  
  
• The most important and effective way for you to lower last year’s tax is to
  contribute money to a retirement account. There are still a few ways for you to
  do that. If you have not filed your return you can open a traditional IRA up
  until April 15th. You may qualify to open a SEP-IRA which can be opened as late
  as Oct 15th of this year and still qualify for a tax deduction for last year.
  The strategy there would be to get your tax return completed now to see how much
  you qualify for and then pay the tax due by April 15th to avoid the penalty, but
  not file the return until you actually made the contribution, which could be as
  late as Oct 15th. The rules for IRA’s can get somewhat tricky but our office
  specializes in taxes and retirement accounts for owner operators, we can handle
  it over the phone for you.