Some of us pay the IFTA taxes quarterly. That’s not fun. Some of us pay the quarterly income taxes. That’s also not fun. Fortunately, they’re not the same month.
The trucking industry pays a lot of taxes.
- Fuel tax at the pump
- IFTA 4 times per year
I’m sure they’ll come up with more, given time.
Cutting Your Taxes
If you’re thinking about your taxes right now, you’re probably trying to figure out how to reduce them. We found this article on Kiplinger.com with a variety of suggestions that might be useful. (Just a note, the 2017 tax cuts were after this was published, so check with your accountant about which of these still apply.)
Probably the best thing you can do to reduce your taxes is to be very precise in your record-keeping. That level of organization that you know you need to do, but don’t want to? That organized. Maybe more.
Careful tracking of expenses that are tax-deductible can pay off. You have per diem rates that you can deduct. Or you can make deposits into retirement accounts or education accounts. You might even be able to buy US Savings Bonds – are those still around? Whatever you do, unless you have documentation, you can’t make the deduction. Careful tracking of your spending makes the difference. However, tracking your personal expenses and the business expenses are two different things.
Ledger, Spreadsheet, or Online App?
How you keep track of your personal expenses is up to you. There are still people out there using ledger books and keeping cash in envelopes. (Don’t knock that – it’s a great way to control spending. Just ask Dave Ramsey!) There are spreadsheets that you can use. A computer search will provide dozens of templates you can download and use for free. What the youngest truckers are doing these days might be the most interesting: online budgeting with websites like Mint.com or Prism.com.
Whatever method you choose to track your expenses, it’s just as important to be able to get those records easily. We want security, but we also have to be able to get those numbers when it’s time to report them.
Tracking Trucking Business Expenses
Is the best advice to track everything? It may be – but it can be a lot of work. That’s why the Dave Ramsey way is so successful – who wants to write down that they spent $5.83 on a coffee at Starbucks? But that’s the start of smart savings and tracking trucking business expenses. How can you do it easiest?
We recommend TruckingOffice TMS. You can easily enter your expenses as you make your purchases into our program. Then, when it’s time, you can run a report that will show your expenses per trip, per day, per month… whatever you need. Then take those reports to a knowledgeable trucking accountant who can help you cut those taxes.
What? An accountant? Don’t they cost a lot of money?
From my experience, an accountant is worth every penny I paid them. (Not only does it spare me the time and the grief of the family fights, those dollars are also tax-deductible themselves.) And when it comes to taxes and the IRS, an expert is the smart way to go. I wouldn’t settle for just any accountant. I wanted an accountant who knows the trucking industry. Ask around – you’ll find a good one. And when it’s time to meet them, with TruckingOffice, you won’t be walking in with a shoe box full of random receipts. That will save you some money too!
Try TruckingOffice today for a free trial and discover all that the right trucking management solution can do for you. You won’t even have to write it up as an expense until you’ve tested out all of our great features that will make your trucking business profitable. And then it’s deductible too!
Do you have questions about TruckingOffice TMS? Feel free to contact us at firstname.lastname@example.org for our quickest response.
Of course, all the advice given in this column is general in nature. Please consult a tax accountant who specializes in trucking.