October 13, 2025 • 45 mins
TaxTalk4U.com Trucking, Business and Taxes. What you need to know about trucking. Mistakes that cost truckers and business owners thousands. Bad or No Bookkeeping and the Most overlook Expenses to minimize taxes for business. Missing Business Expenses, Incomplete bookkeeping, Not reading your Settlement statements, Bookkeeping done by those that don’t know trucking. Bookkeeping without Balance Sheet and Profit & Loss Statement Keep it Simple principle of bookkeeping truckertaxtools.com
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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).
Tax Talk 4 U Podcast is also available on Talk 4 Media (www.talk4media.com), Talk 4 Podcasting (www.talk4podcasting.com), iHeartRadio, Amazon Music, Pandora, Spotify, Audible, and over 100 other podcast outlets.
Become a supporter of this podcast: https://www.spreaker.com/podcast/tax-talk-4-u--6333550/support.
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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 explicit or implies shall be extended to W FOURCY
Radio or it's employees are affiliates. Any questions or comments
should be directed to those show hosts. Thank you for
(00:20):
choosing W FOURCY Radio.
Speaker 2 (00:28):
Barry G.
Speaker 3 (00:28):
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.
Speaker 2 (00:58):
Barry G. Foul Or.
Speaker 4 (01:02):
Hey, good morning, and it's another great Monday to be
here talking taxes and trucking and small businesses, you name it.
Release the taxes. We're going to be talking about it
So if you've got questions, feel free to send us
some messages or jump on and let's get your questions answered.
(01:24):
Let's help you be better at what you need to
do for business and personal. To save money on taxes.
Nobody likes paying taxes, so why not despine the ways
to reduce your taxes to the lowest amount allowed to
buy law. Hey, today's a great day. You know, we're
celebrating Columbus Day. You know, in fourteen ninety two, Columbus
(01:50):
sale the ocean blue. And that's the way we always
learned it to remember, you know, when Columbus came and
discovered Americas. You know, if he hadn't been so driven
to prove that the earth was round and not flat
where you just fall off the ends, we probably America's
(02:13):
wouldn't have been discovered. Then it would have been discovered
at some point in time because of all the you know,
modernization and everything else that happened over the years. But
this great country, you know, some two hundred and some
years later was founded. So you know, that's fantastic. It's
a great day to celebrate and enjoy. You know that
(02:37):
the America's were discovered back in fourteen ninety two. But
just the same as he wanted to do discoveries and
he wanted to find ways to prove with the earth around,
we want to find ways to reduce the burden of
taxes for you especially. You know those people you know
(02:59):
in UH in business, those people that are running trucking companies.
So you know, how do you do that? How do
you find ways to save money on taxes? Well, you know,
when I go to oh Ida Owner Operator Independent Drivers
(03:20):
Association and I speak at their someone are called Truck
to Success. Normally we'd be having that coming up here
this month. They've had to cancel it because I didn't
have enough people wanting to jump out and be an
owner operator, which you know, I understand. It's a tough
business right now with fuel prices being up and that
(03:42):
load costs what you're able to charge for loads being down,
and people taking loads just to try to cover payments,
which isn't the right thing to do. You've got to
keep a fair price so that it keeps the industry afloat,
not just you. But if you're only and even you're
not paying yourself, you're just doing work just to pay
(04:03):
your note and that's it. Well, that's not keeping you
yourself afloat, that's not paying your bills. So you know,
all this has happened in the industry, and the industry
has been kind of in a decline because of that.
It's tough business to make money in being an owner operator.
So you know, I'm going to kind of give a
little bit of that session that we would do now.
(04:25):
We don't have as much time as I have when
I'm speaking at truck to success, but we want you
to be successful. Now when we talk about mistakes that
cost truckers thousands upon thousands of dollars in taxes, and
it's one of the biggest mistakes even all business owners
make is bad we're no bookkeeping. Now, can you imagine
(04:48):
running your business with bad or no bookkeeping whatsoever. You know,
if you have bad or no bookkeeping, you're missing deductible
business expenses. You know it, have incomplete bookkeeping. You know,
when you're in trucking business and maybe you're least done,
you've got settlement statements and you've got some people doing
bookkeeping that have never read a settlement statement, don't even
(05:08):
know what it is. And then if you don't read
your settlement statement, you don't know what deductions are coming
out of the gross trucking revenue that you're receiving. You're
just looking at the bottom line. You didn't look at
your insurance costs that they may have hit you. You
didn't look at chargebacks they may have hit you with.
You didn't look at what your fuel costs are. So
(05:29):
you've got to read those settlement statements right there just
to understand what money you're getting from your business. And
then you know, bookkeeper done by somebody that doesn't know
your industry, your business, trucking business. You know, we see
it all the time. And you know, when you've got
(05:50):
somebody that doesn't know the ins and outs of the
business that you're in, sometimes they're missing is very valuable deductions.
And you don't want to be in that kind of
situation where you're missing deductions because somebody doesn't know the
deductions you should be getting for your business. And then
(06:12):
we talk about bookkeeping that are done by those who
only care about their own bottom line and not about yours. See,
we take an interest in your business. We want to
see you be successful, so we kind of look at
your bottom line. What's happening. Are you increasing are you
decreasing what has been an issue. Can you compare this
(06:34):
month the last month, this month the same month last
year year to date this year, to compare it to
that same period last year, and see, this is all
the information that you can get when you have somebody
good at doing bookkeeping that helps you run your business. Now,
you know, one thing that I've seen in this industry
is there are companies that take shortcuts and they produce
(06:59):
a financial statement sort of, and it's more upon a
cash flow statement. That means you're not getting a true
profit and loss. You're getting hey, this is where cash went.
But that only helps you so much. See, good financials
has a balance sheet, has an income statement or profit
and law statement as comparisons, has a good cash flow statement.
(07:21):
So you can see all of this as a business
owner and how it makes sense of what's happening in
your business. It's your business. You've got to take a
step back periodically look at what's happening in your business.
Where's my money going? So cash flow statement is good
for that. It shows you, hey, this was our gross revenue,
(07:42):
this was the expenses that went out. This is the
cost that went out to pay for debt. Principal interest,
capital improvements, increasing if you have a business that takes inventory,
then increasing your inventory. All these things can the keys
to running your business. But having a good profit and
(08:05):
loss is what's going to help you run your business,
understand your business, and then you can go from there.
So that's kind of the big thing out there. I mean,
what you're looking at when you're looking at a profit
and loss. Of course, you're looking at your gross revenue
(08:25):
at the tip, but then you've got all your expenses
and so we kind of do things a little bit differently,
So we use the cost of service. So what's it
going to be to run your truck on the road
for every load every month? As you're going So you're
going to see our financial statements that you see a
profit and loss with. You're going to see gross trucking revenue,
(08:47):
and it may be broken down by several items. You
may have other items that come in besides the gross
trucking that you're paid for out there. Then you're going
to have your cost of service, maybe your fuel costs,
your truck maintenance, your tolls, your scales, and all your
other expenses for you to operate that truck on the road.
(09:12):
Now the centex section is going to be more of
general administrative overhead and all the other costs out there.
So you know, costs that you're going to have whether
that truck is out there running or not. Like your
insurance cost is going to be the same whether you
have that truck on the road or not. You know
you're going to have a cost for you whether it's
(09:35):
payroll or if you're an escort, or payroll for contractor
or your employees, or you may have subcontracting work and
that's going to be you know, up into the top
section that's cost of service. So these things are what's
going to become important to you to be able to
run your business and understand what's you need to do
(09:56):
to help yourself in business across the now. We want
to make it simple, so sometimes you just want to
do it yourself. You think you can save money doing it.
So what we suggest is we have a great bookkeeping system.
It's called Keep it Simple, and we're going to go
through Keeping it Simple bookkeeping.
Speaker 3 (10:16):
Right after this break, 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.
Speaker 2 (10:35):
Called Taxation Solutions Tax.
Speaker 3 (10:37):
Relief at eight eight eight nine three zero one zero
one six. We are your solution for IRS debts, audits,
back taxes.
Speaker 2 (10:48):
Garnishments, leans and levees.
Speaker 3 (10:51):
Whether you're an individual or business, you need a solution
and a strong, aggressive tax resolution. Don't let the IRS
walk all over you. Stop the IRS now call eight
eight eight nine three zero one zero one six or
go to Taxation Solutions dot net now for a free
(11:12):
no obligation consultation. Let's get back to tax talk for
you with more tax talk once again.
Speaker 2 (11:23):
Here's your host, Barry G. Fowler.
Speaker 4 (11:28):
Hey, welcome back. You know, talking trucking, talking keeping it
simple when we're talking income statements, and we're going to
get keeping it simple here in just a minute. We're
talking to income statements. I mean, we're talking about service
revenue at the top gross trucking revenue, and your bonus
is detention, maybe fuel, serve charge, things that are going
(11:49):
to be you know there in revenues and stuff. And
we had a question about cost of service. What else
could we include in cost of service? Of course you know,
we talked about fuel scales and tolls, you know, truck
maintenance death is is it really a good.
Speaker 2 (12:05):
One to have in there?
Speaker 4 (12:08):
We run a complete chart of accounts that you would
say is probably pretty extensive in that, you know, we
want to make sure that we're including every single thing
you know possible in your costs. And I mean you're
(12:28):
going to have also possibly refer fueled, broker fees, additives,
lumper escort fee, mileage charges, maybe have inspections or an
overweight fee, transit damage, subcontracted services, travel for your drivers
(12:54):
out there, especially like your subcond You know, if you're
paying subcontractors, it's going to be some contract and pay,
but you may have drivers out there and you've got
travel for them. All those things are going to be
kind of included in what we would call cost of service.
So you know, we kind of break it down whether
this moscle you can you kind of see what you're
(13:15):
spending money on in the business to keep it visible, understandable,
and readable, because what you really want to do is
make sure you've got readable financials that will help you
guide your business down the road. See you use a
GPS to get from point A to point b or.
(13:38):
Your financial statements should be your GPS to financial success
in determining exactly what you need to do or are
doing in business. Now we're going to talk about keeping
it simple. Keeping it simple means keeping it simple. You know,
save every receipt for your business. Open a separate checking
(14:01):
account for your business. So you know, you may be
a DBA and you think I can just run everything
underneath my family checking account. No, you just got too
many things going on in there. You really want to
keep it separate business personal, so that you know, Hey,
everything going through this account is my income, and everything
(14:23):
going out of this account would be towards my expenses
and everything. Hey, Kelly, great question. Would this information apply
to all businesses? Absolutely? Now, you know, when we're talking
about the financial statements we were talking about, you know
those are set up specifically around a trucking business. Now,
if you are an independent contractor in your service business,
(14:47):
you might want to set up your financial statements similar way.
Speaker 3 (14:52):
Now.
Speaker 4 (14:52):
You know, if you're in a retail or manufacturing business,
then you've got a separate sort of chart of accounts
that you would use that distinguish costly goods sold as
opposed to like cost of service that we're talking about.
So hey, I'm going to try to stay up to
date with questions as they're coming in. Frank, this is
(15:15):
another great question. If you are an owner and driver,
should we know all these things just starting out? Well,
what I would tell you to do is, Hey, give
us a call at truck or tax tools dot com.
Let us get started helping you in your trucking business
from day one, and yes, you should know this stuff
(15:37):
starting out. And when I go to speak at Oida's
Truck to Success, I'm there speaking about this to people
that are just coming out or just deciding they're going
to be in the trucking business. And so yes, we
want them to learn and understand and then give us
(16:02):
that phone call and let us help guide you through
business itself. That's why we're one of the most recommended
bookkeeping and tax companies for truckers, is because we take
and we help the truckers all down the road so
that they've guided in the right way through business. So
(16:22):
just give us a called eight seven seven nine sixty
six two four seven seven again eight seven seven nine
six six two four seven seven, and we'll get you
on our very low cost bookkeeping service so that we
can keep you and guide you down the road. So
we were talking about keeping it simple, so you know,
open that separate checking account for your business. If you've
(16:44):
become an LLC or an inc. The bank's going to
require you to have a separate checking account. I always
tell you never commingle funds. Never write checks out of
the business, or use the funds directly from the business
for personal use. You want to transfer funds from the
(17:04):
business account to the personal account for personal items, don't
ever comingle that. It becomes a real pain for you.
If you're an LC or a corporation. Our attorney friends,
and I'm not an attorney, never want to the attorney.
Don't charge legal fees. Tell me all the time you
start commingling that you lose that corporate veil. You lose
(17:25):
any protections you may have out there. We also tell
you to use a separate credit card for business expenses. Now,
if you can get a credit card in the business name.
Now you may get a fuel card, or you may
get you one of these other saving cards out there
that you use for your trucking business, and that would
(17:45):
be separate underneath the business name. But if you can't
get a separate credit card in the business name. Designate
one card that's personal that is only used for business
as well. That way you can track everything through there.
And you know, everything going through that card is purely
business and nothing else. So you want to separate that
(18:10):
and keep it separate, and it helps keep your life
a little bit simpler. You know, that's the card you're
going to go to to look for the other expenses
that you may have for the business. Get a notebook
and carry with you and pocket folders so that you
can record every receipt and you can put receipts into
(18:30):
those expanding folders and make sure you're keeping all the receipts. Now,
I tell you a lot of times make pictures of them,
because you can see those receipts these days. After a
few months man and being in the heat or whatever,
they fade away, you know, and you won't know what
it is and you'll be going to what was this for?
Especially if you've got you know, using cash or something
(18:52):
like that. You want to make sure you've got those
documented above and beyond anything else, because at least receipts
or some that's been charged on a credit card, you
can go through and make sure that you know you've
got everything tracked that way, track your loans. And I'm
going to give you a hint. Before you sign a loan,
(19:15):
or you sign a lease on a truck, or anything
else for that matter, for equipment purchases or anything else
you do in your life, read it. Read it. Ask questions.
What's the actual cost of buying this truck, what's the
interest rate, what's it costing me to do this? Look
at the cash purchase price versus what you're going to
pay over the long term. What's my buyout at the end,
(19:38):
You've got to make sure you're reading. And that's how
I stand in a soapbox and preach this to new truckers,
even people that are doing bookkeeping and taxes with us currently,
we preach this to them consistently. Read before you sign.
Even our engagement letters, we tell you to read it
before you sign it. We want you to know what's
in it. Even though we go through it tell you
(20:00):
about it. You got to read it to understand it.
As my dad always says, if you don't read, get
what you get. You can't throw a fit. At least
when you read it and you know that. Hey, I'm
agreeing to this, and it's totally understandable to me. Save
your records. Hey, we had a question from Larry how
long you keep receipts? Well, you know, IRS to tell
(20:22):
you should be keeping support for your tax return for
about seven years. Now, I'm going to tell you your
receipts aren't going to last that long. Very seldom do
I have an IRIS agent that has gone through an
audit with me that will ask for actual receipts behind things.
Unless it's a large purchase. Then you know, hey, if
it's a couple thousand dollars here, five, ten thousand, they
(20:43):
may ask for the receipt So you might want to
have pictures and put them in you know, Hey, you
can use folders in your in your phone. Those are
really nice things to do. Speaking of phone, before it rings,
I got to turn my ringer off here, but you know,
you can use file folders on your by year and
put your pictures over there for the year, so you
(21:04):
have them if you need them. So, but it's about
you know, seven years now if it's a major purchase,
and until seven years after you really you sell it,
So it could be something you keep a little bit longer,
but we work through that. I've got a few more
questions that have come up in here, and we're going
to talk more about basic keeping it simple bookkeeping or
(21:27):
your business, whether you're in trucking, whether you're a small
business out there. We want to try to find ways
to help you keep it simple. We'll answer those questions
and go through more of this right back after this.
Speaker 3 (21:39):
We have only scratched the surface of today's show. Please
stand by as Barry Chief Fowler will be right back
with tax talk for you. As an owner operator, you
already spend too much time away from your family. Trucker
Tax Tools handles all your bookkeeping and taxes.
Speaker 2 (21:59):
No matter what level trucker you are.
Speaker 3 (22:01):
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 eight seven seven nine
(22:24):
sixty six two four seven seven, or go to Trucker
tax Tools dot com now and let the.
Speaker 2 (22:30):
Experts keep you trucking.
Speaker 3 (22:35):
Let's get back to tax stock for you with more
tax stock once again.
Speaker 2 (22:40):
Here's your host, Barry G. Feller.
Speaker 4 (22:45):
Hey, welcome back. H You know, we got some other
good questions that come in.
Speaker 2 (22:50):
We'll got a.
Speaker 4 (22:50):
Couple will fill in as we're going through and talking
about bookkeeping systems, how to make it, keep it simple,
simplest way is being truck or tax tools a call
and let us get you set up in our bookkeeping.
We start as low as twenty five dollars a week
for trucking or bookkeeping. We're running some great promotions right now.
(23:12):
We have a great billboard out on Highway twelve out
in Louisiana with some great information. So hopefully if you've
seen that, call us. Call us if you've seen it,
Even if you're not going to use this for bookkeeping. Hey,
if you're out there trucking and you see the billboard,
call us, hey, just give us his thumbs up something
that says, hey, I saw the billboard and everything. But
(23:35):
we had a question for James. From James, what if
you are just about to start out in business but
don't have things set up just yet. You have to
get the separate accounts and how do you get accounts
without documentation. Well, James, if you're in a startup phase,
you're not going to have that separate account yet. So
you know, once you set up your DBA or your
(23:57):
LLC or your corporation, and then you get the employer
identification number and then you can get that checking account
in the company name. Now that being said, you're going
to possibly have expenses or you even have that account.
Now those expenses are going to be considered startup costs.
(24:19):
Now the best thing to do is track those. Maybe
do a folder says startup costs on it. And as
you're spending money, like in corporation fees, maybe you're driving
to go see a lawyer. Maybe you're doing some pre
work to determine if this is the right business for you.
You're out looking for maybe a truck, you're looking for
a location, you're looking for storage or parking, and you're driving.
(24:44):
You want to keep track of those miles, all those
business miles to and from the house and get a
log and log all those miles. Maybe you had to
buy pre supplies and stuff like that for you were
getting all set up, so you're going to want to
(25:05):
track all that.
Speaker 2 (25:06):
Now I don't.
Speaker 4 (25:07):
Recommend you buying that truck until you get the LLC,
put the LLC's name on it, or the corporation's name
on the truck, and you can start from there. That way,
you've got your eyes down and t's crossed. And then
when you go to your bookkeeper or your tax guy, Hey,
these were my startup costs, and you can total those
up and it's going to be total startup costs, and
(25:28):
then we can take the appropriate deduction for startup costs
on your taxes. So there are some limitations in that,
and it varies by year and what's happening, but we'll
be able to sit down and get that information and
be able to take those deductions. Where we go Now,
I promised, Hey, keeping it simple. Here was the example
(25:49):
I used at Truck to Success. A very basic record
keeping procedure for you as an owner operator. And you
can do this as a small business person. You know,
you buy that expanding folder, you go down to an
office supply stor you get a Stapler desktop calculator with
a registered tape. You fill out the pocket labels with
(26:11):
various categories of expenses and income, you know, such as
maintenance or meals and fuel equipment, settlements, office supplies, et cetera.
And then when you get a receipt, you just reach down,
find the right section, drop in the receipt into that pocket. Now,
at the end of every month, you take those receipts out,
(26:34):
you total them up, staple them together, put a total
on them, and now you've got total four office supplies
for the month. You've got a total for fuel for
the month. You've got your total for revenue for the month,
fuel fuel for the month. So you made it simple,
and now you can actually put it into a spreadsheet
(26:54):
and help determine what you need, what you have as
net income. So it can be that simple. Now do
I recommend doing it that way? Now you don't have
time on your hands to do this, you don't know
what you're doing. Get a good book hip heer that's
in the trucking business that doesn't, and that's something you
should start soon as possible. So, really, when I'm looking
(27:18):
at questions that come in, Jennifer asked a question, what
kind of expenses can I take as an owner operator? Well, Jennifer,
you know we talk about the most overlooked truck driver deductions,
So you know some of these things are really simple
and really easy, such as you know, fuel and truck
(27:41):
maintenance and tolls and scales. But the things that you
do sometimes missed. They may seem like small items. But remember,
if you're a small business person and you're running a
DBA and you're a soil proprietor and you're reporting on
SCHEDULEC or your single member LLC reporting on SCHEDULEC, your
bottom line of your business gets first tax at fifteen
(28:04):
point three percent social Security and Medicare. So if you grow,
if you netted one hundred thousand dollars, you're paying fifteen thousand,
three hundred dollars just in Social Security and Medicare taxes
before you get to the federal income tax side, and
only half of that fifteen point three it is deductible
for federal income tax. So every dollar you save for
(28:27):
every hundred dollars you gain and expenses saves fifteen dollars
at a minimum in your pocket plus whatever the federal
income tax. So even if you were taxed at the
lowest tax bracket, you're saving twenty five cents on every dollar,
twenty five dollars on every hundred, So it becomes important
(28:48):
to do that it's money saving items. Okay, so what
items are those association dues? You know, if you paid
to become part of the Association of Owner Operator Independent
Drivers Association, deductible your bank fees whatever the bank's charging you. Now,
I tell you to watch those bank fees. I've seen
(29:09):
bank fees higher costs than sometimes professional services out there.
So if you're running an NSS on your account and
those fees become very very high, some banks are still
charging a monthly bank charge.
Speaker 2 (29:23):
Watch that.
Speaker 4 (29:24):
Maybe you're banking at the wrong bank. Find a new bank.
It isn't going to charge it. Your cell phone or
internet plans. Now, a cell phone or cell phone plans
themselves are only deductible for what you're using for business.
So if you have a straight lines that it's just
for your business, that's one hundred percent deductible. Now if
it's a business and personal, maybe you're using at eighty twenty,
(29:46):
maybe fifty to fifty, So you got to look at
what your usage is on that phone and then in
deduct the portion that is applicable to the business. But
it is a deduction that some people overlook. Coffee pot
for the truck, deduct any certifications you need, has MATT certifications,
things like that, you're gonna be able to take that deduction. Calculator,
(30:09):
cleaning supplies for the truck. Something as simple as chains
that you need or required to have for the truck, envelopes,
your stapler. Hey, guess what professional services such as tax
and bookkeeping services. Our services are deductible, so it gives
you that additional tax deduction. Any licenses or fees that
(30:34):
you're going to incur your fire extinguisher, ice scrapers, and
people laugh about this because I'm sitting here talking about it.
But the little things that you have to replace periodically. Hey,
if it costs you ten dollars for it and you're
going to be hit at twenty five percent tax, doesn't
that money?
Speaker 2 (30:54):
Say?
Speaker 4 (30:55):
Doesn't it save you two dollars and fifty cents you
had to buy it? Anyone take the deduction for excise taxes? Hey,
road at list, I funny joke about the road outlyss
is it's paper, We all know that. But how good
is a GPS? Sometimes out in the mountains in different places,
sometimes you might need it. Most truckers that I've ever
(31:16):
talked to have a road out, liss, I carry one
in my truck. My kids go, what is this? I
taught them how to read them map that I got
a GPS. A GPS doesn't always work everywhere, and sometimes
you just need to be able to read a map
to know where you're going, where you're at, and how
to find the next exit, the next step and maybe
(31:38):
the back road that gets you around all of it
that maybe your GPS isn't going to guide you down.
We were taking a road trip and heading to Branson
and going through Arkansas. They were doing some major construction
and there was a two hour delay on the major roads.
When my wife was able to pull out the road
(31:58):
map and it and guide us using that road at
Liss to get around it all and something the GPS
did not show us. So it saved us more almost
two hours of at least sitting in that traffic. Took
us a little bit more time because it was some
back roads, but we enjoyed the back rounds. So it
was it was something fun, It was something good, and
(32:21):
it was a learning experience, you know, with the kids,
showing them how you can find the different routes to
get around things like this that are traffic oriented. Of course,
you know your fuel, and your truck operating expenses are
all deductible paper pens, envelopes, and excuse me, insurance, but
(32:45):
not life insurance. Now, you could deduct life insurance. So
maybe it's a you know, maybe you got a partner
and you need the insurance between the two of you
for bicell agreements and stuff like that. I don't recommend
that being deductible because then the proceeds from the life
and which is supposed to be taxed, so you kind
of need to avoid that portion. Interest expense is deductible,
(33:09):
but the principle is not. So if you're paying on
your truck, or you're paying on capital improvement, or you're
paying on and it's real estate or building or something,
the principle is not deductible. It comes off the loan balance.
The interest is deductible any labor your leases. Now, leases
have two categories, operating or capital. Operating is directly deductible.
(33:34):
Expense capital you capitalize the fixed asset and appreciate it,
so you don't get the lease expense. Now, a portion
at lease expense would be interest, and therefore you would
take the interest part of this as a deduction. License fees, maintenance,
and repairs, dot medical exams, safety gear, and things like
(34:01):
that are all deductible, So you want to be looking
for every kind of expense. Now we come back, we're
going to talk about other expenses. What is required by
the IRS to make an expense deductible. We'll do that
right after that.
Speaker 3 (34:18):
We have only scratched the surface of today's show. Please
stand by.
Speaker 2 (34:22):
As Barry G. Fowler will be right back with tax
talk for you.
Speaker 3 (34:29):
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 a solution filled specifically
for truckers. Trucker tax tools dot Com makes your life
run smoothly. Let's get back to tax stock for you
(34:51):
with more taxtock once again, here's your host, Barry G.
Speaker 2 (34:56):
Fowler.
Speaker 4 (34:59):
Hey, welcome back. What makes an expense deductible? According to
the I R S. In order to be deductible, it
needs to be ordinary and necessary expense for your business. Now,
all the things we've talked about are ordinary and necessary expenses. Now,
what other items can you find that you could actually
(35:22):
make become ordinary and necessary expenses? Some people don't think
about personal supplies. So not all personal supplies are considered
tax deductible. And again, you know, it's got to be
considered ordinary and necessary. They have to have a business purpose.
So here's some examples. Uniforms, see sure has my logo
(35:47):
on it and everything. It's a deductible business expense. So
we consider uniforms something that you're doing that you only
can use truck now if you knows, and stuff like that,
and wouldn't be considered ordinary and necessary. They're considered to
be personal items and isn't going to be tax deductible.
(36:08):
I guess you could put your logo in the back
pocket and maybe that works. Might be a good one
for the plumbers, gloves that you're using at the truck,
boots especially like steel toe boots that you'd be required
to wear, or something showers. Motel expense, So even though
you could probably sleep in your truck, if you've been
(36:30):
stopped at a motel and you sleep in a motel,
it would be a tax deductible item. You know, you
really have to think about it and keeping the I
R s's words and thought process, which is really hard
to do. When you start talking about the I R S.
Isn't it ordinary and necessary, isn't it. You think about
(36:52):
it that way, it's easier to decide whether or not
an item is tax deductible. Communication expenses, I mean you
may not think about you know, your cell phone and
the internet, your radio, CB radio, your truck. Also things
(37:13):
like your subscriptions to different things that you use within
the truck. Yes, you can hearr ELD and things like that,
but what about your YouTube, TV or some of the
other platforms that you may be using while you're in
the truck, or maybe have a specialized GPS that you
want to use. Those all become ordinary necessary business expenses
(37:37):
and you know, tax deductible. So those things that you'd
be able to use now some people get into factoring.
Now factoring, if you don't know what it is, is
when you take your receivables or your invoices and send
them to somebody else to collect and get the money
up front. Factoring is sometimes a hard thing to get
(38:03):
away from doing because once you get started and you're
used to getting that money right away, where some companies
pay you in maybe two weeks, three weeks, sixty ninety days,
and you can't survive waiting for an invoice to be paid,
you know, thirty sixty ninety days out, and that being
(38:24):
the case, a lot of people go in factor but
you can be able to take in deduct that factoring fee.
And these fees range anywhere from a half percent to
five percent per invoice. Sometimes they've seen them go as
high as ten percent, depending on invoice volume, clients, credit worthiness,
(38:46):
and whatever industry you may be in. And then you
know the reserves. The reserves are not deductible unless they
pull the money back to cover a claim. Maybe an
invoice wasn't paid, maybe the invoice would ended up having
to be discounted for whatever reason, so you would make
(39:07):
sure that you pulled that back as well as an expense.
So those reserves sit as an s grow or a
reserve account on the balance sheet. And then once you
receive the money, then you would be able to include
that in your income. At that point, other costs of
(39:28):
factory and you get to write off is your application fee,
maybe your check card feed wire transfer fees, and then
if there's a termination fee, all this is deductible there
for you. I've seen advantages and I'm not one a
good proponent of saying, hey you should factor, but sometimes
(39:48):
it works really well, and especially sometimes in the trucking industry,
where you can send over the information to your factor
and they will actually do the invoicing and everything for
you and get your money right away and they collect
over the period of time on thirty sixty ninety days
whatever the company's terms are paying at and it helps
(40:13):
you because you're not having to deal with the invoicing
or the collections, and sometimes that can be a total
pain while you're in business, and not just in the
trucking business, but you know, any business that's out there.
So this is kind of what we go through and
we talk about with people at truck to Success. Now
(40:37):
one of the other things we do talk about because
once you've done all this, you've gathered all these expenses
and you have it in a nice format that is readable,
you can then take a form that o Idea has
on their website, and if you go to o Ida
cost per Mile, that's what one of the forms that
(40:59):
they have out there that's on their website that has
a nice little spreadsheet that you can use to determine
what it's costing you to operate your truck per mile
out there, and that's great information everybody in business. You know,
(41:19):
I know this is specific to trucking, but you've got
to determine what is the cost of doing business, And
in trucking industry, it's as simple as knowing, you know
what is my cost? You know per mile? You know
you're going to be looking at how many loads you've run,
how many miles did you run, And you can do
(41:40):
this on a month to month basis, year to year basis,
and determine it. You're going to be able to come
in if you know your how many loads you did
and how many miles you did. You can also look
at how many empty miles you're in, so if you're
dead heading or something, you should keep track of that
as well. You can come down to your average mile
(42:00):
per gallon. With all your fuel costs for the year,
you can get to your average price per gallon. If
you've looked at the receipts and track your gallons, number
of gallons you use. You can put in how many gallons,
and then how many gallons of fuel, diesel fuel, refer
fuel so forth. Be able to determine all this and
(42:24):
then you'll be able to deduct. Then looking at all
your expenses, get down to an exact cost per mile.
So it's a great worksheet. So if you go to
like I said, you can go to an old idea
and it's easy. You just go into Google and do
a search or whatever search engine you using old idea
trucking tools cost per mile, and then you can it'll
(42:46):
get you over to that cost per mile worksheet. If
you have a problem, you can email us at info
at trucker tax Tools dot com. Again info at truck
or tax tools dot com and we'll get you over
to that cost per mile worksheet as well. Hey, it's
(43:07):
my pleasure always being here. I love answering questions from you.
If you've got questions outside of that, and just go
over to truck or tax tools dot com. Go our
contact page, send us the questions. We're more than happy
to help you. If you've got an IRS problem, we
can help you with that too at Taxation Solutions dot net.
That's Taxation Solutions dot net for tax relief. As I said,
(43:30):
I enjoy being here. Time flies when we're having fun
and we're talking taxes with you. Make sure you get
over to tax Talk for you. Tax Talk the number
four the letter you dot com subscribe over there or
follow us over there, soe you never miss an episode
and we'll be right here talking taxes every Monday on
W four c Y radio dot com. So online radio
(43:54):
connect with us, be here. Don't ever be late, because
if you're late, you're going to miss something good. Tell
your friends, tell your family, Tune in and join us
right here at tax Talk for You. Go to tax
talkfor You dot com. We'll see you next Monday, ten
am Eastern time right here at W four c RI Radio.
Have but God blessed glorious week.
Speaker 3 (44:18):
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 dirs and ready to have some relief? Then
(44:38):
you need Tax Talk for You, hosted by tax and
trucker expert Barry g.
Speaker 2 (44:44):
Fouer Ea.
Speaker 3 (44:46):
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
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The topics and opinions express in the following show are
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(00:20):
choosing W FOURCY Radio.
Speaker 2 (00:28):
Barry G.
Speaker 3 (00:28):
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.
Speaker 2 (00:58):
Barry G. Foul Or.
Speaker 4 (01:02):
Hey, good morning, and it's another great Monday to be
here talking taxes and trucking and small businesses, you name it.
Release the taxes. We're going to be talking about it
So if you've got questions, feel free to send us
some messages or jump on and let's get your questions answered.
(01:24):
Let's help you be better at what you need to
do for business and personal. To save money on taxes.
Nobody likes paying taxes, so why not despine the ways
to reduce your taxes to the lowest amount allowed to
buy law. Hey, today's a great day. You know, we're
celebrating Columbus Day. You know, in fourteen ninety two, Columbus
(01:50):
sale the ocean blue. And that's the way we always
learned it to remember, you know, when Columbus came and
discovered Americas. You know, if he hadn't been so driven
to prove that the earth was round and not flat
where you just fall off the ends, we probably America's
(02:13):
wouldn't have been discovered. Then it would have been discovered
at some point in time because of all the you know,
modernization and everything else that happened over the years. But
this great country, you know, some two hundred and some
years later was founded. So you know, that's fantastic. It's
a great day to celebrate and enjoy. You know that
(02:37):
the America's were discovered back in fourteen ninety two. But
just the same as he wanted to do discoveries and
he wanted to find ways to prove with the earth around,
we want to find ways to reduce the burden of
taxes for you especially. You know those people you know
(02:59):
in UH in business, those people that are running trucking companies.
So you know, how do you do that? How do
you find ways to save money on taxes? Well, you know,
when I go to oh Ida Owner Operator Independent Drivers
(03:20):
Association and I speak at their someone are called Truck
to Success. Normally we'd be having that coming up here
this month. They've had to cancel it because I didn't
have enough people wanting to jump out and be an
owner operator, which you know, I understand. It's a tough
business right now with fuel prices being up and that
(03:42):
load costs what you're able to charge for loads being down,
and people taking loads just to try to cover payments,
which isn't the right thing to do. You've got to
keep a fair price so that it keeps the industry afloat,
not just you. But if you're only and even you're
not paying yourself, you're just doing work just to pay
(04:03):
your note and that's it. Well, that's not keeping you
yourself afloat, that's not paying your bills. So you know,
all this has happened in the industry, and the industry
has been kind of in a decline because of that.
It's tough business to make money in being an owner operator.
So you know, I'm going to kind of give a
little bit of that session that we would do now.
(04:25):
We don't have as much time as I have when
I'm speaking at truck to success, but we want you
to be successful. Now when we talk about mistakes that
cost truckers thousands upon thousands of dollars in taxes, and
it's one of the biggest mistakes even all business owners
make is bad we're no bookkeeping. Now, can you imagine
(04:48):
running your business with bad or no bookkeeping whatsoever. You know,
if you have bad or no bookkeeping, you're missing deductible
business expenses. You know it, have incomplete bookkeeping. You know,
when you're in trucking business and maybe you're least done,
you've got settlement statements and you've got some people doing
bookkeeping that have never read a settlement statement, don't even
(05:08):
know what it is. And then if you don't read
your settlement statement, you don't know what deductions are coming
out of the gross trucking revenue that you're receiving. You're
just looking at the bottom line. You didn't look at
your insurance costs that they may have hit you. You
didn't look at chargebacks they may have hit you with.
You didn't look at what your fuel costs are. So
(05:29):
you've got to read those settlement statements right there just
to understand what money you're getting from your business. And
then you know, bookkeeper done by somebody that doesn't know
your industry, your business, trucking business. You know, we see
it all the time. And you know, when you've got
(05:50):
somebody that doesn't know the ins and outs of the
business that you're in, sometimes they're missing is very valuable deductions.
And you don't want to be in that kind of
situation where you're missing deductions because somebody doesn't know the
deductions you should be getting for your business. And then
(06:12):
we talk about bookkeeping that are done by those who
only care about their own bottom line and not about yours. See,
we take an interest in your business. We want to
see you be successful, so we kind of look at
your bottom line. What's happening. Are you increasing are you
decreasing what has been an issue. Can you compare this
(06:34):
month the last month, this month the same month last
year year to date this year, to compare it to
that same period last year, and see, this is all
the information that you can get when you have somebody
good at doing bookkeeping that helps you run your business. Now,
you know, one thing that I've seen in this industry
is there are companies that take shortcuts and they produce
(06:59):
a financial statement sort of, and it's more upon a
cash flow statement. That means you're not getting a true
profit and loss. You're getting hey, this is where cash went.
But that only helps you so much. See, good financials
has a balance sheet, has an income statement or profit
and law statement as comparisons, has a good cash flow statement.
(07:21):
So you can see all of this as a business
owner and how it makes sense of what's happening in
your business. It's your business. You've got to take a
step back periodically look at what's happening in your business.
Where's my money going? So cash flow statement is good
for that. It shows you, hey, this was our gross revenue,
(07:42):
this was the expenses that went out. This is the
cost that went out to pay for debt. Principal interest,
capital improvements, increasing if you have a business that takes inventory,
then increasing your inventory. All these things can the keys
to running your business. But having a good profit and
(08:05):
loss is what's going to help you run your business,
understand your business, and then you can go from there.
So that's kind of the big thing out there. I mean,
what you're looking at when you're looking at a profit
and loss. Of course, you're looking at your gross revenue
(08:25):
at the tip, but then you've got all your expenses
and so we kind of do things a little bit differently,
So we use the cost of service. So what's it
going to be to run your truck on the road
for every load every month? As you're going So you're
going to see our financial statements that you see a
profit and loss with. You're going to see gross trucking revenue,
(08:47):
and it may be broken down by several items. You
may have other items that come in besides the gross
trucking that you're paid for out there. Then you're going
to have your cost of service, maybe your fuel costs,
your truck maintenance, your tolls, your scales, and all your
other expenses for you to operate that truck on the road.
(09:12):
Now the centex section is going to be more of
general administrative overhead and all the other costs out there.
So you know, costs that you're going to have whether
that truck is out there running or not. Like your
insurance cost is going to be the same whether you
have that truck on the road or not. You know
you're going to have a cost for you whether it's
(09:35):
payroll or if you're an escort, or payroll for contractor
or your employees, or you may have subcontracting work and
that's going to be you know, up into the top
section that's cost of service. So these things are what's
going to become important to you to be able to
run your business and understand what's you need to do
(09:56):
to help yourself in business across the now. We want
to make it simple, so sometimes you just want to
do it yourself. You think you can save money doing it.
So what we suggest is we have a great bookkeeping system.
It's called Keep it Simple, and we're going to go
through Keeping it Simple bookkeeping.
Speaker 3 (10:16):
Right after this break, 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.
Speaker 2 (10:35):
Called Taxation Solutions Tax.
Speaker 3 (10:37):
Relief at eight eight eight nine three zero one zero
one six. We are your solution for IRS debts, audits,
back taxes.
Speaker 2 (10:48):
Garnishments, leans and levees.
Speaker 3 (10:51):
Whether you're an individual or business, you need a solution
and a strong, aggressive tax resolution. Don't let the IRS
walk all over you. Stop the IRS now call eight
eight eight nine three zero one zero one six or
go to Taxation Solutions dot net now for a free
(11:12):
no obligation consultation. Let's get back to tax talk for
you with more tax talk once again.
Speaker 2 (11:23):
Here's your host, Barry G. Fowler.
Speaker 4 (11:28):
Hey, welcome back. You know, talking trucking, talking keeping it
simple when we're talking income statements, and we're going to
get keeping it simple here in just a minute. We're
talking to income statements. I mean, we're talking about service
revenue at the top gross trucking revenue, and your bonus
is detention, maybe fuel, serve charge, things that are going
(11:49):
to be you know there in revenues and stuff. And
we had a question about cost of service. What else
could we include in cost of service? Of course you know,
we talked about fuel scales and tolls, you know, truck
maintenance death is is it really a good.
Speaker 2 (12:05):
One to have in there?
Speaker 4 (12:08):
We run a complete chart of accounts that you would
say is probably pretty extensive in that, you know, we
want to make sure that we're including every single thing
you know possible in your costs. And I mean you're
(12:28):
going to have also possibly refer fueled, broker fees, additives,
lumper escort fee, mileage charges, maybe have inspections or an
overweight fee, transit damage, subcontracted services, travel for your drivers
(12:54):
out there, especially like your subcond You know, if you're
paying subcontractors, it's going to be some contract and pay,
but you may have drivers out there and you've got
travel for them. All those things are going to be
kind of included in what we would call cost of service.
So you know, we kind of break it down whether
this moscle you can you kind of see what you're
(13:15):
spending money on in the business to keep it visible, understandable,
and readable, because what you really want to do is
make sure you've got readable financials that will help you
guide your business down the road. See you use a
GPS to get from point A to point b or.
(13:38):
Your financial statements should be your GPS to financial success
in determining exactly what you need to do or are
doing in business. Now we're going to talk about keeping
it simple. Keeping it simple means keeping it simple. You know,
save every receipt for your business. Open a separate checking
(14:01):
account for your business. So you know, you may be
a DBA and you think I can just run everything
underneath my family checking account. No, you just got too
many things going on in there. You really want to
keep it separate business personal, so that you know, Hey,
everything going through this account is my income, and everything
(14:23):
going out of this account would be towards my expenses
and everything. Hey, Kelly, great question. Would this information apply
to all businesses? Absolutely? Now, you know, when we're talking
about the financial statements we were talking about, you know
those are set up specifically around a trucking business. Now,
if you are an independent contractor in your service business,
(14:47):
you might want to set up your financial statements similar way.
Speaker 3 (14:52):
Now.
Speaker 4 (14:52):
You know, if you're in a retail or manufacturing business,
then you've got a separate sort of chart of accounts
that you would use that distinguish costly goods sold as
opposed to like cost of service that we're talking about.
So hey, I'm going to try to stay up to
date with questions as they're coming in. Frank, this is
(15:15):
another great question. If you are an owner and driver,
should we know all these things just starting out? Well,
what I would tell you to do is, Hey, give
us a call at truck or tax tools dot com.
Let us get started helping you in your trucking business
from day one, and yes, you should know this stuff
(15:37):
starting out. And when I go to speak at Oida's
Truck to Success, I'm there speaking about this to people
that are just coming out or just deciding they're going
to be in the trucking business. And so yes, we
want them to learn and understand and then give us
(16:02):
that phone call and let us help guide you through
business itself. That's why we're one of the most recommended
bookkeeping and tax companies for truckers, is because we take
and we help the truckers all down the road so
that they've guided in the right way through business. So
(16:22):
just give us a called eight seven seven nine sixty
six two four seven seven again eight seven seven nine
six six two four seven seven, and we'll get you
on our very low cost bookkeeping service so that we
can keep you and guide you down the road. So
we were talking about keeping it simple, so you know,
open that separate checking account for your business. If you've
(16:44):
become an LLC or an inc. The bank's going to
require you to have a separate checking account. I always
tell you never commingle funds. Never write checks out of
the business, or use the funds directly from the business
for personal use. You want to transfer funds from the
(17:04):
business account to the personal account for personal items, don't
ever comingle that. It becomes a real pain for you.
If you're an LC or a corporation. Our attorney friends,
and I'm not an attorney, never want to the attorney.
Don't charge legal fees. Tell me all the time you
start commingling that you lose that corporate veil. You lose
(17:25):
any protections you may have out there. We also tell
you to use a separate credit card for business expenses. Now,
if you can get a credit card in the business name.
Now you may get a fuel card, or you may
get you one of these other saving cards out there
that you use for your trucking business, and that would
(17:45):
be separate underneath the business name. But if you can't
get a separate credit card in the business name. Designate
one card that's personal that is only used for business
as well. That way you can track everything through there.
And you know, everything going through that card is purely
business and nothing else. So you want to separate that
(18:10):
and keep it separate, and it helps keep your life
a little bit simpler. You know, that's the card you're
going to go to to look for the other expenses
that you may have for the business. Get a notebook
and carry with you and pocket folders so that you
can record every receipt and you can put receipts into
(18:30):
those expanding folders and make sure you're keeping all the receipts. Now,
I tell you a lot of times make pictures of them,
because you can see those receipts these days. After a
few months man and being in the heat or whatever,
they fade away, you know, and you won't know what
it is and you'll be going to what was this for?
Especially if you've got you know, using cash or something
(18:52):
like that. You want to make sure you've got those
documented above and beyond anything else, because at least receipts
or some that's been charged on a credit card, you
can go through and make sure that you know you've
got everything tracked that way, track your loans. And I'm
going to give you a hint. Before you sign a loan,
(19:15):
or you sign a lease on a truck, or anything
else for that matter, for equipment purchases or anything else
you do in your life, read it. Read it. Ask questions.
What's the actual cost of buying this truck, what's the
interest rate, what's it costing me to do this? Look
at the cash purchase price versus what you're going to
pay over the long term. What's my buyout at the end,
(19:38):
You've got to make sure you're reading. And that's how
I stand in a soapbox and preach this to new truckers,
even people that are doing bookkeeping and taxes with us currently,
we preach this to them consistently. Read before you sign.
Even our engagement letters, we tell you to read it
before you sign it. We want you to know what's
in it. Even though we go through it tell you
(20:00):
about it. You got to read it to understand it.
As my dad always says, if you don't read, get
what you get. You can't throw a fit. At least
when you read it and you know that. Hey, I'm
agreeing to this, and it's totally understandable to me. Save
your records. Hey, we had a question from Larry how
long you keep receipts? Well, you know, IRS to tell
(20:22):
you should be keeping support for your tax return for
about seven years. Now, I'm going to tell you your
receipts aren't going to last that long. Very seldom do
I have an IRIS agent that has gone through an
audit with me that will ask for actual receipts behind things.
Unless it's a large purchase. Then you know, hey, if
it's a couple thousand dollars here, five, ten thousand, they
(20:43):
may ask for the receipt So you might want to
have pictures and put them in you know, Hey, you
can use folders in your in your phone. Those are
really nice things to do. Speaking of phone, before it rings,
I got to turn my ringer off here, but you know,
you can use file folders on your by year and
put your pictures over there for the year, so you
(21:04):
have them if you need them. So, but it's about
you know, seven years now if it's a major purchase,
and until seven years after you really you sell it,
So it could be something you keep a little bit longer,
but we work through that. I've got a few more
questions that have come up in here, and we're going
to talk more about basic keeping it simple bookkeeping or
(21:27):
your business, whether you're in trucking, whether you're a small
business out there. We want to try to find ways
to help you keep it simple. We'll answer those questions
and go through more of this right back after this.
Speaker 3 (21:39):
We have only scratched the surface of today's show. Please
stand by as Barry Chief Fowler will be right back
with tax talk for you. As an owner operator, you
already spend too much time away from your family. Trucker
Tax Tools handles all your bookkeeping and taxes.
Speaker 2 (21:59):
No matter what level trucker you are.
Speaker 3 (22:01):
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 eight seven seven nine
(22:24):
sixty six two four seven seven, or go to Trucker
tax Tools dot com now and let the.
Speaker 2 (22:30):
Experts keep you trucking.
Speaker 3 (22:35):
Let's get back to tax stock for you with more
tax stock once again.
Speaker 2 (22:40):
Here's your host, Barry G. Feller.
Speaker 4 (22:45):
Hey, welcome back. H You know, we got some other
good questions that come in.
Speaker 2 (22:50):
We'll got a.
Speaker 4 (22:50):
Couple will fill in as we're going through and talking
about bookkeeping systems, how to make it, keep it simple,
simplest way is being truck or tax tools a call
and let us get you set up in our bookkeeping.
We start as low as twenty five dollars a week
for trucking or bookkeeping. We're running some great promotions right now.
(23:12):
We have a great billboard out on Highway twelve out
in Louisiana with some great information. So hopefully if you've
seen that, call us. Call us if you've seen it,
Even if you're not going to use this for bookkeeping. Hey,
if you're out there trucking and you see the billboard,
call us, hey, just give us his thumbs up something
that says, hey, I saw the billboard and everything. But
(23:35):
we had a question for James. From James, what if
you are just about to start out in business but
don't have things set up just yet. You have to
get the separate accounts and how do you get accounts
without documentation. Well, James, if you're in a startup phase,
you're not going to have that separate account yet. So
you know, once you set up your DBA or your
(23:57):
LLC or your corporation, and then you get the employer
identification number and then you can get that checking account
in the company name. Now that being said, you're going
to possibly have expenses or you even have that account.
Now those expenses are going to be considered startup costs.
(24:19):
Now the best thing to do is track those. Maybe
do a folder says startup costs on it. And as
you're spending money, like in corporation fees, maybe you're driving
to go see a lawyer. Maybe you're doing some pre
work to determine if this is the right business for you.
You're out looking for maybe a truck, you're looking for
a location, you're looking for storage or parking, and you're driving.
(24:44):
You want to keep track of those miles, all those
business miles to and from the house and get a
log and log all those miles. Maybe you had to
buy pre supplies and stuff like that for you were
getting all set up, so you're going to want to
(25:05):
track all that.
Speaker 2 (25:06):
Now I don't.
Speaker 4 (25:07):
Recommend you buying that truck until you get the LLC,
put the LLC's name on it, or the corporation's name
on the truck, and you can start from there. That way,
you've got your eyes down and t's crossed. And then
when you go to your bookkeeper or your tax guy, Hey,
these were my startup costs, and you can total those
up and it's going to be total startup costs, and
(25:28):
then we can take the appropriate deduction for startup costs
on your taxes. So there are some limitations in that,
and it varies by year and what's happening, but we'll
be able to sit down and get that information and
be able to take those deductions. Where we go Now,
I promised, Hey, keeping it simple. Here was the example
(25:49):
I used at Truck to Success. A very basic record
keeping procedure for you as an owner operator. And you
can do this as a small business person. You know,
you buy that expanding folder, you go down to an
office supply stor you get a Stapler desktop calculator with
a registered tape. You fill out the pocket labels with
(26:11):
various categories of expenses and income, you know, such as
maintenance or meals and fuel equipment, settlements, office supplies, et cetera.
And then when you get a receipt, you just reach down,
find the right section, drop in the receipt into that pocket. Now,
at the end of every month, you take those receipts out,
(26:34):
you total them up, staple them together, put a total
on them, and now you've got total four office supplies
for the month. You've got a total for fuel for
the month. You've got your total for revenue for the month,
fuel fuel for the month. So you made it simple,
and now you can actually put it into a spreadsheet
(26:54):
and help determine what you need, what you have as
net income. So it can be that simple. Now do
I recommend doing it that way? Now you don't have
time on your hands to do this, you don't know
what you're doing. Get a good book hip heer that's
in the trucking business that doesn't, and that's something you
should start soon as possible. So, really, when I'm looking
(27:18):
at questions that come in, Jennifer asked a question, what
kind of expenses can I take as an owner operator? Well, Jennifer,
you know we talk about the most overlooked truck driver deductions,
So you know some of these things are really simple
and really easy, such as you know, fuel and truck
(27:41):
maintenance and tolls and scales. But the things that you
do sometimes missed. They may seem like small items. But remember,
if you're a small business person and you're running a
DBA and you're a soil proprietor and you're reporting on
SCHEDULEC or your single member LLC reporting on SCHEDULEC, your
bottom line of your business gets first tax at fifteen
(28:04):
point three percent social Security and Medicare. So if you grow,
if you netted one hundred thousand dollars, you're paying fifteen thousand,
three hundred dollars just in Social Security and Medicare taxes
before you get to the federal income tax side, and
only half of that fifteen point three it is deductible
for federal income tax. So every dollar you save for
(28:27):
every hundred dollars you gain and expenses saves fifteen dollars
at a minimum in your pocket plus whatever the federal
income tax. So even if you were taxed at the
lowest tax bracket, you're saving twenty five cents on every dollar,
twenty five dollars on every hundred, So it becomes important
(28:48):
to do that it's money saving items. Okay, so what
items are those association dues? You know, if you paid
to become part of the Association of Owner Operator Independent
Drivers Association, deductible your bank fees whatever the bank's charging you. Now,
I tell you to watch those bank fees. I've seen
(29:09):
bank fees higher costs than sometimes professional services out there.
So if you're running an NSS on your account and
those fees become very very high, some banks are still
charging a monthly bank charge.
Speaker 2 (29:23):
Watch that.
Speaker 4 (29:24):
Maybe you're banking at the wrong bank. Find a new bank.
It isn't going to charge it. Your cell phone or
internet plans. Now, a cell phone or cell phone plans
themselves are only deductible for what you're using for business.
So if you have a straight lines that it's just
for your business, that's one hundred percent deductible. Now if
it's a business and personal, maybe you're using at eighty twenty,
(29:46):
maybe fifty to fifty, So you got to look at
what your usage is on that phone and then in
deduct the portion that is applicable to the business. But
it is a deduction that some people overlook. Coffee pot
for the truck, deduct any certifications you need, has MATT certifications,
things like that, you're gonna be able to take that deduction. Calculator,
(30:09):
cleaning supplies for the truck. Something as simple as chains
that you need or required to have for the truck, envelopes,
your stapler. Hey, guess what professional services such as tax
and bookkeeping services. Our services are deductible, so it gives
you that additional tax deduction. Any licenses or fees that
(30:34):
you're going to incur your fire extinguisher, ice scrapers, and
people laugh about this because I'm sitting here talking about it.
But the little things that you have to replace periodically. Hey,
if it costs you ten dollars for it and you're
going to be hit at twenty five percent tax, doesn't
that money?
Speaker 2 (30:54):
Say?
Speaker 4 (30:55):
Doesn't it save you two dollars and fifty cents you
had to buy it? Anyone take the deduction for excise taxes? Hey,
road at list, I funny joke about the road outlyss
is it's paper, We all know that. But how good
is a GPS? Sometimes out in the mountains in different places,
sometimes you might need it. Most truckers that I've ever
(31:16):
talked to have a road out, liss, I carry one
in my truck. My kids go, what is this? I
taught them how to read them map that I got
a GPS. A GPS doesn't always work everywhere, and sometimes
you just need to be able to read a map
to know where you're going, where you're at, and how
to find the next exit, the next step and maybe
(31:38):
the back road that gets you around all of it
that maybe your GPS isn't going to guide you down.
We were taking a road trip and heading to Branson
and going through Arkansas. They were doing some major construction
and there was a two hour delay on the major roads.
When my wife was able to pull out the road
(31:58):
map and it and guide us using that road at
Liss to get around it all and something the GPS
did not show us. So it saved us more almost
two hours of at least sitting in that traffic. Took
us a little bit more time because it was some
back roads, but we enjoyed the back rounds. So it
was it was something fun, It was something good, and
(32:21):
it was a learning experience, you know, with the kids,
showing them how you can find the different routes to
get around things like this that are traffic oriented. Of course,
you know your fuel, and your truck operating expenses are
all deductible paper pens, envelopes, and excuse me, insurance, but
(32:45):
not life insurance. Now, you could deduct life insurance. So
maybe it's a you know, maybe you got a partner
and you need the insurance between the two of you
for bicell agreements and stuff like that. I don't recommend
that being deductible because then the proceeds from the life
and which is supposed to be taxed, so you kind
of need to avoid that portion. Interest expense is deductible,
(33:09):
but the principle is not. So if you're paying on
your truck, or you're paying on capital improvement, or you're
paying on and it's real estate or building or something,
the principle is not deductible. It comes off the loan balance.
The interest is deductible any labor your leases. Now, leases
have two categories, operating or capital. Operating is directly deductible.
(33:34):
Expense capital you capitalize the fixed asset and appreciate it,
so you don't get the lease expense. Now, a portion
at lease expense would be interest, and therefore you would
take the interest part of this as a deduction. License fees, maintenance,
and repairs, dot medical exams, safety gear, and things like
(34:01):
that are all deductible, So you want to be looking
for every kind of expense. Now we come back, we're
going to talk about other expenses. What is required by
the IRS to make an expense deductible. We'll do that
right after that.
Speaker 3 (34:18):
We have only scratched the surface of today's show. Please
stand by.
Speaker 2 (34:22):
As Barry G. Fowler will be right back with tax
talk for you.
Speaker 3 (34:29):
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 a solution filled specifically
for truckers. Trucker tax tools dot Com makes your life
run smoothly. Let's get back to tax stock for you
(34:51):
with more taxtock once again, here's your host, Barry G.
Speaker 2 (34:56):
Fowler.
Speaker 4 (34:59):
Hey, welcome back. What makes an expense deductible? According to
the I R S. In order to be deductible, it
needs to be ordinary and necessary expense for your business. Now,
all the things we've talked about are ordinary and necessary expenses. Now,
what other items can you find that you could actually
(35:22):
make become ordinary and necessary expenses? Some people don't think
about personal supplies. So not all personal supplies are considered
tax deductible. And again, you know, it's got to be
considered ordinary and necessary. They have to have a business purpose.
So here's some examples. Uniforms, see sure has my logo
(35:47):
on it and everything. It's a deductible business expense. So
we consider uniforms something that you're doing that you only
can use truck now if you knows, and stuff like that,
and wouldn't be considered ordinary and necessary. They're considered to
be personal items and isn't going to be tax deductible.
(36:08):
I guess you could put your logo in the back
pocket and maybe that works. Might be a good one
for the plumbers, gloves that you're using at the truck,
boots especially like steel toe boots that you'd be required
to wear, or something showers. Motel expense, So even though
you could probably sleep in your truck, if you've been
(36:30):
stopped at a motel and you sleep in a motel,
it would be a tax deductible item. You know, you
really have to think about it and keeping the I
R s's words and thought process, which is really hard
to do. When you start talking about the I R S.
Isn't it ordinary and necessary, isn't it. You think about
(36:52):
it that way, it's easier to decide whether or not
an item is tax deductible. Communication expenses, I mean you
may not think about you know, your cell phone and
the internet, your radio, CB radio, your truck. Also things
(37:13):
like your subscriptions to different things that you use within
the truck. Yes, you can hearr ELD and things like that,
but what about your YouTube, TV or some of the
other platforms that you may be using while you're in
the truck, or maybe have a specialized GPS that you
want to use. Those all become ordinary necessary business expenses
(37:37):
and you know, tax deductible. So those things that you'd
be able to use now some people get into factoring.
Now factoring, if you don't know what it is, is
when you take your receivables or your invoices and send
them to somebody else to collect and get the money
up front. Factoring is sometimes a hard thing to get
(38:03):
away from doing because once you get started and you're
used to getting that money right away, where some companies
pay you in maybe two weeks, three weeks, sixty ninety days,
and you can't survive waiting for an invoice to be paid,
you know, thirty sixty ninety days out, and that being
(38:24):
the case, a lot of people go in factor but
you can be able to take in deduct that factoring fee.
And these fees range anywhere from a half percent to
five percent per invoice. Sometimes they've seen them go as
high as ten percent, depending on invoice volume, clients, credit worthiness,
(38:46):
and whatever industry you may be in. And then you
know the reserves. The reserves are not deductible unless they
pull the money back to cover a claim. Maybe an
invoice wasn't paid, maybe the invoice would ended up having
to be discounted for whatever reason, so you would make
(39:07):
sure that you pulled that back as well as an expense.
So those reserves sit as an s grow or a
reserve account on the balance sheet. And then once you
receive the money, then you would be able to include
that in your income. At that point, other costs of
(39:28):
factory and you get to write off is your application fee,
maybe your check card feed wire transfer fees, and then
if there's a termination fee, all this is deductible there
for you. I've seen advantages and I'm not one a
good proponent of saying, hey you should factor, but sometimes
(39:48):
it works really well, and especially sometimes in the trucking industry,
where you can send over the information to your factor
and they will actually do the invoicing and everything for
you and get your money right away and they collect
over the period of time on thirty sixty ninety days
whatever the company's terms are paying at and it helps
(40:13):
you because you're not having to deal with the invoicing
or the collections, and sometimes that can be a total
pain while you're in business, and not just in the
trucking business, but you know, any business that's out there.
So this is kind of what we go through and
we talk about with people at truck to Success. Now
(40:37):
one of the other things we do talk about because
once you've done all this, you've gathered all these expenses
and you have it in a nice format that is readable,
you can then take a form that o Idea has
on their website, and if you go to o Ida
cost per Mile, that's what one of the forms that
(40:59):
they have out there that's on their website that has
a nice little spreadsheet that you can use to determine
what it's costing you to operate your truck per mile
out there, and that's great information everybody in business. You know,
(41:19):
I know this is specific to trucking, but you've got
to determine what is the cost of doing business, And
in trucking industry, it's as simple as knowing, you know
what is my cost? You know per mile? You know
you're going to be looking at how many loads you've run,
how many miles did you run, And you can do
(41:40):
this on a month to month basis, year to year basis,
and determine it. You're going to be able to come
in if you know your how many loads you did
and how many miles you did. You can also look
at how many empty miles you're in, so if you're
dead heading or something, you should keep track of that
as well. You can come down to your average mile
(42:00):
per gallon. With all your fuel costs for the year,
you can get to your average price per gallon. If
you've looked at the receipts and track your gallons, number
of gallons you use. You can put in how many gallons,
and then how many gallons of fuel, diesel fuel, refer
fuel so forth. Be able to determine all this and
(42:24):
then you'll be able to deduct. Then looking at all
your expenses, get down to an exact cost per mile.
So it's a great worksheet. So if you go to
like I said, you can go to an old idea
and it's easy. You just go into Google and do
a search or whatever search engine you using old idea
trucking tools cost per mile, and then you can it'll
(42:46):
get you over to that cost per mile worksheet. If
you have a problem, you can email us at info
at trucker tax Tools dot com. Again info at truck
or tax tools dot com and we'll get you over
to that cost per mile worksheet as well. Hey, it's
(43:07):
my pleasure always being here. I love answering questions from you.
If you've got questions outside of that, and just go
over to truck or tax tools dot com. Go our
contact page, send us the questions. We're more than happy
to help you. If you've got an IRS problem, we
can help you with that too at Taxation Solutions dot net.
That's Taxation Solutions dot net for tax relief. As I said,
(43:30):
I enjoy being here. Time flies when we're having fun
and we're talking taxes with you. Make sure you get
over to tax Talk for you. Tax Talk the number
four the letter you dot com subscribe over there or
follow us over there, soe you never miss an episode
and we'll be right here talking taxes every Monday on
W four c Y radio dot com. So online radio
(43:54):
connect with us, be here. Don't ever be late, because
if you're late, you're going to miss something good. Tell
your friends, tell your family, Tune in and join us
right here at tax Talk for You. Go to tax
talkfor You dot com. We'll see you next Monday, ten
am Eastern time right here at W four c RI Radio.
Have but God blessed glorious week.
Speaker 3 (44:18):
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 dirs and ready to have some relief? Then
(44:38):
you need Tax Talk for You, hosted by tax and
trucker expert Barry g.
Speaker 2 (44:44):
Fouer Ea.
Speaker 3 (44:46):
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 you next week at W fur c
Y dot com
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