September 29, 2025 • 44 mins
TaxTalk4U.com Trucking Business & Individual Tax Planning & Updates, how tax planning effects your business. How to minimize taxes for business. Getting all your deductions. IRA, 401k, SEP retirement plans. Health Savings Plans (HSA), Medical reimbursement plans. IRS. Truck to Success for Truckers. How taxes work for independent owner-operators. Truck Driver Per diem OOIDA Truck to Success Cost per mile. Insurance, Authority, Equipment Financing, Business Plans Permits and Licensing.
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Tax Talk 4 U is broadcast live Mondays at 10AM ET and Music on W4CY Radio (www.w4cy.com) part of Talk 4 Radio (www.talk4radio.com) on the Talk 4 Media Network (www.talk4media.com). Tax Talk 4 U is viewed on Talk 4 TV (www.talk4tv.com).
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Episode Transcript
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Speaker 1 (00:00):
The topics and opinions express in the following show are
solely those of the hosts and their guests and not
those of W FOURCY Radio. It's employees are affiliates. We
make no recommendations or endorsements for radio show programs, services,
or products mentioned on air or on our web. No
liability explicitor implied shall be extended to W FOURCY Radio
or its employees are affiliates. Any questions or comments should
be directed to those show hosts. Thank you for choosing
(00:21):
W FOURCY Radio.
Speaker 2 (00:28):
Barry G. Fouler EA brings you tax talk for you
right here on W four CY Radio and Talk for TV.
As an enrolled agent and a national leader in tax
resolution as well as Trucker bookkeeping and tax planning. With
over thirty years of experience, Barry will break down taxes, bookkeeping,
(00:49):
tax planning, and tax relief for individuals and businesses just
like you. So let's have some tax talk for you
with your hosts. Barry G.
Speaker 3 (01:00):
Learned, Hey, welcome in, good morning. It's a great Monday morning,
and it's great to be here talking taxes, bookkeeping, financial
tax planning, everything that you need, not just personally for
your personal life, and your personal taxes, but also business
(01:23):
and business taxes and things you can do to save money.
And today, you know, we're talking about tax planning. You know,
people go, well, why why do we do tax planning?
Tax planning helps you save money. And you know, if
you go back to you know, we kind of talked
the other week about the federal tax code and that
you know, federal tax code started in nineteen thirteen, and
(01:45):
today that tax code is one hundred and eighty seven
times longer than it was, you know, more than a
century ago. And you know, you start dealing with things
like that, you start dealing with tax code that is
there to you to use as your advantage, your tool.
(02:05):
I mean, you know, you think about it. Tax code
is six eight hundred and seventy one pages long, and
then you add to that all the official guidance at
the IRS and the US Department of Treasury puts on you.
And now it's over seventy five thousand pages and extremely complicated.
(02:26):
Now do you think in those seventy five thousand pages
there isn't ways to lower your taxes, There isn't ways
to save money on your taxes. You know, the one
thing that I would tell you is go read it.
If you want to know everything yourself, go read it.
It's going to take you roughly fourteen weeks to read
(02:47):
that code. And that's saying you can stay awake while
you're reading it and then understand what you're reading as well.
And that's why having a good tax person is invaluable
to you, to your business, to developing the strategies. It's
going to save you money.
Speaker 2 (03:05):
Now.
Speaker 3 (03:06):
You know, I talk about taxes and bookkeeping at at
many programs around the country, and it's particularly I do
this great event coming up later this month. It's October
twenty first through the twenty third. It's in Blue Springs, Missouri.
It's called Truck to Success. So you know, if you're
(03:26):
a trucker, maybe you're a W two truck and you're
looking at to come out to become an owner operator.
Maybe you're owner operator thinking, hey, I don't want to
be leased on anymore. I want my own authority and
I want to do things. A Truck to Success is
the place to be.
Speaker 2 (03:41):
Now.
Speaker 3 (03:41):
I'm going to talk a little bit more in later sections.
So if you do know a trucker on W two
driver owner operator that's looking to do those things. Hey,
tell them call now, tell them to tune into tax
Talk for you right here in W four CY dot
com W four CY Radio and have them lessened in
because we're going to talk a little bit about truck
(04:03):
to Success here later on in this in this program.
So give a call to them and give a shout
out so that you know, they can hear a little
bit about this and maybe they can gain some knowledge
that hey, that need to be at truckt to Success.
But you know, one of the things that we we
look at when I'm talking at these different programs, we
(04:23):
talk about the most expensive mistakes that cost business owners
thousands of dollars every year. And you know what that
biggest mistake is. It's the failure to plan. You know,
you've got to have a plan. Now we're not just
talking about a business plan, we're talking about tax plans.
Speaker 2 (04:43):
You know.
Speaker 3 (04:43):
One of my favorite lines was said by William H. Renquest,
Chief Justice of the Supreme Court, and he said, there
is nothing wrong with the strategy to avoid the payment
of taxes. The Internal Revenue Code does prevent that. Now,
that came from a former Chief Justice of the Supreme Court. Now,
(05:06):
what does the Internal Revenue Code. Actually do it provides
the roadmap to avoid the payment of taxes. Yes, it
mandates you have to file a tax return. Yes, it
mandates here's what's reportable. It gives you the roadmap on
how you can get around taxes. How do you maneuver
(05:27):
in your business in your life to avoid the payment
of taxes, minimize your tax at burden. You know why
tax planning because it's the key to your financial defense. Also,
if you're doing tax planning, it's going to guarantee results,
(05:48):
that's right. What results does it guarantee? If you are
planning and doing strategies to avoid payment of taxes, legally,
the results are guaranted heed to save you money on
your taxes, that's right. Gives you guarantee. You know, we're
talking about not just income taxes, but we're also talking
(06:12):
self employment taxes. So when you are employed, you know
you're just dealing with WQ taxes and you know you're
going to use every plan that you have out there.
Now when you're self employed, you're also trying to avoid
not just the income tax out of it, but you
want to avoid the self employment tax, Social Security medicare
(06:34):
You know that adds fifteen point three percent right there
to your taxes automatically from your bottom line from your business,
So it becomes really really important to do that. You know,
we start talking about self employment taxes, you know, it
has a couple of components to it. It's social Security
and for twenty twenty five year tax two one hundred
(06:56):
and seventy six hundred of your combined wages to net earnings,
so that's at twelve point four percent. Now twenty twenty
six projected, your your wage base is going to go
all the way up to one hundred and eighty three thousand,
six hundred, so it becomes very very important. Now you
(07:16):
add to that the Medicare tax, so there's no wage
based limit on that, and it's two point nine percent
of all your self employment taxes comes expensive and then
because you're not taxed enough, if you're married filing joint
over two hundred and fifty thousand, single over two hundred thousand,
(07:38):
or married filing separate over one hundred and twenty five thousand,
you get another point nine percent Medicare tax if your
wages compensations self employment income to together with your spouse.
If you're filing joint exceed those thresholds. So you know,
when you start thinking about how we're going to start
planning for what we're doing, it has to start with,
(08:02):
especially if you're in business, how do you reduce your
self employment income to get that income down? Because where
you are in business, especially when you're self employed, is
going to dictate how much money you're going to pay
in taxes. Now you've got to use the tax go
to your strategy the best possible way.
Speaker 2 (08:26):
Now.
Speaker 3 (08:27):
I always say, you know what you're doing is you're
looking at your income and then you start your planning
and you start figuring out where you want to go.
And one of the big things you've got to start
looking at is how are you classifying the money that
you're spending Is it business expenses? And if you're missing
business expenses or you're paying expenses for your business out
(08:50):
of your personal and you're not taking the deduction, you're
losing because you lose every time you spend after tax
dollars it could have been pre tax. So you want
to move the money that you're spending today for your
business and making sure you're getting every deduction possible. You're
finding every business expense that should be written off in
(09:13):
your business to lower that business income, to reduce your
self employment taxes, social Security Medicare, and then also reduce
on top of that your federal income tax savings, savings savings.
That's what it comes down to is how do you
maximize those deductions from your gross income to reduce your
(09:38):
net income, to reduce your Social Security, Medicare, self employment taxes,
federal income taxes, state income taxes. If you're in a state,
also that it has income tax from there. So you know,
I suggest making sure you've got a good bookkeeper, you've
got a good tax preparer, and you make sure you're
(10:00):
maximizing your deductions. Now we're gonna take a quick break here.
We're gonna come back and we're going to talk more
about keys to cutting your taxes, your tax planning. Do
that right after this.
Speaker 2 (10:13):
We have only scratched the surface of today's show. Please
stand by as Barry G. Fowler will be right back
with tax talk for you. If you own the IRS
or are going through an IRS audit, don't go at
it alone. Call Taxation Solutions Tax Relief at eight eight
(10:33):
eight nine three zero one zero one six. We are
your solution for irs, debts, audits, back taxes, garnishments, leans
and levees. Whether you're an individual or business, you need
a solution and a strong, aggressive tax resolution. Don't let
(10:54):
the IRS walk all over you. Stop the IRS now
call eight eight eight nine zero one zero one six
or go to Taxation Solutions dot net now for a
free no obligation consultation. Let's get back to tax stock
(11:14):
for you with more tax stock once again. Here's your host,
Barry G. Faller.
Speaker 3 (11:22):
Hey, welcome back. We're talking about keys cutting your taxes,
tax planning, both bits and personal. You know, a lot
of this is going to be focused around business, but
we're also going to talk about personal things that you
can do in your personal life to lower those income
taxes down as well. The goal isn't getting the biggest refund.
(11:43):
You know. Yeah, you think that's fun, but realistically, all
you've done is loan money interest free to the federal government.
And so you know, if you're using tax planning and
you're using strategies to lower your income taxes down, then
you can also adjust you're with wholes as well and
file you know the new W four and lower the
(12:05):
amount they're going to withhold because it's about keeping more
money in your pocket, more money that you can save
and invest that you can earn interest on or make
money off of through investments or whatever you want to do.
It's not about loaning the government money so you get
a big refund, because it's not the government given back
giving you money, it's giving back your money. And so
(12:27):
we don't want to do that tax planning, you know,
this is what this is all about, saving you money
on your taxes because you don't remember. And I ingrain
this into people's heads. And if you're in business, you
lose every time you spend after tax dollars that could
have been pre tax, you know. And some of that
(12:49):
is true, you know, as a individual, if you have
plans available to you through the companies you work for
to put money into maybe an HSA four H one ks,
flexible spending arrangements, maybe childcare is spending where they can
pull that money out pre tax, and then you can't
(13:11):
do it, you know, I have to laugh. And I
talk about reading tax code, but I also talk about
reading other documents. When you're in business, before you sign something,
you read insame with your personal life. My father ingrained
in me that you never sign anything that you haven't read.
Then it goes with your tax return. Do you have
somebody preparing your tax return, Go through it and read it,
(13:35):
look at it, make sure the numbers are correct, because
you are signing an underpenalties of perjury. And you know,
we want to make sure that you have the opportunity
to review the taxes that you have. So yes, we
read the tax code, and we read the changes that
are done, including the changes in the nine hundred pages
that was in the one big, beautiful bill, and then
(13:58):
we make plans for our clients to make this work.
Speaker 2 (14:02):
Now.
Speaker 3 (14:02):
Amazingly enough, excuse me, amazingly enough. Some politicians have never
read the complete code. Some politicians never met a tax
that they didn't like, and many politicians just vote because
somebody in their office and staff that read it said, yes,
(14:23):
you should vote for this. Does it make it right? Now?
You know, when we talk to people, when we hear
you know, your celebrities and other people out there, you know,
everyone is always good when the tax is on someone else. However,
when you now reach that income level that you thought
it was okay to be taxed more on, you're going
(14:45):
what I didn't vote for? This. Yes, you did vote
for more tax and you get there, you have to
pay that more tax. You know, most celebrities are good
at discussing taxes and increases, but don't really want to
pay more than themselves. That's why they do. You tax Realistically,
anybody that had the money that wanted to spend and
(15:06):
pay more money into the federal government, they could just
write a check and not increase taxes. They could go
pay part of the deficit down. Love to see them
do it because it would help your kids, my kids,
my grandkids, your grandkids, and the future generations if we
would pay this debt off from the federal government. But
every politician, every celebrity, every rich person, every smart person,
(15:28):
they all have a tax plan. They all planned to
figure out how to lower those taxes down. Now in
tax Plunny, we're looking at the opportunities that came up
to us in the One Big Beautiful Bill, you know,
the one Big Beautiful building President Trump signed July fourth,
twenty twenty five. Outfitting had a wide range of provisions
(15:53):
that helped nearly every single taxpayer, including individuals, corporations, pass
through entities, tax exempt organizations, and one of the biggest
benefits was so Trump tax cuts were made permanent. We
weren't going to get back to going back to the
old law. So that meant, you know, standard deduction is
(16:15):
going to remain high. Yes, you know, oh I don't
get to take it. Call my mortgage interest and my
charitable contributions and my real estate taxes. And there may
have been some limits on some of these things, but
that standard deduction was really really high, so that's really nice.
They added in the senior deduction. Hey, it doesn't matter
whether you're taking Social Security or not. If you're aged
(16:37):
sixty five before the end of the year, you get
a six thousand dollars deduction for each individual. So if
you're married, you're both over sixty five, you both get
a six thousand dollars deduction, and it doesn't matter whether
you're already taking Sell Security or not. Now they do
have phase outs, so again it's hey, are we're finding
a way that you're going to tax the rich and
(16:57):
that phase out is at seventy five thousand and or
the phase out as one hundred and fifty see tax planning.
Reducing that income maybe from your business adds another deduction.
If you can get that business net income down below
these levels as well deferring some income using tax deferred accounts,
things like that that can bring things down. And that's
(17:18):
all the stuff you got to look at. Child tax
credits went up to twenty two hundred beginning in this year,
and then it's going to index with inflation, state and
local tax deductions. It's gone up to forty thousand, but
then it phases down to ten thousand. If you make
over five hundred thousand. Tax strategies got to come into
(17:40):
play into these things, and that's using such things as depreciation.
One big beautiful bill has depreciation in here for it.
They extended the bonus depreciation, the ability to elect one
hundred percent bonus appreciation under Section one sixty eight for
(18:01):
qualified property. I mean it could be tractors, trailers, business equipment, computers.
You name a machinery that you may need in your business,
and it's as if it's acquired after January nineteenth of
this year, you can take the bonus depreciation. So it
gives you that ability to reduce that income down. Now,
(18:26):
what this means is that one hundred percent bonus appreciation
means you are allowed to immediately deduct the full cost
of qualified property in the year it's placed into service,
rather than depreciating it over its useful life. Now there's
some disadvantages to this as well, because if you're using
(18:48):
one hundred percent bonus depreciation, you may lose some deductions
than the future that may help you. So depending on
your tax situation, your tax bracket, the year the company
does not buy any fixed assets, your taxes could end
up being much higher. So maybe you got to look
at spreading this out as well, in not using bonus appreciation.
(19:11):
How it's going to impact the future planning we're going
to plan how we're going to do this. We can
also use Section one seventy nine expensing of your assets.
The new law allows higher limits for the first year
upfront deductions on business purchases. The bill makes Section one
(19:31):
seventy nine expensing permanent, doubles the maximum deduction to two
point five million or the phase out of four million
in equipment purchases. And it's again it's only applicable to
property placed after taxable years after December thirty one, twenty
twenty four, so twenty twenty five and beyond you're going
(19:53):
to be able to do that. So we're using these
kinds of s ategies to do that and finding ways
to reduce your income to the right level. Now, when
we do this very smartly, either wather we're using Section
one seventy nine or bonus appreciation, we're going to use
(20:16):
it to the extent that it puts you in the
right marginal tax bracket, doesn't affect future years, so that
you can look at your income spread out over period
of time. And we come back, we're going to talk
about how we use entities for tax planning purposes to
save you money on your taxes via tax planning and
(20:38):
reducing that income to the right level and the lowest
amount allowed by law. And we're going to do that
right after the spring.
Speaker 2 (20:46):
We have only scratched the surface of today's show. Please
stand by as Barry chief Fauer will be right back
with tax talk for you. As an owner operator, you
already spend much time away from your family. Trucker Tax
Tools handles all your bookkeeping in taxes. No matter what
(21:06):
level trucker you are. Life on the road can be taxing,
but that doesn't mean that your wallet or time with
your family should suffer. Trucker Tax Tools makes your life
run smoothly. Go to Trucker tax Tools dot com for
a free guide that will give you the tools to
never worry about your taxes again. Call Trucker Tax Tools
(21:28):
eight seven seven nine sixty six two four seven seven
or go to Trucker tax Tools dot com now and
let the experts keep you trucking. Let's get back to
tax stock for you with more tax stock once again.
Here's your host, Barry G. Foller.
Speaker 3 (21:51):
Hey, welcome back. I hope you're enjoying this nice conversation
we're have about tax planning, reducing your taxes to the
lowest amount allowed by law. You know, we're talking about
you know, hey, where do we start? And you know,
you've got to start planning when you're in business, exactly
what your net income is going to be, what's projected
(22:13):
to be, and then kind of move and go forward
from there. Whether you're using retirement accounts or other vehicles
that you can do this. But if you're in business,
one of the biggest choices you've got to make is
bus as entity. How are you going to be set up? Now?
You know, many people start out as a DBA sole proprietorship.
(22:34):
Some people here, oh, I've got to be an LLC
limited liability company because that's a be all and all.
Because I was standing and talking to somebody else that's
in business, and that's what they told me I should do.
Some say, hey, I should be a corporation escorp, or
should maybe I should be a C corp. You know,
there's a lot of choices out there, and you've got
(22:57):
to sit down and visit with your pre prayer you're
consultant to determine which one's right. A DBA, bottom line,
you're going to be taxed, self employment tax on the
bottom line, federal income tax. All that's going to compound.
But does it make it right to move into an LLC. Well,
(23:17):
an LLC is going to be really no better than
a DBA as far as tax goes when you're a
sole member, unless you make the election to become an escort.
But then that could get expensive for you. So where
is it going to make sense and at what level
does it make sense? Well, where it makes sense is
(23:38):
you got to look at the costs the savings for
you to be an es court versus a soul proprietor.
The difference in the taxes and the difference in the costs. Now,
as an LLC, you might be a multi member LLC
and can file a partnership return, but again it has
the cost of filing that return. So what do we
(23:59):
discuss with our clients. We do a complete analysis with
our clients to determine. Hey, if you become an escort
or a multi member LLC husband and wife, let's say,
what's the difference in the costs. Well, if you become
an escort, you've got to have the ESCORP return done
and you've got to have payroll services, So that cost
(24:21):
is going to cost that's going to cost you money
to have those things done. So your savings when you
become an escort really comes down to is how much
in my saving via self employment tax? So if your
self employment tax is still going to be around the same,
then why be an escort to go through all the
(24:42):
extra paperwork that needs to be done? Or maybe why
does it require you to become a partnership because it
requires additional paperwork to be done. So this is where
our analysis comes in. If you set a reasonable salary,
because as an escort or as a partnership, any business
owner working within the business has to be paid what
(25:04):
they consider to be a reasonable salary for their work
they can be done. Now, what is a reasonable salary.
You've got to look at what work you're doing. Some
of it may be administrative, so may you may be
the janitor, and some may be the real high levels
CFO CEO, chairman of the board, and you should be
paid accordingly. Some of it may be mid level work.
(25:28):
You've got to analyze what you do with your day
and determine what those pay rates would be to determine
what a reasonable salary for you in your business should be.
And then once we get from there, then we can
determine along with you what you should be paid and
(25:48):
how you should be paid. And that's the fun part.
We get into doing that and we get into figuring
out how we're going to save you money on your taxes. Now,
other things that you're going to be missing is maybe
you're missing medical benefits. You know, healthcare costs have gone
(26:10):
through the roof, so you know, maybe it's binding a
way as a business entity that you can take the
deduction for healthcare. So you know, if you're running a
business and the only people working on it in the
business is you, and maybe you hire your your spouse,
(26:30):
and you could give benefits to your spouse. Maybe you're
running a partnership. If your spouse is less than a
five percent owner in the business, hire them. You can
give them benefits. If you're an escorp and your spouse
is less than two percent, then you can hire the spouse.
(26:52):
If you're a c corp, you can hire yourself and
give medical benefits. And you can even have medical reimbursement plans.
So there's really kind of cool things. Now, if you
start hiring other people, your plan has to be non
discrimination and must cover all eligible employees. However, you can
exclude those that are under age twenty five, work less
(27:15):
than thirty five hours a week, less than nine months
a year, less than three years of service. But if
you've got multiple companies, then you're considered a control group
and you've got a whole new problem you've got to
go through. But if you can do this and talk
to your tax plan, don't just jump out and do this,
because you've got to read the fine print of what
(27:37):
you can do and can't do. But you can have
a medical reimbursement for yourself, for your spouse, for your dependence,
not subject to the ten percent floor. It can avoid
self employment tax and supplements your spouse's coverage as well,
so she could be working for you and qualify and
maybe she's got coverage through her other job and you supplement.
(27:59):
So it's a real nice thing that you can do.
You know, eligible expenses would be stuff like major medical,
long term care, meta gap, dental vision, chiropractic, brasics, LASIK, fertility,
over the counter medications, and a bunch of other stuff.
The other thing you can be doing, and this includes
(28:21):
if you've got a medical plan that qualifies, you can
use an HSA even if your employer doesn't offer it,
but it's a high deductible plan that qualifies for an HSA,
you can do a Health Savings Account HSA. It gives
you tax deductible savings. You can contribute up to almost
(28:44):
eight thousand dollars a year for family about four thousand
for individuals. Account can continue to grow tax free and
guess what, tax free withdrawals for qualified expenses. Now, this
is not a user or to lose it account. It's
not like some of these flexible spending arrangements that you have.
(29:04):
You can use this to put money aside, and if
you don't use it then if you don't, sorry about that.
Forgot to turn my ringer off on my phone before
we started this program, So we're going to do that
here real quick. For this person calls me back again.
Another scam call though. So it's a great way to
(29:24):
put money aside every single year and then that account
grows tax free. Most health savings accounts HSA's like HSA
Bank and some of the other ones allow you to
do investments, so you can invest in mutual funds and
then money would grow accordingly. Again, it's something that's another
(29:47):
investment you kind of got to watch because you don't
want to see it lose money on that as well.
So you've got to take a look at these things
and find ways to do it. Now. The other things
that we tell people to do is we look at
retirement accounts. Now, there are all kinds of different retirement
(30:10):
accounts for you. If you're a business owner, you have
multiple options. If you're an employee, most of the time,
if you have retirement accounts available to you, it's your
four to oh one k.
Speaker 2 (30:23):
Now.
Speaker 3 (30:23):
I tell people, and especially new young people that come
out of college or maybe you just got to high
school and you go and you start working. First thing
I tell them is, if your employer is matching, make
sure you contribute at least every dollar they're going to match.
If they're not matching, maximize what you put in any
(30:43):
way into your four to oh one K that the
company is offering, and then never look at it. Why
do I say this, Well, because it's kind of like taxes.
If you're a W two employee, you never feel the
money that they pull out of your paycheck after the
first paycheck. Yes, when you get your first paycheck. If
you're like my daughter, her first paycheck that she got
(31:06):
working her job, she looked at this and called me up, dad.
They'd taken this much money out in taxes. Yes, I
understand that. Why why so much? Well, you got to
start paying into Social Security and you've got federal withholding.
Luckily we live in the state. There's no state income TAXI.
You don't have to worry about that. God bless taxes,
(31:29):
you know. So you sit here and you say fine.
After that first conversation, she never missed a dime that's
going into Social Security and Medicare. She never felt it,
never sees it anymore. So once you get past that
first check. You start figuring out how to live within
your means. So I tell people to do that. My son,
he got out of school, took a job at a bank,
(31:51):
and he was talking to me about it. I said, no,
maximize your four to oh one K. You'll never feel it.
But Dad, our budget, I don't care what your budget
it says today. Your budget will be modified for what
your take home pay is. Plus your take home pay
will be a little bit higher than you think because
of some of the other savings it's involved. You want
to maximize those retirement plants. Now, that's the same thing
(32:14):
that goes for you as a sole proprietor a business owner.
You're going to look at the different kind of retirement plants,
your simple iras, you're simplified employee pension plans SEPs, and
your four to one case. Which one's right for you? Well,
you know each one of them has their limits, and
(32:36):
you know you have limits placed on standard iras. You
know that you can put in there. You know each
year you have limits on your four to oh one
ks and your simplified employee pension plants. Now haven't modified
this for some of the new rules that have come out,
but SEP is considered to be like a turbocharged IRA.
(32:59):
You can attribute up to twenty five percent of your
net income from your business MAX contributions right around fifty
five thousand. I think they've increased this one. But if
you do the SEP plans and stuff, you've got to
contribute for all eligible employees. If you're contributing for yourself,
(33:20):
and the contributions are directed straight to employees IRA type plan,
but there's no administration fees, you know, simple iras. In
a business you can defer up to around twelve thousand,
five hundred add another three thousand if you're age fifty
and above. That's including business match or profit sharing, and
(33:42):
you contribute to an IRA and again no annual fees.
Your four oh one K is a little bit more
complicated one and you're going to defer up to one
hundred percent of your income up to seventeen thousand, five
hundred add more. If you're over fifty, your employer contributes
up to twenty five percent of covered com MAX contribution
(34:02):
fifty two thousand. But it does have loans hardship withdrawals, rollovers,
and it does have some simplified administration, but does have
fees so that you can use retirement burned. Hey'm running
over here. I've got to tell you a quick break,
and I promised that I was going to talk about
truck to Success. I have got to get to truck
(34:22):
to Success. We're going to talk about the truckers and
why you should go to truck to Success put on
by Old Idea and Oh Ideas Foundation. We're gonna do
that right after this break.
Speaker 2 (34:34):
We have only scratched the surface of today's show. Please
stand by as Barry G. Fowler will be right back
with tax talk for you as an owner operator. You
already spend too much time away from your family. Stop
spending time doing paperwork. Go to Trucker tax tools dot com,
(34:55):
a solution built specifically for truckers. Trucker tax tools dot Com.
Your life runs smoothly. Let's get back to tax stock
for you with more tax stock once again. Here's your host,
Barry G.
Speaker 3 (35:12):
Faller and a short time we've got this program. You know,
time flies when we're having fun, and you know I
promise to talk about Old Ida Truck to Success, and
you know it's coming up here really soon. Deadline to
register is just around the corner. You know, if you're
(35:33):
coming in person, you've got to sign up by October first,
so just a couple of days away. They do extend
the deadline if it's by zoom to October twentieth. But hey,
if if you are an owner operator truck driver going
to become one, or looking to become one, or maybe
you're an owner operator and you're just looking to improve
(35:54):
your business, then you should really consider o IDAs Truck
to Success Seminar. It's three days October twenty first to
the twenty third in Blue Springs, Missouri. It features Old
Ida's staff and then other trusted experts come in and
(36:15):
talk as well, especially like myself. I get to talk
about bookkeeping, taxes, at least purchase business entities. And this
whole thing is a fantastic seminar, having business experts available
(36:36):
to you to talk to, and not just Old Idea staff,
but like me, I am there to have discussions with
you outside of the classroom, even in the evenings in
the lobby, I sit and talk and allow you guys
to ask whatever questions you want so that you can
be better at what you do. I mean, Old Idea
(36:57):
comes in and they start talking about developing a business plan.
Business plans that you know help you start planning for
success in your business. And every business should have a
business plan. You know, we talk about over ninety percent
of businesses fail within their first year, primarily due to
(37:19):
lack of planning. You've got to do your homework to
be in business, and this is a critical first step
and go to old idea truck to success, and that
becomes your first step in the step in the right
direction to making sure you got the right plan. Hey,
even if you spend the money and you decide you
don't want to go out and become an owner operator
(37:39):
or you don't want to be anything, but maybe least
on at least you've learned from this and prevented sometimes
those mistakes. They talk about equipment and equipment financing. You know,
new trucks use trucks. Should I finance? Should I do
at least purchase residual leases, operating leases, capital leases? How
(38:04):
do those things work within your business? They talk about
the different types of insurance that you have some insurances
that it's required by the Federal Moto Carrier Safety Associate Administration,
and then how other insurance would work with you having
maybe your authority or maybe if you're leased on, maybe
(38:27):
you don't need it. They have it part of your lease.
Your carrier could be responsible for having your insurance. Now
they may charge you for it. But then again, maybe
you want some personal liability insurance as well, see because
kind of whoever holds that insurance is the one that
has the most interest in it. Sometimes personal liability insurance
(38:48):
goes well with whatever your carrier may be putting as
well out there. And then insurance costs can vary greatly
depending on where you're going, what you're hauling, things like that.
So you've got to look at all that and then
own authority. You know, there's a lot of pros and
cons to operating under your own authority or leasing onto
(39:12):
a carrier. You know, leasing on for a specific time
is usually the best first step, is what O I
DA says, And it's a good first step into becoming
an owner operator. You know, you're going to sign a
lease agreement, you're going to sign on with somebody, so
you're going to be a least carrier, least owner operator,
and so you kind of want to look at those
(39:35):
things and decide. Now, you know, you get into your
own authority and you know, you have to apply for
that through the Department of Transportation. Oh IDEA walks you
through this. It's not complicated, but it can be very confusing.
So you want to make sure you got the right
advice and the right people helping you. You know, we
even talk about you know, safety audits and compliance reviews.
(39:57):
They do not me. I'm not the expert in those things.
We talk about drug and alcohol consortiums and the requirements permits,
licensing brokers, factoring. I'm totally against factoring, but some people
need to use it, especially if you've got your own
authority and you've got to do your own collections. Sometimes
(40:18):
using factors helps you because they're the ones that are
going to send the invoice out, they're the ones that
are going to collect that invoice. Yes, they charge you
a pretty absorbent in fee, but then again, so does companies.
Like your credit card companies charge you a pretty good
fee to collect and process a credit card. So if
(40:42):
you can't afford to wait, you know, ten days, thirty days,
sixty days, ninety days, whatever it may be that your
carrier takes to pay you, factoring can be a good
way of doing it. Broker, and sometimes they keep too
much money. You really got to look at what you're
(41:03):
doing and how you're doing it. But you got to
do your due diligence behind the brokers and everything else.
And then we have the most important section of the
whole thing. Taxes in business structure. You know, you as
an independent business person, you entered into a new tax here,
and it's kind of what we talk about. How you're
(41:24):
going to pay taxes, You're estimated taxes its first year,
How you're going to estimate your revenue and your income,
What deductions are allowed and what or not? How to
read a financial statement profit and loss in the income statement,
the balance sheet, Why a statement of cash flows may
be important? What is your cost per mile? How to
(41:46):
use those financials to determine profitability, to determine what your
company may be worth. You know, knowing how to depreciate
your truck and win. What deductions you're going to as
an owner operator, whether you're under your own authority or
whether you're leased on. What else can you deduct? What
(42:07):
are we looking for? What expenses ordinary necessary business expenses,
other expenses? How do you deduct your cell phone? All
these things we get to talk about become strategically important
to you in operating your business, maximizing your profit and
minimizing your taxes. Do you just don't that bring you
(42:29):
back full circle? Tax planning pure and simple. You know,
we go through in Truck to Success and we talk
about the tax code, how we use it to your advantage.
How do you fit in each of the brackets. Where
do the brackets make sense? And where are you trying
to be? Tax planning for you as a business owner,
(42:49):
as an owner operator, as a truck driver, whether you're
leased on or running your own authority. Come to Truck
to Success coming up, Go to OIDA, Go to Truck
to Success. All you got to do is type in search,
oh I d A talk to your success register be there.
Love to see you there if you're an owner operator. Hey,
(43:09):
bringing us close to an end of the show. It's
another great show that we've had. You know, next week
bring your questions be here b Square, but join us
every Monday, ten am Eastern time at tax Talk for You.
You can go to tax talkfor You dot com. Follow
us over there so you never miss this episode. You
(43:30):
can go to Facebook and follow tax Talk for You
as well. Also go to w A four c Y
dot com W four c Y Radio and you can
be at every one of these shows as well and
some other great programs that we have on W four
c Y dot com Radio. We'll see you next week
(43:52):
right back here ten am Eastern time on Tax Talk
for You again. It's tax Talk number four that are
you dot com? Be here, We'll see you next week.
Have a god bless, glorious and awesome this week.
Speaker 2 (44:07):
Are you an individual or business that wants to understand
taxes and how they affect you? Are you looking for
specific tax advice for self employed business owners and truckers.
Are you behind on taxes and your bookkeeping? Are you
dealing with the irs and ready to have some relief,
(44:27):
then you need Tax Talk for You, hosted by tax
and trucker expert Barry g. Fouer Ea. Tune in ten
am Eastern time every Monday right here on W four
CY Radio and Talk for TV. Don't forget to check
this and past episodes at tax TALKFORU dot com. See
(44:48):
you next week at W fourcy dot com
The topics and opinions express in the following show are
solely those of the hosts and their guests and not
those of W FOURCY Radio. It's employees are affiliates. We
make no recommendations or endorsements for radio show programs, services,
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liability explicitor implied shall be extended to W FOURCY Radio
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(00:21):
W FOURCY Radio.
Speaker 2 (00:28):
Barry G. Fouler EA brings you tax talk for you
right here on W four CY Radio and Talk for TV.
As an enrolled agent and a national leader in tax
resolution as well as Trucker bookkeeping and tax planning. With
over thirty years of experience, Barry will break down taxes, bookkeeping,
(00:49):
tax planning, and tax relief for individuals and businesses just
like you. So let's have some tax talk for you
with your hosts. Barry G.
Speaker 3 (01:00):
Learned, Hey, welcome in, good morning. It's a great Monday morning,
and it's great to be here talking taxes, bookkeeping, financial
tax planning, everything that you need, not just personally for
your personal life, and your personal taxes, but also business
(01:23):
and business taxes and things you can do to save money.
And today, you know, we're talking about tax planning. You know,
people go, well, why why do we do tax planning?
Tax planning helps you save money. And you know, if
you go back to you know, we kind of talked
the other week about the federal tax code and that
you know, federal tax code started in nineteen thirteen, and
(01:45):
today that tax code is one hundred and eighty seven
times longer than it was, you know, more than a
century ago. And you know, you start dealing with things
like that, you start dealing with tax code that is
there to you to use as your advantage, your tool.
(02:05):
I mean, you know, you think about it. Tax code
is six eight hundred and seventy one pages long, and
then you add to that all the official guidance at
the IRS and the US Department of Treasury puts on you.
And now it's over seventy five thousand pages and extremely complicated.
(02:26):
Now do you think in those seventy five thousand pages
there isn't ways to lower your taxes, There isn't ways
to save money on your taxes. You know, the one
thing that I would tell you is go read it.
If you want to know everything yourself, go read it.
It's going to take you roughly fourteen weeks to read
(02:47):
that code. And that's saying you can stay awake while
you're reading it and then understand what you're reading as well.
And that's why having a good tax person is invaluable
to you, to your business, to developing the strategies. It's
going to save you money.
Speaker 2 (03:05):
Now.
Speaker 3 (03:06):
You know, I talk about taxes and bookkeeping at at
many programs around the country, and it's particularly I do
this great event coming up later this month. It's October
twenty first through the twenty third. It's in Blue Springs, Missouri.
It's called Truck to Success. So you know, if you're
(03:26):
a trucker, maybe you're a W two truck and you're
looking at to come out to become an owner operator.
Maybe you're owner operator thinking, hey, I don't want to
be leased on anymore. I want my own authority and
I want to do things. A Truck to Success is
the place to be.
Speaker 2 (03:41):
Now.
Speaker 3 (03:41):
I'm going to talk a little bit more in later sections.
So if you do know a trucker on W two
driver owner operator that's looking to do those things. Hey,
tell them call now, tell them to tune into tax
Talk for you right here in W four CY dot
com W four CY Radio and have them lessened in
because we're going to talk a little bit about truck
(04:03):
to Success here later on in this in this program.
So give a call to them and give a shout
out so that you know, they can hear a little
bit about this and maybe they can gain some knowledge
that hey, that need to be at truckt to Success.
But you know, one of the things that we we
look at when I'm talking at these different programs, we
(04:23):
talk about the most expensive mistakes that cost business owners
thousands of dollars every year. And you know what that
biggest mistake is. It's the failure to plan. You know,
you've got to have a plan. Now we're not just
talking about a business plan, we're talking about tax plans.
Speaker 2 (04:43):
You know.
Speaker 3 (04:43):
One of my favorite lines was said by William H. Renquest,
Chief Justice of the Supreme Court, and he said, there
is nothing wrong with the strategy to avoid the payment
of taxes. The Internal Revenue Code does prevent that. Now,
that came from a former Chief Justice of the Supreme Court. Now,
(05:06):
what does the Internal Revenue Code. Actually do it provides
the roadmap to avoid the payment of taxes. Yes, it
mandates you have to file a tax return. Yes, it
mandates here's what's reportable. It gives you the roadmap on
how you can get around taxes. How do you maneuver
(05:27):
in your business in your life to avoid the payment
of taxes, minimize your tax at burden. You know why
tax planning because it's the key to your financial defense. Also,
if you're doing tax planning, it's going to guarantee results,
(05:48):
that's right. What results does it guarantee? If you are
planning and doing strategies to avoid payment of taxes, legally,
the results are guaranted heed to save you money on
your taxes, that's right. Gives you guarantee. You know, we're
talking about not just income taxes, but we're also talking
(06:12):
self employment taxes. So when you are employed, you know
you're just dealing with WQ taxes and you know you're
going to use every plan that you have out there.
Now when you're self employed, you're also trying to avoid
not just the income tax out of it, but you
want to avoid the self employment tax, Social Security medicare
(06:34):
You know that adds fifteen point three percent right there
to your taxes automatically from your bottom line from your business,
So it becomes really really important to do that. You know,
we start talking about self employment taxes, you know, it
has a couple of components to it. It's social Security
and for twenty twenty five year tax two one hundred
(06:56):
and seventy six hundred of your combined wages to net earnings,
so that's at twelve point four percent. Now twenty twenty
six projected, your your wage base is going to go
all the way up to one hundred and eighty three thousand,
six hundred, so it becomes very very important. Now you
(07:16):
add to that the Medicare tax, so there's no wage
based limit on that, and it's two point nine percent
of all your self employment taxes comes expensive and then
because you're not taxed enough, if you're married filing joint
over two hundred and fifty thousand, single over two hundred thousand,
(07:38):
or married filing separate over one hundred and twenty five thousand,
you get another point nine percent Medicare tax if your
wages compensations self employment income to together with your spouse.
If you're filing joint exceed those thresholds. So you know,
when you start thinking about how we're going to start
planning for what we're doing, it has to start with,
(08:02):
especially if you're in business, how do you reduce your
self employment income to get that income down? Because where
you are in business, especially when you're self employed, is
going to dictate how much money you're going to pay
in taxes. Now you've got to use the tax go
to your strategy the best possible way.
Speaker 2 (08:26):
Now.
Speaker 3 (08:27):
I always say, you know what you're doing is you're
looking at your income and then you start your planning
and you start figuring out where you want to go.
And one of the big things you've got to start
looking at is how are you classifying the money that
you're spending Is it business expenses? And if you're missing
business expenses or you're paying expenses for your business out
(08:50):
of your personal and you're not taking the deduction, you're
losing because you lose every time you spend after tax
dollars it could have been pre tax. So you want
to move the money that you're spending today for your
business and making sure you're getting every deduction possible. You're
finding every business expense that should be written off in
(09:13):
your business to lower that business income, to reduce your
self employment taxes, social Security Medicare, and then also reduce
on top of that your federal income tax savings, savings savings.
That's what it comes down to is how do you
maximize those deductions from your gross income to reduce your
(09:38):
net income, to reduce your Social Security, Medicare, self employment taxes,
federal income taxes, state income taxes. If you're in a state,
also that it has income tax from there. So you know,
I suggest making sure you've got a good bookkeeper, you've
got a good tax preparer, and you make sure you're
(10:00):
maximizing your deductions. Now we're gonna take a quick break here.
We're gonna come back and we're going to talk more
about keys to cutting your taxes, your tax planning. Do
that right after this.
Speaker 2 (10:13):
We have only scratched the surface of today's show. Please
stand by as Barry G. Fowler will be right back
with tax talk for you. If you own the IRS
or are going through an IRS audit, don't go at
it alone. Call Taxation Solutions Tax Relief at eight eight
(10:33):
eight nine three zero one zero one six. We are
your solution for irs, debts, audits, back taxes, garnishments, leans
and levees. Whether you're an individual or business, you need
a solution and a strong, aggressive tax resolution. Don't let
(10:54):
the IRS walk all over you. Stop the IRS now
call eight eight eight nine zero one zero one six
or go to Taxation Solutions dot net now for a
free no obligation consultation. Let's get back to tax stock
(11:14):
for you with more tax stock once again. Here's your host,
Barry G. Faller.
Speaker 3 (11:22):
Hey, welcome back. We're talking about keys cutting your taxes,
tax planning, both bits and personal. You know, a lot
of this is going to be focused around business, but
we're also going to talk about personal things that you
can do in your personal life to lower those income
taxes down as well. The goal isn't getting the biggest refund.
(11:43):
You know. Yeah, you think that's fun, but realistically, all
you've done is loan money interest free to the federal government.
And so you know, if you're using tax planning and
you're using strategies to lower your income taxes down, then
you can also adjust you're with wholes as well and
file you know the new W four and lower the
(12:05):
amount they're going to withhold because it's about keeping more
money in your pocket, more money that you can save
and invest that you can earn interest on or make
money off of through investments or whatever you want to do.
It's not about loaning the government money so you get
a big refund, because it's not the government given back
giving you money, it's giving back your money. And so
(12:27):
we don't want to do that tax planning, you know,
this is what this is all about, saving you money
on your taxes because you don't remember. And I ingrain
this into people's heads. And if you're in business, you
lose every time you spend after tax dollars that could
have been pre tax, you know. And some of that
(12:49):
is true, you know, as a individual, if you have
plans available to you through the companies you work for
to put money into maybe an HSA four H one ks,
flexible spending arrangements, maybe childcare is spending where they can
pull that money out pre tax, and then you can't
(13:11):
do it, you know, I have to laugh. And I
talk about reading tax code, but I also talk about
reading other documents. When you're in business, before you sign something,
you read insame with your personal life. My father ingrained
in me that you never sign anything that you haven't read.
Then it goes with your tax return. Do you have
somebody preparing your tax return, Go through it and read it,
(13:35):
look at it, make sure the numbers are correct, because
you are signing an underpenalties of perjury. And you know,
we want to make sure that you have the opportunity
to review the taxes that you have. So yes, we
read the tax code, and we read the changes that
are done, including the changes in the nine hundred pages
that was in the one big, beautiful bill, and then
(13:58):
we make plans for our clients to make this work.
Speaker 2 (14:02):
Now.
Speaker 3 (14:02):
Amazingly enough, excuse me, amazingly enough. Some politicians have never
read the complete code. Some politicians never met a tax
that they didn't like, and many politicians just vote because
somebody in their office and staff that read it said, yes,
(14:23):
you should vote for this. Does it make it right? Now?
You know, when we talk to people, when we hear
you know, your celebrities and other people out there, you know,
everyone is always good when the tax is on someone else. However,
when you now reach that income level that you thought
it was okay to be taxed more on, you're going
(14:45):
what I didn't vote for? This. Yes, you did vote
for more tax and you get there, you have to
pay that more tax. You know, most celebrities are good
at discussing taxes and increases, but don't really want to
pay more than themselves. That's why they do. You tax Realistically,
anybody that had the money that wanted to spend and
(15:06):
pay more money into the federal government, they could just
write a check and not increase taxes. They could go
pay part of the deficit down. Love to see them
do it because it would help your kids, my kids,
my grandkids, your grandkids, and the future generations if we
would pay this debt off from the federal government. But
every politician, every celebrity, every rich person, every smart person,
(15:28):
they all have a tax plan. They all planned to
figure out how to lower those taxes down. Now in
tax Plunny, we're looking at the opportunities that came up
to us in the One Big Beautiful Bill, you know,
the one Big Beautiful building President Trump signed July fourth,
twenty twenty five. Outfitting had a wide range of provisions
(15:53):
that helped nearly every single taxpayer, including individuals, corporations, pass
through entities, tax exempt organizations, and one of the biggest
benefits was so Trump tax cuts were made permanent. We
weren't going to get back to going back to the
old law. So that meant, you know, standard deduction is
(16:15):
going to remain high. Yes, you know, oh I don't
get to take it. Call my mortgage interest and my
charitable contributions and my real estate taxes. And there may
have been some limits on some of these things, but
that standard deduction was really really high, so that's really nice.
They added in the senior deduction. Hey, it doesn't matter
whether you're taking Social Security or not. If you're aged
(16:37):
sixty five before the end of the year, you get
a six thousand dollars deduction for each individual. So if
you're married, you're both over sixty five, you both get
a six thousand dollars deduction, and it doesn't matter whether
you're already taking Sell Security or not. Now they do
have phase outs, so again it's hey, are we're finding
a way that you're going to tax the rich and
(16:57):
that phase out is at seventy five thousand and or
the phase out as one hundred and fifty see tax planning.
Reducing that income maybe from your business adds another deduction.
If you can get that business net income down below
these levels as well deferring some income using tax deferred accounts,
things like that that can bring things down. And that's
(17:18):
all the stuff you got to look at. Child tax
credits went up to twenty two hundred beginning in this year,
and then it's going to index with inflation, state and
local tax deductions. It's gone up to forty thousand, but
then it phases down to ten thousand. If you make
over five hundred thousand. Tax strategies got to come into
(17:40):
play into these things, and that's using such things as depreciation.
One big beautiful bill has depreciation in here for it.
They extended the bonus depreciation, the ability to elect one
hundred percent bonus appreciation under Section one sixty eight for
(18:01):
qualified property. I mean it could be tractors, trailers, business equipment, computers.
You name a machinery that you may need in your business,
and it's as if it's acquired after January nineteenth of
this year, you can take the bonus depreciation. So it
gives you that ability to reduce that income down. Now,
(18:26):
what this means is that one hundred percent bonus appreciation
means you are allowed to immediately deduct the full cost
of qualified property in the year it's placed into service,
rather than depreciating it over its useful life. Now there's
some disadvantages to this as well, because if you're using
(18:48):
one hundred percent bonus depreciation, you may lose some deductions
than the future that may help you. So depending on
your tax situation, your tax bracket, the year the company
does not buy any fixed assets, your taxes could end
up being much higher. So maybe you got to look
at spreading this out as well, in not using bonus appreciation.
(19:11):
How it's going to impact the future planning we're going
to plan how we're going to do this. We can
also use Section one seventy nine expensing of your assets.
The new law allows higher limits for the first year
upfront deductions on business purchases. The bill makes Section one
(19:31):
seventy nine expensing permanent, doubles the maximum deduction to two
point five million or the phase out of four million
in equipment purchases. And it's again it's only applicable to
property placed after taxable years after December thirty one, twenty
twenty four, so twenty twenty five and beyond you're going
(19:53):
to be able to do that. So we're using these
kinds of s ategies to do that and finding ways
to reduce your income to the right level. Now, when
we do this very smartly, either wather we're using Section
one seventy nine or bonus appreciation, we're going to use
(20:16):
it to the extent that it puts you in the
right marginal tax bracket, doesn't affect future years, so that
you can look at your income spread out over period
of time. And we come back, we're going to talk
about how we use entities for tax planning purposes to
save you money on your taxes via tax planning and
(20:38):
reducing that income to the right level and the lowest
amount allowed by law. And we're going to do that
right after the spring.
Speaker 2 (20:46):
We have only scratched the surface of today's show. Please
stand by as Barry chief Fauer will be right back
with tax talk for you. As an owner operator, you
already spend much time away from your family. Trucker Tax
Tools handles all your bookkeeping in taxes. No matter what
(21:06):
level trucker you are. Life on the road can be taxing,
but that doesn't mean that your wallet or time with
your family should suffer. Trucker Tax Tools makes your life
run smoothly. Go to Trucker tax Tools dot com for
a free guide that will give you the tools to
never worry about your taxes again. Call Trucker Tax Tools
(21:28):
eight seven seven nine sixty six two four seven seven
or go to Trucker tax Tools dot com now and
let the experts keep you trucking. Let's get back to
tax stock for you with more tax stock once again.
Here's your host, Barry G. Foller.
Speaker 3 (21:51):
Hey, welcome back. I hope you're enjoying this nice conversation
we're have about tax planning, reducing your taxes to the
lowest amount allowed by law. You know, we're talking about
you know, hey, where do we start? And you know,
you've got to start planning when you're in business, exactly
what your net income is going to be, what's projected
(22:13):
to be, and then kind of move and go forward
from there. Whether you're using retirement accounts or other vehicles
that you can do this. But if you're in business,
one of the biggest choices you've got to make is
bus as entity. How are you going to be set up? Now?
You know, many people start out as a DBA sole proprietorship.
(22:34):
Some people here, oh, I've got to be an LLC
limited liability company because that's a be all and all.
Because I was standing and talking to somebody else that's
in business, and that's what they told me I should do.
Some say, hey, I should be a corporation escorp, or
should maybe I should be a C corp. You know,
there's a lot of choices out there, and you've got
(22:57):
to sit down and visit with your pre prayer you're
consultant to determine which one's right. A DBA, bottom line,
you're going to be taxed, self employment tax on the
bottom line, federal income tax. All that's going to compound.
But does it make it right to move into an LLC. Well,
(23:17):
an LLC is going to be really no better than
a DBA as far as tax goes when you're a
sole member, unless you make the election to become an escort.
But then that could get expensive for you. So where
is it going to make sense and at what level
does it make sense? Well, where it makes sense is
(23:38):
you got to look at the costs the savings for
you to be an es court versus a soul proprietor.
The difference in the taxes and the difference in the costs. Now,
as an LLC, you might be a multi member LLC
and can file a partnership return, but again it has
the cost of filing that return. So what do we
(23:59):
discuss with our clients. We do a complete analysis with
our clients to determine. Hey, if you become an escort
or a multi member LLC husband and wife, let's say,
what's the difference in the costs. Well, if you become
an escort, you've got to have the ESCORP return done
and you've got to have payroll services, So that cost
(24:21):
is going to cost that's going to cost you money
to have those things done. So your savings when you
become an escort really comes down to is how much
in my saving via self employment tax? So if your
self employment tax is still going to be around the same,
then why be an escort to go through all the
(24:42):
extra paperwork that needs to be done? Or maybe why
does it require you to become a partnership because it
requires additional paperwork to be done. So this is where
our analysis comes in. If you set a reasonable salary,
because as an escort or as a partnership, any business
owner working within the business has to be paid what
(25:04):
they consider to be a reasonable salary for their work
they can be done. Now, what is a reasonable salary.
You've got to look at what work you're doing. Some
of it may be administrative, so may you may be
the janitor, and some may be the real high levels
CFO CEO, chairman of the board, and you should be
paid accordingly. Some of it may be mid level work.
(25:28):
You've got to analyze what you do with your day
and determine what those pay rates would be to determine
what a reasonable salary for you in your business should be.
And then once we get from there, then we can
determine along with you what you should be paid and
(25:48):
how you should be paid. And that's the fun part.
We get into doing that and we get into figuring
out how we're going to save you money on your taxes. Now,
other things that you're going to be missing is maybe
you're missing medical benefits. You know, healthcare costs have gone
(26:10):
through the roof, so you know, maybe it's binding a
way as a business entity that you can take the
deduction for healthcare. So you know, if you're running a
business and the only people working on it in the
business is you, and maybe you hire your your spouse,
(26:30):
and you could give benefits to your spouse. Maybe you're
running a partnership. If your spouse is less than a
five percent owner in the business, hire them. You can
give them benefits. If you're an escorp and your spouse
is less than two percent, then you can hire the spouse.
(26:52):
If you're a c corp, you can hire yourself and
give medical benefits. And you can even have medical reimbursement plans.
So there's really kind of cool things. Now, if you
start hiring other people, your plan has to be non
discrimination and must cover all eligible employees. However, you can
exclude those that are under age twenty five, work less
(27:15):
than thirty five hours a week, less than nine months
a year, less than three years of service. But if
you've got multiple companies, then you're considered a control group
and you've got a whole new problem you've got to
go through. But if you can do this and talk
to your tax plan, don't just jump out and do this,
because you've got to read the fine print of what
(27:37):
you can do and can't do. But you can have
a medical reimbursement for yourself, for your spouse, for your dependence,
not subject to the ten percent floor. It can avoid
self employment tax and supplements your spouse's coverage as well,
so she could be working for you and qualify and
maybe she's got coverage through her other job and you supplement.
(27:59):
So it's a real nice thing that you can do.
You know, eligible expenses would be stuff like major medical,
long term care, meta gap, dental vision, chiropractic, brasics, LASIK, fertility,
over the counter medications, and a bunch of other stuff.
The other thing you can be doing, and this includes
(28:21):
if you've got a medical plan that qualifies, you can
use an HSA even if your employer doesn't offer it,
but it's a high deductible plan that qualifies for an HSA,
you can do a Health Savings Account HSA. It gives
you tax deductible savings. You can contribute up to almost
(28:44):
eight thousand dollars a year for family about four thousand
for individuals. Account can continue to grow tax free and
guess what, tax free withdrawals for qualified expenses. Now, this
is not a user or to lose it account. It's
not like some of these flexible spending arrangements that you have.
(29:04):
You can use this to put money aside, and if
you don't use it then if you don't, sorry about that.
Forgot to turn my ringer off on my phone before
we started this program, So we're going to do that
here real quick. For this person calls me back again.
Another scam call though. So it's a great way to
(29:24):
put money aside every single year and then that account
grows tax free. Most health savings accounts HSA's like HSA
Bank and some of the other ones allow you to
do investments, so you can invest in mutual funds and
then money would grow accordingly. Again, it's something that's another
(29:47):
investment you kind of got to watch because you don't
want to see it lose money on that as well.
So you've got to take a look at these things
and find ways to do it. Now. The other things
that we tell people to do is we look at
retirement accounts. Now, there are all kinds of different retirement
(30:10):
accounts for you. If you're a business owner, you have
multiple options. If you're an employee, most of the time,
if you have retirement accounts available to you, it's your
four to oh one k.
Speaker 2 (30:23):
Now.
Speaker 3 (30:23):
I tell people, and especially new young people that come
out of college or maybe you just got to high
school and you go and you start working. First thing
I tell them is, if your employer is matching, make
sure you contribute at least every dollar they're going to match.
If they're not matching, maximize what you put in any
(30:43):
way into your four to oh one K that the
company is offering, and then never look at it. Why
do I say this, Well, because it's kind of like taxes.
If you're a W two employee, you never feel the
money that they pull out of your paycheck after the
first paycheck. Yes, when you get your first paycheck. If
you're like my daughter, her first paycheck that she got
(31:06):
working her job, she looked at this and called me up, dad.
They'd taken this much money out in taxes. Yes, I
understand that. Why why so much? Well, you got to
start paying into Social Security and you've got federal withholding.
Luckily we live in the state. There's no state income TAXI.
You don't have to worry about that. God bless taxes,
(31:29):
you know. So you sit here and you say fine.
After that first conversation, she never missed a dime that's
going into Social Security and Medicare. She never felt it,
never sees it anymore. So once you get past that
first check. You start figuring out how to live within
your means. So I tell people to do that. My son,
he got out of school, took a job at a bank,
(31:51):
and he was talking to me about it. I said, no,
maximize your four to oh one K. You'll never feel it.
But Dad, our budget, I don't care what your budget
it says today. Your budget will be modified for what
your take home pay is. Plus your take home pay
will be a little bit higher than you think because
of some of the other savings it's involved. You want
to maximize those retirement plants. Now, that's the same thing
(32:14):
that goes for you as a sole proprietor a business owner.
You're going to look at the different kind of retirement plants,
your simple iras, you're simplified employee pension plans SEPs, and
your four to one case. Which one's right for you? Well,
you know each one of them has their limits, and
(32:36):
you know you have limits placed on standard iras. You
know that you can put in there. You know each
year you have limits on your four to oh one
ks and your simplified employee pension plants. Now haven't modified
this for some of the new rules that have come out,
but SEP is considered to be like a turbocharged IRA.
(32:59):
You can attribute up to twenty five percent of your
net income from your business MAX contributions right around fifty
five thousand. I think they've increased this one. But if
you do the SEP plans and stuff, you've got to
contribute for all eligible employees. If you're contributing for yourself,
(33:20):
and the contributions are directed straight to employees IRA type plan,
but there's no administration fees, you know, simple iras. In
a business you can defer up to around twelve thousand,
five hundred add another three thousand if you're age fifty
and above. That's including business match or profit sharing, and
(33:42):
you contribute to an IRA and again no annual fees.
Your four oh one K is a little bit more
complicated one and you're going to defer up to one
hundred percent of your income up to seventeen thousand, five
hundred add more. If you're over fifty, your employer contributes
up to twenty five percent of covered com MAX contribution
(34:02):
fifty two thousand. But it does have loans hardship withdrawals, rollovers,
and it does have some simplified administration, but does have
fees so that you can use retirement burned. Hey'm running
over here. I've got to tell you a quick break,
and I promised that I was going to talk about
truck to Success. I have got to get to truck
(34:22):
to Success. We're going to talk about the truckers and
why you should go to truck to Success put on
by Old Idea and Oh Ideas Foundation. We're gonna do
that right after this break.
Speaker 2 (34:34):
We have only scratched the surface of today's show. Please
stand by as Barry G. Fowler will be right back
with tax talk for you as an owner operator. You
already spend too much time away from your family. Stop
spending time doing paperwork. Go to Trucker tax tools dot com,
(34:55):
a solution built specifically for truckers. Trucker tax tools dot Com.
Your life runs smoothly. Let's get back to tax stock
for you with more tax stock once again. Here's your host,
Barry G.
Speaker 3 (35:12):
Faller and a short time we've got this program. You know,
time flies when we're having fun, and you know I
promise to talk about Old Ida Truck to Success, and
you know it's coming up here really soon. Deadline to
register is just around the corner. You know, if you're
(35:33):
coming in person, you've got to sign up by October first,
so just a couple of days away. They do extend
the deadline if it's by zoom to October twentieth. But hey,
if if you are an owner operator truck driver going
to become one, or looking to become one, or maybe
you're an owner operator and you're just looking to improve
(35:54):
your business, then you should really consider o IDAs Truck
to Success Seminar. It's three days October twenty first to
the twenty third in Blue Springs, Missouri. It features Old
Ida's staff and then other trusted experts come in and
(36:15):
talk as well, especially like myself. I get to talk
about bookkeeping, taxes, at least purchase business entities. And this
whole thing is a fantastic seminar, having business experts available
(36:36):
to you to talk to, and not just Old Idea staff,
but like me, I am there to have discussions with
you outside of the classroom, even in the evenings in
the lobby, I sit and talk and allow you guys
to ask whatever questions you want so that you can
be better at what you do. I mean, Old Idea
(36:57):
comes in and they start talking about developing a business plan.
Business plans that you know help you start planning for
success in your business. And every business should have a
business plan. You know, we talk about over ninety percent
of businesses fail within their first year, primarily due to
(37:19):
lack of planning. You've got to do your homework to
be in business, and this is a critical first step
and go to old idea truck to success, and that
becomes your first step in the step in the right
direction to making sure you got the right plan. Hey,
even if you spend the money and you decide you
don't want to go out and become an owner operator
(37:39):
or you don't want to be anything, but maybe least
on at least you've learned from this and prevented sometimes
those mistakes. They talk about equipment and equipment financing. You know,
new trucks use trucks. Should I finance? Should I do
at least purchase residual leases, operating leases, capital leases? How
(38:04):
do those things work within your business? They talk about
the different types of insurance that you have some insurances
that it's required by the Federal Moto Carrier Safety Associate Administration,
and then how other insurance would work with you having
maybe your authority or maybe if you're leased on, maybe
(38:27):
you don't need it. They have it part of your lease.
Your carrier could be responsible for having your insurance. Now
they may charge you for it. But then again, maybe
you want some personal liability insurance as well, see because
kind of whoever holds that insurance is the one that
has the most interest in it. Sometimes personal liability insurance
(38:48):
goes well with whatever your carrier may be putting as
well out there. And then insurance costs can vary greatly
depending on where you're going, what you're hauling, things like that.
So you've got to look at all that and then
own authority. You know, there's a lot of pros and
cons to operating under your own authority or leasing onto
(39:12):
a carrier. You know, leasing on for a specific time
is usually the best first step, is what O I
DA says, And it's a good first step into becoming
an owner operator. You know, you're going to sign a
lease agreement, you're going to sign on with somebody, so
you're going to be a least carrier, least owner operator,
and so you kind of want to look at those
(39:35):
things and decide. Now, you know, you get into your
own authority and you know, you have to apply for
that through the Department of Transportation. Oh IDEA walks you
through this. It's not complicated, but it can be very confusing.
So you want to make sure you got the right
advice and the right people helping you. You know, we
even talk about you know, safety audits and compliance reviews.
(39:57):
They do not me. I'm not the expert in those things.
We talk about drug and alcohol consortiums and the requirements permits,
licensing brokers, factoring. I'm totally against factoring, but some people
need to use it, especially if you've got your own
authority and you've got to do your own collections. Sometimes
(40:18):
using factors helps you because they're the ones that are
going to send the invoice out, they're the ones that
are going to collect that invoice. Yes, they charge you
a pretty absorbent in fee, but then again, so does companies.
Like your credit card companies charge you a pretty good
fee to collect and process a credit card. So if
(40:42):
you can't afford to wait, you know, ten days, thirty days,
sixty days, ninety days, whatever it may be that your
carrier takes to pay you, factoring can be a good
way of doing it. Broker, and sometimes they keep too
much money. You really got to look at what you're
(41:03):
doing and how you're doing it. But you got to
do your due diligence behind the brokers and everything else.
And then we have the most important section of the
whole thing. Taxes in business structure. You know, you as
an independent business person, you entered into a new tax here,
and it's kind of what we talk about. How you're
(41:24):
going to pay taxes, You're estimated taxes its first year,
How you're going to estimate your revenue and your income,
What deductions are allowed and what or not? How to
read a financial statement profit and loss in the income statement,
the balance sheet, Why a statement of cash flows may
be important? What is your cost per mile? How to
(41:46):
use those financials to determine profitability, to determine what your
company may be worth. You know, knowing how to depreciate
your truck and win. What deductions you're going to as
an owner operator, whether you're under your own authority or
whether you're leased on. What else can you deduct? What
(42:07):
are we looking for? What expenses ordinary necessary business expenses,
other expenses? How do you deduct your cell phone? All
these things we get to talk about become strategically important
to you in operating your business, maximizing your profit and
minimizing your taxes. Do you just don't that bring you
(42:29):
back full circle? Tax planning pure and simple. You know,
we go through in Truck to Success and we talk
about the tax code, how we use it to your advantage.
How do you fit in each of the brackets. Where
do the brackets make sense? And where are you trying
to be? Tax planning for you as a business owner,
(42:49):
as an owner operator, as a truck driver, whether you're
leased on or running your own authority. Come to Truck
to Success coming up, Go to OIDA, Go to Truck
to Success. All you got to do is type in search,
oh I d A talk to your success register be there.
Love to see you there if you're an owner operator. Hey,
(43:09):
bringing us close to an end of the show. It's
another great show that we've had. You know, next week
bring your questions be here b Square, but join us
every Monday, ten am Eastern time at tax Talk for You.
You can go to tax talkfor You dot com. Follow
us over there so you never miss this episode. You
(43:30):
can go to Facebook and follow tax Talk for You
as well. Also go to w A four c Y
dot com W four c Y Radio and you can
be at every one of these shows as well and
some other great programs that we have on W four
c Y dot com Radio. We'll see you next week
(43:52):
right back here ten am Eastern time on Tax Talk
for You again. It's tax Talk number four that are
you dot com? Be here, We'll see you next week.
Have a god bless, glorious and awesome this week.
Speaker 2 (44:07):
Are you an individual or business that wants to understand
taxes and how they affect you? Are you looking for
specific tax advice for self employed business owners and truckers.
Are you behind on taxes and your bookkeeping? Are you
dealing with the irs and ready to have some relief,
(44:27):
then you need Tax Talk for You, hosted by tax
and trucker expert Barry g. Fouer Ea. Tune in ten
am Eastern time every Monday right here on W four
CY Radio and Talk for TV. Don't forget to check
this and past episodes at tax TALKFORU dot com. See
(44:48):
you next week at W fourcy dot com
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