September 8, 2025 • 46 mins
TaxTalk4U.com Trucking, Business and Taxes. What you need to know about trucking, how taxes effect your business. Minimize taxes for business. Truckers, tax requirements differ significantly depending on whether you are a company driver or an independent owner-operator. Owner-operators file as self-employed business owners, which involves paying quarterly estimated taxes but also allows for claiming many business-related deductions. Quarterly estimated taxes how much and when to pay the IRS.
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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,
explicit or implied 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 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.
Speaker 3 (00:59):
Barry G.
Speaker 4 (01:02):
Hey, welcome, good morning man. It's a great Monday morning
to be here talking to you trucking and taxes today.
You know, but hey, what we talk about here for
truckers and owner operators, business owners can apply to most
any business.
Speaker 3 (01:20):
Now.
Speaker 4 (01:21):
Trucking has a lot of specific deductions that are just
for the trucking industry. But you can relate a lot
of the stuff that we talk about to your business
and what you're doing your business. You know, as a
small business owner, owner operator, you know, your taxes look
completely different than if you were a employee company driver.
(01:45):
You know your taxes are going to be not taken
out of your paycheck.
Speaker 3 (01:49):
You actually have.
Speaker 4 (01:51):
To go through and calculate what your taxes are going
to be, and the biggest thing you've got to do
is stay on type of those quarterly as made the taxes.
You know, one of the things we preach and people
get in trouble when they're in business is not making
sure that they're paying enough money in to cover the
taxes that they are going to come to April fifteenth. Now,
(02:14):
as an owner operator, small business person, you know you've
got to make sure that you're covering, you know, the
self employment taxes if you're reporting on scheduled to see
you've got to make sure you're covering the federal taxes
as well, and you've got to make sure you're paying
at least the minimum amount in based on your twenty
(02:36):
twenty four taxes. So you know, whatever the tax amount
is for twenty twenty four, it's going to come up
with a calculation on how much you should be paying
in twenty twenty five in your quarterly estimates. So you've
got your third quarterly estimate coming to next Monday the fifteenth,
(02:56):
So you should have made the first one on April fifteenth,
and then June fifteenth, September, and the next one is
to do in January. So you got to make sure
you're calculating those correctly and making sure that you're paying
the right the end. Now, taxes, taxes, taxes, and everybody
(03:17):
hates taxes.
Speaker 3 (03:18):
You know.
Speaker 4 (03:19):
Sometimes you hate the tax guy because they bring you
bad news. Other times you love us because we're telling
you you've got a refund because guess what you overpaid,
or maybe you got more deductions because maybe you bought
a new truck, or you actually got a good bookkeeper
who actually goes through and finds all the deductions be
(03:42):
available you in your business. You know, for the trucking industry,
taxes very significantly based on you know, type of operations
you're on the company structure. Are you an LLC? Are
you multi member ll SEE single member LLC? Are you incorporated?
(04:04):
Are you an escort? All these things can drive how
your business taxes are calculated out there.
Speaker 3 (04:12):
But you as an.
Speaker 4 (04:13):
Owner operator or an independent contractor treated as a business
owner for tax purposes, you can use all the deductions
that apply to your business to reduce your overall tax liability.
And then if you are a sole proprietor, you're then
reporting on scheduled CEE and then you calculate your self
(04:34):
employment taxes. You should schedule SEU self employment. Of course,
if you're now LLC and your single member, your first
reporting status is going to still be on scheduled c. However,
you can make the election to be an escort. If
you are incorporated, your first and status of reporting taxes
(04:56):
is an eleven twenty C corp means you're going to
get tax twice. You're going to get taxed at the
corporate level, and then you're going to get taxed when
you give dividends. Distributions are dividends in AC corp or
you again make that es CORP election. So what other
taxes do you have as an owner operator? Before we
(05:17):
get into deductions and other things like that. You're going
to have to file your Heavy Highway Vehicle Use tax.
It's an annual federal excess tax for twenty two ninety
and it's required for all heavy vehicles operating on public
highways with a taxable gross weight of fifty five pounds,
(05:39):
and those are usually filed midsummer, so you've got to
make sure you're meeting those deadlines. You could also be
responsible for the International Fuel Tax Agreement if the taxes.
If you operate across state or provincial lines, you must
report and pay fuel taxes based on your traveling each urisdiction. Now,
(06:01):
a lot of times if you're released on driver, your
carrier takes care of the if the taxes. If you're
running under your own authority, then you would have to
take care of your own if the taxes, hire a
company out there that will actually calculate these taxes, but
make sure you're doing those. I believe those are also
reported on a quarterly basis. Federal excise tax is a
(06:27):
twelve percent tax imposed on the first retail sale of
heavy trucks tractors over specific weight thresholds, So you can
be responsible for that.
Speaker 3 (06:38):
And then you have other taxes.
Speaker 4 (06:40):
Now it depends on your location, your business structure. Your
location can determine that if you've got to file state
tax return for your company, franchise taxes, gross receipts, tax,
property taxes on your assets, all these things could apply
you in business. So you know, you got to think
(07:04):
about where you are, where your business is located, and
then how is that business going to be taxed, both
on the personal level and the business level. So when
you're on Schedule C, your bottom line tax tax for
Social Security, Medicare, and then federal income tax. If you
(07:24):
are a partnership, you should be doing what you call
guaranteed payments. Those are the payments for the person that
owns the business that's working in the business. So you,
as a business owner that's working in the business, you
would determine what is a reasonable wage for what you
do in the business, and then that reasonable wage.
Speaker 3 (07:47):
Or salary is considered.
Speaker 4 (07:49):
Guaranteed payments and that is what's subject to that self
employment tax. Social Security and medicare not potentially the full
bottom line. Now, if you are an es corp, you
are required to do payroll, including for you as the owner.
Now again you set what the IRS calls a reasonable
(08:12):
salary or reasonable wage for what you do in the business.
I mean that's everything from administrative work to drive in
the truck to being the corporate business owner. And you
set that wage based on the type of activity you're
doing for the business, and that is what gets taxed
for Social Security Medicare. Now the full bottom line for
(08:36):
both a partnership and eleven twenty s escorp is taxed
for federal income tax purposes. So you're going to report
partnership on a ten sixty five and you're going to
report es Corp On eleven twenty s and then each
is going to generate what we call a K one,
which is a distribution of earnings from that company to
(08:58):
the owner's base on on your ownership percentage. So if
you own it fifty to fifty, you get fifty percent
of the profits with whoever your partner is. If you're
an S corporate, it's fifty to fifty again, you get
fifty percent of the profit and the other shareholder gets
fifty percent of the profit or whatever the percentages are,
(09:19):
and that shows up on the K one. Now that
is the only amount that's going to be taxed for
federal income tax purposes coming from the company, whether you
make the distributions or not. And then your wages or
your guarantee salary will also be taxed for federal income
tax purposes. But the only amount tax or Social Security
(09:40):
and Medicare is your w two wages or your guarantee
distributions guaranteed payments from your partnership. So this kind of
dictates you know how much tax you're going to have
out there.
Speaker 3 (09:56):
If you are.
Speaker 4 (09:58):
Running as a schedule see, and you have huge profits,
it might benefit you to look at becoming an escort
or a multi member partnership out there as well. You
got to run some key numbers out there and make
sure it's going to work and make sure that it's
going to benefit you not just today but over the
(10:21):
long run. And that's where you know, we get into
looking at this and helping you make that determination. We're
going to continue talking about taxes and tax deductions. Matter
of fact, if we're going to get into another segment
here later on of cost per mile. When you're operating
a truck, you kind of got to use these kind
(10:42):
of information to better your business. So make sure you
stay with us because as we continue to talk about
key tax reductions and then we get into cost per mile.
It's going to be a great show today. It's something
you're not going to want to miss. If you've got
some friends, family who's an owner operator out there, tell
them to tune in right now to Tax Talk for you.
Go to Tax Talk for you dot com and it's
(11:04):
tax Talk number four Letter you dot com.
Speaker 3 (11:08):
Hey, get into the show. It's gonna be a great one.
We'll talk to you right back after this.
Speaker 2 (11:14):
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. Called Taxation Solutions Tax Relief at eight eight
(11:35):
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
(11:55):
the IRS walk all over you. Stop the IRS now
call Ada he eight nine three 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
(12:15):
stock for you with more tax stock once again. Here's
your host, Barry G. Fowler.
Speaker 3 (12:24):
Hey, welcome back.
Speaker 4 (12:25):
Yeah, we're talking about trucking taxes, small business taxes. Hey,
there are a lot of deductions you can take as
a small business owner. Now, you know we're getting in
particulars about trucking and taxes today, but a lot of
this stuff can be applied to you and your business.
You just got to put thought to it. Is, Hey,
(12:47):
what am I doing in my business? What applies to
ordinary necessary business expenses? What can I deduct that I
haven't been deducting that applies to the business, And maybe
I've been paying from the personal account and maybe it
could be related to a business expense. So you've got
to find these deductions by looking at what you do
(13:11):
in your life. A good example, and I know a
lot of people. You know you don't miss this very much,
but I do see it. Missed your cell phone? You
use your cell phone in your business. Now what percentage
of your cell phone may be what matters. But you're
using your cell phone. You know, people call you all
the time on this little device here, and whether it
(13:33):
relates to your personal or business. The percentage that relates
to business is a tax right off. So when you're
making and taking calls on your personal cell phone, or
maybe you're running those apps that apply on your cell
phone as well. So like in our office, we use
our phone service, you know, Ring Central, and we have
(13:53):
the app on our phone. So whether I'm in the
office or not, they can transfer calls to me and
I can take the calls right there on my cell phone.
Speaker 3 (14:00):
And you know, it doesn't count on the minutes.
Speaker 4 (14:03):
It's usually on Wi Fi or whatever it's you know,
it could be through the data service part of it,
but it is a percentage use of the phone. So
you can take those kind of deductions that are out
there now. One of the key deductions that's out there
for owner operators excuse me.
Speaker 3 (14:22):
Is predems.
Speaker 4 (14:24):
You know, this allows a owner operator to detect a
set amount for daily meal and incidental expenses while traveling
overnight away from your tax home. It's a special rate
for the transportation industry. It's eighty dollars a night and
it's deductible eighty percent of it, so you get a
(14:46):
very good deduction.
Speaker 3 (14:47):
Now you've got to keep track of.
Speaker 4 (14:49):
Your nights that you are away from home. Now, the
first night you're away and the last night before you
the day you return counts is a half a day,
but all the days in between is a full day.
Speaker 3 (15:04):
Do you want to be able to track that.
Speaker 4 (15:08):
And keep track of it because it becomes a very
valuable deduction for you and the business. Now, don't come
reporting that you were on the road over nine four
hundred and sixty five days last year, because we all
know there's only three hundred and sixty five days in
a year. And if you're on the road every single day,
guess what, you don't get the deduction. You never returned home.
(15:28):
Your home was your truck. Now, they have a lot
of special requirements in this prettym and meaning that you
do have to have a tax home someplace you're supporting
and paying for, you know, rent or mortgage, utilities and
all that. So you've got to have a home you
return to. But you know, hey, if you're on the
road two hundred and eighty five days, you know three
(15:49):
hundred days a year you're returning home. You know, weekends
here and there, and you know maybe a week a
month or you know, whatever you may be doing the
deduction becomes valuable in lowering federal taxes, self employment taxes.
Who works, so you want to make sure you're tracking
those days and keeping track of p dms out there
(16:12):
while you're on the road and away from home. Now,
the other thing you get as an owner vehicle expenses.
And that makes sense, doesn't it. You're operating a vehicle
now for your semi truck, this is a qualified non
personal use vehicle, and you have to deduct actual expenses.
(16:33):
You cannot use the standard mileage rate. You get that
you cannot use the standard mileage rate. Now, I've seen
people try to take this deduction. I've seen CPAs and
other people doing taxes thinking hey, we can take the
standard mileage rate. Now you actually have to take actual
(16:53):
expenses fuel, oil repairs, maintenance, tires, cleaning, washing, your insurance premiums,
registration fees, your license, depreciation on the vehicle, or if
you're leasing a lease, expense. Now you kind of got
to watch this because your lease could either be an
(17:14):
operating lease or a capital lease.
Speaker 3 (17:16):
Capital lease, you've.
Speaker 4 (17:17):
Got to capitalize and depreciate operating lease. You're going to
be taking deduction every single month as you pay the lease.
You kind of got to look at these things. Repairs
and maintenance is not simple and cut and dry, because
if it improves the useful life of the truck, that
again would have to be capitalized and depreciated. Now, you
(17:41):
might be able to use full depreciation on this or
bonus depreciation or Section one seventy nine and still get
take advantage of taking the full deduction of the expenses
out there. But that's something your tax preprayers should be
sitting down and talking to you about as they're doing taxes,
because if you're in the very lowest tax bracket, you
(18:05):
may not want to take that kind of bonus depreciation
or accelerated depreciation in section one seventy nine. You might
really want to depreciate it over the useful life that
is out there.
Speaker 3 (18:17):
Now.
Speaker 4 (18:18):
The other thing that you're going to have is travel expenses.
It costs incurred while you're away from home overnight aren't deductible.
You know, hotels, lodging, you know, if you're traveling somewhere
taking flights, maybe your truck broke down and you've got
to have a hotel, you get those expenses. You're going
to fly home. The flights would be covered, tolls, parking fees.
(18:44):
All these things are deductible. You know, other business expenses
that you would need to think about, ordinary and necessary
communication tools besides your cell phone, computers, GPS, laptops, iPads,
office supplies software apps that you may be using on
(19:07):
your phone and you're not really thinking about it that
you pay pay for The business should be paying for
it because it's a business app. You know, your GPS,
all those fun things that are out there.
Speaker 3 (19:18):
Your eld.
Speaker 4 (19:20):
Association or union dues, interest on your business loans. All
these things are deductible, and you need to make sure
that you know what you're doing is you're getting every
possible deduction to bring that profit down from your business
to minimize the tax on your business. You know, payroll
(19:41):
taxes that you pay also bring down your income is
a deduction, you know. So you need to make sure
that you're finding every deduction possible in your business. And
that's why record keeping. Bookkeeping is is extremely crucial and
important in your business. Now, speaking of bookkeeping and everything else, man,
(20:06):
we're celebrating truckers this month. We're going to have some
new billboards coming out Long I ten in the Louisiana area.
So look for those around Hammond. I think it is
we're going to have those. But we have great specials
going on to celebrate truckers. Trucker Tax Tools has got
low cost bookkeeping for you. But if you come in,
(20:30):
you know this week next week, while we're celebrating truckers,
we're going to give not only our low cost trucker bookkeeping,
but we're also going to give away the first eight
months of this year's bookkeeping to get you caught up.
Absolutely free. Terms do apply to this, but give us
(20:51):
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we help you in the trucking industry keep track of
all your expenses. How we look to organize your systems
to help you maintain the accuracy of bookkeeping for your
business and find you the most tax deductions is possible.
(21:13):
To minimize the taxes, maximize the profit, maximize what you
can keep in your pocket by doing great bookkeeping for truckers,
owner operators, and keeping tabs on what's going on in
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(21:34):
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Speaker 3 (21:57):
Hey we come back.
Speaker 4 (21:57):
We're going to talk a little bit about cost per
mile and why that is so important to know in
your trucking business. We're gonna do that right after the screen.
Speaker 2 (22:09):
We have only scratched the surface of today's show. Please
stand by as Barry gif 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. No matter
(22:29):
what 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
(22:50):
Tax Tools 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. Fallum.
Speaker 4 (23:15):
Hey, welcome back. You know, hey, record keeping isn't important.
I'm going to give you some great examples of why
good bookkeeping, great bookkeeping by truck or tax toles becomes
really important. Now I speak a Truck to Success, a
seminar put on by oh Ida's Foundation. Matter of fact,
that's coming up in October. I think it's a twenty
(23:36):
second of October. So get in and get register, come
to the seminar out there. But when I'm there talking
about bookkeeping and taxes, lease, purchase entities, all the things
we talk about to save you money about business. We
also talk about o ideas, cost per mile, and we
talk about their worksheet and how the things that we
(23:59):
do become import to working through. Knowing what your operating
costs is what it costs you to run your truck
every mile out there? Do you know what your break
even is? That's important for every business. Do you know
what it's costing you just to open the doors, just
to have your truck. Do you know what it's costing
you to run that mile loaded or unloaded. These are
(24:23):
things that you should know as an owner operator in
your business, and it becomes really really important. You know,
the old idea cost per mile, as they talk about
and we talk about it, it's not a fixed amount
but varies based on expenses. It's just fuel, maintenance, insurance,
and taxes. And with reason data showing there's been a
(24:44):
general increase. You know, back in twenty twenty three, to
the last survey that I saw, the American Transportation Research
Institute reported the average overall marginal cost of operating a
truck at two dollars and twenty seven cents per mile,
and that's increasing. You know, those costs out there are
influenced by fuel costs, maintenance, repairs, tires, insurance, premiums, taxes,
(25:09):
equipment costs, driver wage, you know, and stuff like that.
But what you're going to want to do is first
sit down and look at what your fixed costs are.
You know, your truck payment, your trailer payment. Now this
is the full payment amount, not just the interest that
you're able to dug, not the depreciation, but just actual
(25:32):
payment amount. Your insurance collision comp bobtail insurance, maybe your
cargo insurance, your health insurance that you're paying any licenses
and permits, your bookkeeping services. All these are going to
contribute to fixed costs. Now, also in there you can
(25:54):
throw in, you know, your telephone costs, things that you're
going to continue to have whether you're actually running a truck,
you know, cost per mile out there, you're going to
have these set costs still coming out. Just to have
that truck sitting there waiting to be running. Is your
(26:14):
fixed cost. Then you're going to have your variable costs.
You're going to have your tractor fuel, your reefer fuel,
your tires for your tractor, your trailer. You're going to
have your maintenance costs on your truck. Repair costs, they're
going to go into your truck. Maybe you have a
truck wash that you need to wash your truck, removing
(26:38):
the snow off the top of your truck, you know
in the winter, things like that. Maybe you have lodging costs.
Much of my truckers, unless you're traveling somewhere, you're not
going to have those lodging costs because you're usually staying truck.
But those things can occur I use when we do
our cost per mile, I'll use actual meal expenses, not
(27:01):
the per diem amount. So you know exactly what your
out of pocket costs is, not necessarily all your deductible costs,
but your actual travel meals you're incurring while you're on
the road, loading fees, unloading charges, lumper fees, your tolls,
(27:22):
your scales, and he finds you may incur along the road,
any cargo claims that you may have against you, your taxes,
your road tax, fuel tax, and then your miscellaneous expenses.
Now you're going to add these up. You're going to
(27:42):
come up with your your total fixed costs. You're going
to come up with your total variable costs. Wow, sorry
about that. Uh So I've got to be there real quick.
And then you're going to have what comes down to
your driver's income and your total costs of operation. So
(28:04):
you know the driver's income. It could be your income
that you're expecting to have or wanting to have. It
could be you know what you're paying other drivers out there.
But you've got to have income, right, you need to
figure this into you know, this equation. And so you
go through and do this, and then you've got to
track your miles. So you're going to take these costs
(28:26):
and you're going to look at what is my fixed
costs out there, and then what is my total.
Speaker 3 (28:31):
Cost per mile. So, if you've got costs.
Speaker 4 (28:34):
Out here, the more miles you run, the fixed cost
per mile is going to go down. So you'll see
a decrease of cost per mile the more mileage that
you run out there. If you're running less miles, your
costs are going to be higher because those fixed costs
don't change. Those fixed costs that you have are going
(28:58):
to be divided up by how many miles you run.
So the more miles that you do run during a month,
if you're looking at this on a monthly basis, then
you're going to see a lower cost per mile out there. Now,
all these other things that you have that are affecting this,
your variable costs. If you're not paying attention to your
(29:20):
fuel costs and everything, then your fuel costs out there
are you know, would be increasing and would increase your
cost per mile. If you run into major repairs or
a lot of maintenance during a particular month and maybe
not running isn't hard, then you're going to see that
cost per mile go up. Out there, So it's controlling
(29:42):
some of these expenses that you have to make it
make sense and make this work. Now, you know, sometimes
we're looking for expenses to move over here and it.
Speaker 3 (29:51):
Increases your cost per mile.
Speaker 4 (29:52):
So you may have to play with this a little
bit and say, you know, hey, you know, if I
didn't incur this expense, what would be my cost mile.
A lot of people don't even look at this, and
they're taking loads that they're running negative, so their income
per mile actually is below what they need to pay
themselves a living wage as people would say, or pay
(30:13):
themselves a reasonable salary. If you're taking a load that
you are not going to generate income, what are you doing.
You're hurting yourself, You're hurting the industry. This industry sometimes
gets hurt because people take loads that are not going
to be profitable for anybody in a truck. So when
you're looking at these things, you want to be able
(30:35):
to set yourself up to make money and make profit
so that you are making enough money to pay what
you desire as a wage in the business or income
from the business to support you and your family. Now,
when we look at these these kind of things, we're
(30:57):
always looking at round trip profits. You might take a
look at this calculation based on a particular trip, and
that's a little bit harder because you've got to be
looking at your income and expenses based on that trip.
Sometimes you're going to look at these things based on
your month and how you ran for that month, and
(31:19):
then you've got to kind of look at how the
income's recorded as well, because you may have a delay
in income because you didn't collect for thirty sixty ninety
days on invoices, So you would actually look at your
costs for that month divided by the income generated, and
you would look more on acrol basis, so you would
(31:40):
look at the invoices that you sent out for the
month to get down to your cost per mile based
on that revenue, not the actual revenue received. So you
kind of got to look at how you're going to
do this and how you're going to address looking at
this to have an actual good barometer for your financial
(32:03):
health in the trucking industry. Here, we've got a lot
of questions coming in Frank Jean Kevin. We're going to
address these questions and everything in the next segment here
right after the break, and we'll talk a little bit
more about your cost per mile and how knowing this
(32:25):
stuff benefits you and your business, kind of like knowing
what your break even level is for a small business
or a major business out there that you're running.
Speaker 3 (32:35):
And we'll do that right after this break.
Speaker 2 (32:38):
We have only scratched the surface of today's show. Please
stand by as Barry Chief Bowler 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 truck or tax tools
(32:58):
dot com, a solution and built specifically for truckers. Trucker
tax tools dot Com makes your life run smoothly. Let's
get back to tax stock for you with more tax
stock once again, here's your host, Barry G. Fallum.
Speaker 3 (33:19):
Hey, welcome back.
Speaker 4 (33:20):
Like I said, I'm gonna address questions man. The first
question we got in today was from Frank. When you
first get started, is it normal to not meet the
minimal needed to run the business? Hey, Frank, if you
can operate a business for a couple of years and
not meet the minimum to run a business, it means
you're running on somebody else's money, or you're spending a
(33:41):
lot of your own money to make that money to
make the business run and operate. You need to have
a strategic plan and a business plan to start making
money right away. And you may have depreciation that's going
to bring the deductions down or put you in a negative,
but cash flow is going to be to make your
(34:01):
business operate and operate in a positive. Now, you may
have some setup fees in the first couple of months
and everything else, but after that, if you're running like
in a trucking business, and you're not making money in
those first couple months, cash flow isn't coming in. Means, hey,
you're taking loads that aren't profitable to you, be you're
(34:24):
leased on with somebody who's not paying you enough, and
maybe you're lease on your truck or trailer or both
too much. You've got to look at your expenses to
determine that. Small businesses, yes, there's a lot of them,
fail within the first five years because you're not running
the business properly, you weren't set up in the business properly,
(34:46):
or maybe you're just in the wrong business and you're
just not running and gunning out there enough. There's a
lot of reasons small businesses fail and planning is one
of them. So you've got to plan for a profit,
plan strategic league to make money and make it in
business out there. Gene also asks, with most businesses, don't
(35:07):
you have a negative the first two years before you
see a profit?
Speaker 3 (35:10):
I say no. I say that you do.
Speaker 4 (35:13):
The planning ahead of time and plan how you're going
to break even or make money. You need cash flow.
Cash flow to support the business, pay the loans back
if you have loans, operating capital, pay yourself. All these
things become very very important in business. Next question we
(35:35):
got from Kevin. If a load has to go out
and the company will have more that will be profitable,
shouldn't you take the run showing you're a team player. Well,
first off, you're maybe a team player, but you're taking
the loss for that company. You should be able to
set Hey, this is what the load has to be
(35:57):
in order for me to at least break even and
make money for me in my business. You're not there
to make money for them. You're there in business to
make money for you and your family.
Speaker 3 (36:10):
Correct.
Speaker 4 (36:11):
You have to determine this is my cost per load,
This is what I need to make to go out
there and make money, so I'm not losing money. So
if you lose a dollar per mile or fifty cents
or ten cents per mile.
Speaker 3 (36:25):
You've got a lot to make up, just because.
Speaker 4 (36:27):
You wanted to be a team player for somebody that's
going to make a profit off of you. Because I'm
going to tell you they're not going to take a
load and do a load if they're not making money
off look, because hey, they're giving it to you at
a certain price because they had to do something supposedly
for somebody else. But they're going to take their cut.
Why can't they lower what their cut is to at
(36:48):
least keep you whole and to make money. So these
are things you've got to think about because, hey, you
know if you went out there to ran a thousand
miles and you know you lost one thousand dollars, well
they're going to have to figure out a way that
you're going to make that up. Well, if they're willing
to cut you back and you lose money, do you
(37:10):
think the next time are they going to make it
up and give you more money. No, they're going to
still take their cut, whatever that may be. When they
give you the load that goes out. So we've seen
that happen, you know where, Hey, we're going to give
you this load. I promise you, we're going to make
it better, and we're going to do this. It's kind
of like some of these companies we hear about who say, hey,
(37:34):
this is the greatest deal on earth. Sign here. You're
going to be at least on driver. You're going to
lease one of our trucks and trailers, and you've got
a three or four year lease, and three years into it,
you've got a year left, and all of a sudden,
the loads start going down, so they can repossess the
truck that you can't afford to pay, and now they
can turn around and take that truck from you and
start all over and give it to somebody else. So
(37:56):
it doesn't make sense to run a load that you're
going to lose money on. Let's break even, let's do better,
Let's make yourself some money. That's what it's about. See
people do this, and it has affected this industry many
times over. Somebody's always willing to take a load at.
Speaker 3 (38:12):
A cut rate.
Speaker 4 (38:13):
And if everybody takes loads and cut rates, what's it do?
It brings the rates down and now you have a
lot of trucking companies that aren't profitable out there, and
it just really hurts everybody in the industry. Keep the
load rate up and everybody in the industry can profit
and grow together. Another question from Kelly. Can a business
(38:35):
restructure to be able to get things in order that
hopes to gain a profit. Yes, I mean you can
talk to an attorney about this. You can look at
business restructuring, you can look at bankruptcy restructuring. A lot
of those things can set yourself up in business. If
you've had a downturn in business, it may be a
(38:55):
good strategy for you. But that's where I would tell
you sit down and talk with the bankruptcy attorney and determine, Hey,
is this the right way to go. And the one
thing to remember is that taxes very seldom come off
in bankruptcy. So if you're debt with taxes, sometimes you
need tax resolution and you need to structure a plan
(39:17):
to pay them back, especially if it's something like payroll
taxes that are out.
Speaker 2 (39:22):
There that.
Speaker 4 (39:24):
You owe and the company owes, and you need to
put a strategic plan in place for the business. And
those taxes don't necessarily go away, but it may be
something you include in bankruptcy and start planning as far
as that goes, Yancy, do I negotiate Holland contracts? And
(39:49):
I sound like I know what I'm doing. You know,
I've been to a lot of these old idea seminars
and I listen to o ideas experts there. In trucking,
I know axes, I know bookkeeping. I know trucking taxes
and bookkeeping inside and out. And that's why we have
truck or tax tools and were offering that great special
for the truck drivers. No, I do not negotiate hauling contracts.
(40:16):
You know my negotiation skills. I love to negotiate. I
love to work with people.
Speaker 3 (40:23):
You know.
Speaker 4 (40:23):
If I'm buying a new truck or a new car
or some of my I'm the first one to negotiate.
But I'm also the first one to walk away from
the table and not take a deal.
Speaker 3 (40:33):
You know. And my mom was buying a new.
Speaker 4 (40:36):
Car, and as I told her, hey, the deals and
no go just walk away, we ended up getting almost
exactly what we wanted. By walking away from the deal.
The dealership actually came back to us and did it.
I've done that multiple times in buying buying vehicles and
trucks and stuff. Is you got to be strategic. You
(40:57):
got to know what it's actually worth, and then is
it what's it worth to you? And if it doesn't
meet what you want, you walk away from the table.
It's the same thing in negotiating contracts and stuff like that.
You've got to be willing to walk away. You got
to know, hey, as the song goes, you got to
(41:18):
know when to hold them and know when to fold them.
And sometimes just walking away from a deal that doesn't
look right, doesn't smell right. And if it walks like
a duck, waks like a duck, gets a duck, get
out of there and don't take it. A lot of
times they come back to you and offer you a
better deal in the industry out there, So you've.
Speaker 3 (41:38):
Got to be willing to walk away.
Speaker 4 (41:41):
Even as President Trump said, you know, it's the art
of the deal. You sometimes you hold the hard line,
and you got to do it. If you've got a
good deal, you take it. But you've got to be
willing to negotiate and be willing to walk away if
it doesn't meet what you kelly. If you're structured, you
have to restructure anything with the IRS. Paperwork depends on
(42:04):
what you're restructuring. Is if it's because you're in dead,
you know, there's nothing restructuring as far as IRS paperwork.
If you restructure, such as moving from a single member
LLC schedule CE to a partnership, it changes the tax return,
nothing really to report to the IRS. You'll report it
(42:25):
on the ten sixty five that is partnership. If you're
moving to es Corp, you file the twenty five point
fifty three with the IRS and they will send to
you that you've been accepted, have the designation as an escort.
Now you'll have to do payroll, file your nine forty
one nineties W two's W three, all these fun things
(42:47):
in the state unemployment returns or state withholding returns, all
that stuff you have to do and you would have
to do with the state and then and you know
go from there. So all those things would happen if
you were to restructure that type of business, you know,
(43:08):
from being a schedule to see you know, one of
the things that we were talking about, and this cost
per mile just to get back to that real quick, uh,
you know, knowing your your daily or weekly cost of operations, Uh,
is important. So if you're looking at it a monthly report,
you know, you can break it down to kind of
(43:30):
a daily fixed cost that you have.
Speaker 3 (43:33):
You know.
Speaker 4 (43:34):
Trick in this is putting numbers that you can actually
relate to and which you can recognize, you know, problems
and stuff with. So it's kind of modifying, you know,
your cost per mile to determine. Hey, when I'm running
the truck and everything else, you know, what does it
cost to me standing still?
Speaker 3 (43:53):
That's your fixed cost?
Speaker 4 (43:54):
What's it costing me just to operate this truck and
keep it going from there? If you're not incurring a
lot of repairs and maintenance costs, you know, I suggest
you set up a maintenance fun and you use that
number in there for your maintenance costs and repair costs,
so that you know that you're pulling something out every
(44:14):
single load, every single mile to cover those costs. Stuff
with you, Hey, you know, time flies when we're having
fun and talking taxes and bookkeeping and truckers and small
businesses and everything else out there. Hey, don't forget we
got that special this month for truckers. Celebrating truckers. Give
(44:35):
us a call at eight seven seven nine sixty six, two, four,
seven seven. Again, first eight months of catchup of tax
work is going to be absolutely free when you sign
up for our bookkeeping here through twenty twenty five twenty
twenty six. Give us a call hey, as always, have
a great, God bless glorious week out there. Enjoy what
(44:57):
you do, live for your family, love for God. Just
do what you need to do to keep your business
and run your business the right way. Tell you to
have a great week. Join us right back here on
W four CY Radio. Make sure you connect with us
at tax Talk for You and that's the number four
(45:18):
the letter you dot com. Tax Talk for You dot Com.
Be here every Monday, ten am Eastern time again on
W four CY Radio.
Speaker 3 (45:28):
And if you.
Speaker 4 (45:29):
Connect with us over on Facebook or at tax talkfor
You dot com, you'll never miss an episode. And if
you do, go to our podcast We're on all the
major podcast sites. I hired, Spotify, you name it, we're there,
Go find us, go listen to our podcasts. But be
here every Monday ten am right here at W four
(45:51):
c y rate. Thank you, and again, have a God blessed,
glorious week.
Speaker 2 (45:55):
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,
(46:16):
Then you need Tax Talk for You, hosted by tax
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am Eastern Time every Monday right here on W FOURCY
Radio and Talk for TV. Don't forget to check this
and past episodes at tax TALKFORU dot com. See you
(46:37):
next week at W fourcy dot com
The topics and opinions express in the following show are
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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.
Speaker 3 (00:59):
Barry G.
Speaker 4 (01:02):
Hey, welcome, good morning man. It's a great Monday morning
to be here talking to you trucking and taxes today.
You know, but hey, what we talk about here for
truckers and owner operators, business owners can apply to most
any business.
Speaker 3 (01:20):
Now.
Speaker 4 (01:21):
Trucking has a lot of specific deductions that are just
for the trucking industry. But you can relate a lot
of the stuff that we talk about to your business
and what you're doing your business. You know, as a
small business owner, owner operator, you know, your taxes look
completely different than if you were a employee company driver.
(01:45):
You know your taxes are going to be not taken
out of your paycheck.
Speaker 3 (01:49):
You actually have.
Speaker 4 (01:51):
To go through and calculate what your taxes are going
to be, and the biggest thing you've got to do
is stay on type of those quarterly as made the taxes.
You know, one of the things we preach and people
get in trouble when they're in business is not making
sure that they're paying enough money in to cover the
taxes that they are going to come to April fifteenth. Now,
(02:14):
as an owner operator, small business person, you know you've
got to make sure that you're covering, you know, the
self employment taxes if you're reporting on scheduled to see
you've got to make sure you're covering the federal taxes
as well, and you've got to make sure you're paying
at least the minimum amount in based on your twenty
(02:36):
twenty four taxes. So you know, whatever the tax amount
is for twenty twenty four, it's going to come up
with a calculation on how much you should be paying
in twenty twenty five in your quarterly estimates. So you've
got your third quarterly estimate coming to next Monday the fifteenth,
(02:56):
So you should have made the first one on April fifteenth,
and then June fifteenth, September, and the next one is
to do in January. So you got to make sure
you're calculating those correctly and making sure that you're paying
the right the end. Now, taxes, taxes, taxes, and everybody
(03:17):
hates taxes.
Speaker 3 (03:18):
You know.
Speaker 4 (03:19):
Sometimes you hate the tax guy because they bring you
bad news. Other times you love us because we're telling
you you've got a refund because guess what you overpaid,
or maybe you got more deductions because maybe you bought
a new truck, or you actually got a good bookkeeper
who actually goes through and finds all the deductions be
(03:42):
available you in your business. You know, for the trucking industry,
taxes very significantly based on you know, type of operations
you're on the company structure. Are you an LLC? Are
you multi member ll SEE single member LLC? Are you incorporated?
(04:04):
Are you an escort? All these things can drive how
your business taxes are calculated out there.
Speaker 3 (04:12):
But you as an.
Speaker 4 (04:13):
Owner operator or an independent contractor treated as a business
owner for tax purposes, you can use all the deductions
that apply to your business to reduce your overall tax liability.
And then if you are a sole proprietor, you're then
reporting on scheduled CEE and then you calculate your self
(04:34):
employment taxes. You should schedule SEU self employment. Of course,
if you're now LLC and your single member, your first
reporting status is going to still be on scheduled c. However,
you can make the election to be an escort. If
you are incorporated, your first and status of reporting taxes
(04:56):
is an eleven twenty C corp means you're going to
get tax twice. You're going to get taxed at the
corporate level, and then you're going to get taxed when
you give dividends. Distributions are dividends in AC corp or
you again make that es CORP election. So what other
taxes do you have as an owner operator? Before we
(05:17):
get into deductions and other things like that. You're going
to have to file your Heavy Highway Vehicle Use tax.
It's an annual federal excess tax for twenty two ninety
and it's required for all heavy vehicles operating on public
highways with a taxable gross weight of fifty five pounds,
(05:39):
and those are usually filed midsummer, so you've got to
make sure you're meeting those deadlines. You could also be
responsible for the International Fuel Tax Agreement if the taxes.
If you operate across state or provincial lines, you must
report and pay fuel taxes based on your traveling each urisdiction. Now,
(06:01):
a lot of times if you're released on driver, your
carrier takes care of the if the taxes. If you're
running under your own authority, then you would have to
take care of your own if the taxes, hire a
company out there that will actually calculate these taxes, but
make sure you're doing those. I believe those are also
reported on a quarterly basis. Federal excise tax is a
(06:27):
twelve percent tax imposed on the first retail sale of
heavy trucks tractors over specific weight thresholds, So you can
be responsible for that.
Speaker 3 (06:38):
And then you have other taxes.
Speaker 4 (06:40):
Now it depends on your location, your business structure. Your
location can determine that if you've got to file state
tax return for your company, franchise taxes, gross receipts, tax,
property taxes on your assets, all these things could apply
you in business. So you know, you got to think
(07:04):
about where you are, where your business is located, and
then how is that business going to be taxed, both
on the personal level and the business level. So when
you're on Schedule C, your bottom line tax tax for
Social Security, Medicare, and then federal income tax. If you
(07:24):
are a partnership, you should be doing what you call
guaranteed payments. Those are the payments for the person that
owns the business that's working in the business. So you,
as a business owner that's working in the business, you
would determine what is a reasonable wage for what you
do in the business, and then that reasonable wage.
Speaker 3 (07:47):
Or salary is considered.
Speaker 4 (07:49):
Guaranteed payments and that is what's subject to that self
employment tax. Social Security and medicare not potentially the full
bottom line. Now, if you are an es corp, you
are required to do payroll, including for you as the owner.
Now again you set what the IRS calls a reasonable
(08:12):
salary or reasonable wage for what you do in the business.
I mean that's everything from administrative work to drive in
the truck to being the corporate business owner. And you
set that wage based on the type of activity you're
doing for the business, and that is what gets taxed
for Social Security Medicare. Now the full bottom line for
(08:36):
both a partnership and eleven twenty s escorp is taxed
for federal income tax purposes. So you're going to report
partnership on a ten sixty five and you're going to
report es Corp On eleven twenty s and then each
is going to generate what we call a K one,
which is a distribution of earnings from that company to
(08:58):
the owner's base on on your ownership percentage. So if
you own it fifty to fifty, you get fifty percent
of the profits with whoever your partner is. If you're
an S corporate, it's fifty to fifty again, you get
fifty percent of the profit and the other shareholder gets
fifty percent of the profit or whatever the percentages are,
(09:19):
and that shows up on the K one. Now that
is the only amount that's going to be taxed for
federal income tax purposes coming from the company, whether you
make the distributions or not. And then your wages or
your guarantee salary will also be taxed for federal income
tax purposes. But the only amount tax or Social Security
(09:40):
and Medicare is your w two wages or your guarantee
distributions guaranteed payments from your partnership. So this kind of
dictates you know how much tax you're going to have
out there.
Speaker 3 (09:56):
If you are.
Speaker 4 (09:58):
Running as a schedule see, and you have huge profits,
it might benefit you to look at becoming an escort
or a multi member partnership out there as well. You
got to run some key numbers out there and make
sure it's going to work and make sure that it's
going to benefit you not just today but over the
(10:21):
long run. And that's where you know, we get into
looking at this and helping you make that determination. We're
going to continue talking about taxes and tax deductions. Matter
of fact, if we're going to get into another segment
here later on of cost per mile. When you're operating
a truck, you kind of got to use these kind
(10:42):
of information to better your business. So make sure you
stay with us because as we continue to talk about
key tax reductions and then we get into cost per mile.
It's going to be a great show today. It's something
you're not going to want to miss. If you've got
some friends, family who's an owner operator out there, tell
them to tune in right now to Tax Talk for you.
Go to Tax Talk for you dot com and it's
(11:04):
tax Talk number four Letter you dot com.
Speaker 3 (11:08):
Hey, get into the show. It's gonna be a great one.
We'll talk to you right back after this.
Speaker 2 (11:14):
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. Called Taxation Solutions Tax Relief at eight eight
(11:35):
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
(11:55):
the IRS walk all over you. Stop the IRS now
call Ada he eight nine three 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
(12:15):
stock for you with more tax stock once again. Here's
your host, Barry G. Fowler.
Speaker 3 (12:24):
Hey, welcome back.
Speaker 4 (12:25):
Yeah, we're talking about trucking taxes, small business taxes. Hey,
there are a lot of deductions you can take as
a small business owner. Now, you know we're getting in
particulars about trucking and taxes today, but a lot of
this stuff can be applied to you and your business.
You just got to put thought to it. Is, Hey,
(12:47):
what am I doing in my business? What applies to
ordinary necessary business expenses? What can I deduct that I
haven't been deducting that applies to the business, And maybe
I've been paying from the personal account and maybe it
could be related to a business expense. So you've got
to find these deductions by looking at what you do
(13:11):
in your life. A good example, and I know a
lot of people. You know you don't miss this very much,
but I do see it. Missed your cell phone? You
use your cell phone in your business. Now what percentage
of your cell phone may be what matters. But you're
using your cell phone. You know, people call you all
the time on this little device here, and whether it
(13:33):
relates to your personal or business. The percentage that relates
to business is a tax right off. So when you're
making and taking calls on your personal cell phone, or
maybe you're running those apps that apply on your cell
phone as well. So like in our office, we use
our phone service, you know, Ring Central, and we have
(13:53):
the app on our phone. So whether I'm in the
office or not, they can transfer calls to me and
I can take the calls right there on my cell phone.
Speaker 3 (14:00):
And you know, it doesn't count on the minutes.
Speaker 4 (14:03):
It's usually on Wi Fi or whatever it's you know,
it could be through the data service part of it,
but it is a percentage use of the phone. So
you can take those kind of deductions that are out
there now. One of the key deductions that's out there
for owner operators excuse me.
Speaker 3 (14:22):
Is predems.
Speaker 4 (14:24):
You know, this allows a owner operator to detect a
set amount for daily meal and incidental expenses while traveling
overnight away from your tax home. It's a special rate
for the transportation industry. It's eighty dollars a night and
it's deductible eighty percent of it, so you get a
(14:46):
very good deduction.
Speaker 3 (14:47):
Now you've got to keep track of.
Speaker 4 (14:49):
Your nights that you are away from home. Now, the
first night you're away and the last night before you
the day you return counts is a half a day,
but all the days in between is a full day.
Speaker 3 (15:04):
Do you want to be able to track that.
Speaker 4 (15:08):
And keep track of it because it becomes a very
valuable deduction for you and the business. Now, don't come
reporting that you were on the road over nine four
hundred and sixty five days last year, because we all
know there's only three hundred and sixty five days in
a year. And if you're on the road every single day,
guess what, you don't get the deduction. You never returned home.
(15:28):
Your home was your truck. Now, they have a lot
of special requirements in this prettym and meaning that you
do have to have a tax home someplace you're supporting
and paying for, you know, rent or mortgage, utilities and
all that. So you've got to have a home you
return to. But you know, hey, if you're on the
road two hundred and eighty five days, you know three
(15:49):
hundred days a year you're returning home. You know, weekends
here and there, and you know maybe a week a
month or you know, whatever you may be doing the
deduction becomes valuable in lowering federal taxes, self employment taxes.
Who works, so you want to make sure you're tracking
those days and keeping track of p dms out there
(16:12):
while you're on the road and away from home. Now,
the other thing you get as an owner vehicle expenses.
And that makes sense, doesn't it. You're operating a vehicle
now for your semi truck, this is a qualified non
personal use vehicle, and you have to deduct actual expenses.
(16:33):
You cannot use the standard mileage rate. You get that
you cannot use the standard mileage rate. Now, I've seen
people try to take this deduction. I've seen CPAs and
other people doing taxes thinking hey, we can take the
standard mileage rate. Now you actually have to take actual
(16:53):
expenses fuel, oil repairs, maintenance, tires, cleaning, washing, your insurance premiums,
registration fees, your license, depreciation on the vehicle, or if
you're leasing a lease, expense. Now you kind of got
to watch this because your lease could either be an
(17:14):
operating lease or a capital lease.
Speaker 3 (17:16):
Capital lease, you've.
Speaker 4 (17:17):
Got to capitalize and depreciate operating lease. You're going to
be taking deduction every single month as you pay the lease.
You kind of got to look at these things. Repairs
and maintenance is not simple and cut and dry, because
if it improves the useful life of the truck, that
again would have to be capitalized and depreciated. Now, you
(17:41):
might be able to use full depreciation on this or
bonus depreciation or Section one seventy nine and still get
take advantage of taking the full deduction of the expenses
out there. But that's something your tax preprayers should be
sitting down and talking to you about as they're doing taxes,
because if you're in the very lowest tax bracket, you
(18:05):
may not want to take that kind of bonus depreciation
or accelerated depreciation in section one seventy nine. You might
really want to depreciate it over the useful life that
is out there.
Speaker 3 (18:17):
Now.
Speaker 4 (18:18):
The other thing that you're going to have is travel expenses.
It costs incurred while you're away from home overnight aren't deductible.
You know, hotels, lodging, you know, if you're traveling somewhere
taking flights, maybe your truck broke down and you've got
to have a hotel, you get those expenses. You're going
to fly home. The flights would be covered, tolls, parking fees.
(18:44):
All these things are deductible. You know, other business expenses
that you would need to think about, ordinary and necessary
communication tools besides your cell phone, computers, GPS, laptops, iPads,
office supplies software apps that you may be using on
(19:07):
your phone and you're not really thinking about it that
you pay pay for The business should be paying for
it because it's a business app. You know, your GPS,
all those fun things that are out there.
Speaker 3 (19:18):
Your eld.
Speaker 4 (19:20):
Association or union dues, interest on your business loans. All
these things are deductible, and you need to make sure
that you know what you're doing is you're getting every
possible deduction to bring that profit down from your business
to minimize the tax on your business. You know, payroll
(19:41):
taxes that you pay also bring down your income is
a deduction, you know. So you need to make sure
that you're finding every deduction possible in your business. And
that's why record keeping. Bookkeeping is is extremely crucial and
important in your business. Now, speaking of bookkeeping and everything else, man,
(20:06):
we're celebrating truckers this month. We're going to have some
new billboards coming out Long I ten in the Louisiana area.
So look for those around Hammond. I think it is
we're going to have those. But we have great specials
going on to celebrate truckers. Trucker Tax Tools has got
low cost bookkeeping for you. But if you come in,
(20:30):
you know this week next week, while we're celebrating truckers,
we're going to give not only our low cost trucker bookkeeping,
but we're also going to give away the first eight
months of this year's bookkeeping to get you caught up.
Absolutely free. Terms do apply to this, but give us
(20:51):
a call. Let us talk about our bookkeeping and how
we help you in the trucking industry keep track of
all your expenses. How we look to organize your systems
to help you maintain the accuracy of bookkeeping for your
business and find you the most tax deductions is possible.
(21:13):
To minimize the taxes, maximize the profit, maximize what you
can keep in your pocket by doing great bookkeeping for truckers,
owner operators, and keeping tabs on what's going on in
your business. Now you're going to want to give us
a cop at eight seven seven nine sixty six two
(21:34):
four seven seven again eight seven seven nine sixty six
two four seven seven to take advantage of this special
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Speaker 3 (21:57):
Hey we come back.
Speaker 4 (21:57):
We're going to talk a little bit about cost per
mile and why that is so important to know in
your trucking business. We're gonna do that right after the screen.
Speaker 2 (22:09):
We have only scratched the surface of today's show. Please
stand by as Barry gif 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. No matter
(22:29):
what 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
(22:50):
Tax Tools 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. Fallum.
Speaker 4 (23:15):
Hey, welcome back. You know, hey, record keeping isn't important.
I'm going to give you some great examples of why
good bookkeeping, great bookkeeping by truck or tax toles becomes
really important. Now I speak a Truck to Success, a
seminar put on by oh Ida's Foundation. Matter of fact,
that's coming up in October. I think it's a twenty
(23:36):
second of October. So get in and get register, come
to the seminar out there. But when I'm there talking
about bookkeeping and taxes, lease, purchase entities, all the things
we talk about to save you money about business. We
also talk about o ideas, cost per mile, and we
talk about their worksheet and how the things that we
(23:59):
do become import to working through. Knowing what your operating
costs is what it costs you to run your truck
every mile out there? Do you know what your break
even is? That's important for every business. Do you know
what it's costing you just to open the doors, just
to have your truck. Do you know what it's costing
you to run that mile loaded or unloaded. These are
(24:23):
things that you should know as an owner operator in
your business, and it becomes really really important. You know,
the old idea cost per mile, as they talk about
and we talk about it, it's not a fixed amount
but varies based on expenses. It's just fuel, maintenance, insurance,
and taxes. And with reason data showing there's been a
(24:44):
general increase. You know, back in twenty twenty three, to
the last survey that I saw, the American Transportation Research
Institute reported the average overall marginal cost of operating a
truck at two dollars and twenty seven cents per mile,
and that's increasing. You know, those costs out there are
influenced by fuel costs, maintenance, repairs, tires, insurance, premiums, taxes,
(25:09):
equipment costs, driver wage, you know, and stuff like that.
But what you're going to want to do is first
sit down and look at what your fixed costs are.
You know, your truck payment, your trailer payment. Now this
is the full payment amount, not just the interest that
you're able to dug, not the depreciation, but just actual
(25:32):
payment amount. Your insurance collision comp bobtail insurance, maybe your
cargo insurance, your health insurance that you're paying any licenses
and permits, your bookkeeping services. All these are going to
contribute to fixed costs. Now, also in there you can
(25:54):
throw in, you know, your telephone costs, things that you're
going to continue to have whether you're actually running a truck,
you know, cost per mile out there, you're going to
have these set costs still coming out. Just to have
that truck sitting there waiting to be running. Is your
(26:14):
fixed cost. Then you're going to have your variable costs.
You're going to have your tractor fuel, your reefer fuel,
your tires for your tractor, your trailer. You're going to
have your maintenance costs on your truck. Repair costs, they're
going to go into your truck. Maybe you have a
truck wash that you need to wash your truck, removing
(26:38):
the snow off the top of your truck, you know
in the winter, things like that. Maybe you have lodging costs.
Much of my truckers, unless you're traveling somewhere, you're not
going to have those lodging costs because you're usually staying truck.
But those things can occur I use when we do
our cost per mile, I'll use actual meal expenses, not
(27:01):
the per diem amount. So you know exactly what your
out of pocket costs is, not necessarily all your deductible costs,
but your actual travel meals you're incurring while you're on
the road, loading fees, unloading charges, lumper fees, your tolls,
(27:22):
your scales, and he finds you may incur along the road,
any cargo claims that you may have against you, your taxes,
your road tax, fuel tax, and then your miscellaneous expenses.
Now you're going to add these up. You're going to
(27:42):
come up with your your total fixed costs. You're going
to come up with your total variable costs. Wow, sorry
about that. Uh So I've got to be there real quick.
And then you're going to have what comes down to
your driver's income and your total costs of operation. So
(28:04):
you know the driver's income. It could be your income
that you're expecting to have or wanting to have. It
could be you know what you're paying other drivers out there.
But you've got to have income, right, you need to
figure this into you know, this equation. And so you
go through and do this, and then you've got to
track your miles. So you're going to take these costs
(28:26):
and you're going to look at what is my fixed
costs out there, and then what is my total.
Speaker 3 (28:31):
Cost per mile. So, if you've got costs.
Speaker 4 (28:34):
Out here, the more miles you run, the fixed cost
per mile is going to go down. So you'll see
a decrease of cost per mile the more mileage that
you run out there. If you're running less miles, your
costs are going to be higher because those fixed costs
don't change. Those fixed costs that you have are going
(28:58):
to be divided up by how many miles you run.
So the more miles that you do run during a month,
if you're looking at this on a monthly basis, then
you're going to see a lower cost per mile out there. Now,
all these other things that you have that are affecting this,
your variable costs. If you're not paying attention to your
(29:20):
fuel costs and everything, then your fuel costs out there
are you know, would be increasing and would increase your
cost per mile. If you run into major repairs or
a lot of maintenance during a particular month and maybe
not running isn't hard, then you're going to see that
cost per mile go up. Out there, So it's controlling
(29:42):
some of these expenses that you have to make it
make sense and make this work. Now, you know, sometimes
we're looking for expenses to move over here and it.
Speaker 3 (29:51):
Increases your cost per mile.
Speaker 4 (29:52):
So you may have to play with this a little
bit and say, you know, hey, you know, if I
didn't incur this expense, what would be my cost mile.
A lot of people don't even look at this, and
they're taking loads that they're running negative, so their income
per mile actually is below what they need to pay
themselves a living wage as people would say, or pay
(30:13):
themselves a reasonable salary. If you're taking a load that
you are not going to generate income, what are you doing.
You're hurting yourself, You're hurting the industry. This industry sometimes
gets hurt because people take loads that are not going
to be profitable for anybody in a truck. So when
you're looking at these things, you want to be able
(30:35):
to set yourself up to make money and make profit
so that you are making enough money to pay what
you desire as a wage in the business or income
from the business to support you and your family. Now,
when we look at these these kind of things, we're
(30:57):
always looking at round trip profits. You might take a
look at this calculation based on a particular trip, and
that's a little bit harder because you've got to be
looking at your income and expenses based on that trip.
Sometimes you're going to look at these things based on
your month and how you ran for that month, and
(31:19):
then you've got to kind of look at how the
income's recorded as well, because you may have a delay
in income because you didn't collect for thirty sixty ninety
days on invoices, So you would actually look at your
costs for that month divided by the income generated, and
you would look more on acrol basis, so you would
(31:40):
look at the invoices that you sent out for the
month to get down to your cost per mile based
on that revenue, not the actual revenue received. So you
kind of got to look at how you're going to
do this and how you're going to address looking at
this to have an actual good barometer for your financial
(32:03):
health in the trucking industry. Here, we've got a lot
of questions coming in Frank Jean Kevin. We're going to
address these questions and everything in the next segment here
right after the break, and we'll talk a little bit
more about your cost per mile and how knowing this
(32:25):
stuff benefits you and your business, kind of like knowing
what your break even level is for a small business
or a major business out there that you're running.
Speaker 3 (32:35):
And we'll do that right after this break.
Speaker 2 (32:38):
We have only scratched the surface of today's show. Please
stand by as Barry Chief Bowler 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 truck or tax tools
(32:58):
dot com, a solution and built specifically for truckers. Trucker
tax tools dot Com makes your life run smoothly. Let's
get back to tax stock for you with more tax
stock once again, here's your host, Barry G. Fallum.
Speaker 3 (33:19):
Hey, welcome back.
Speaker 4 (33:20):
Like I said, I'm gonna address questions man. The first
question we got in today was from Frank. When you
first get started, is it normal to not meet the
minimal needed to run the business? Hey, Frank, if you
can operate a business for a couple of years and
not meet the minimum to run a business, it means
you're running on somebody else's money, or you're spending a
(33:41):
lot of your own money to make that money to
make the business run and operate. You need to have
a strategic plan and a business plan to start making
money right away. And you may have depreciation that's going
to bring the deductions down or put you in a negative,
but cash flow is going to be to make your
(34:01):
business operate and operate in a positive. Now, you may
have some setup fees in the first couple of months
and everything else, but after that, if you're running like
in a trucking business, and you're not making money in
those first couple months, cash flow isn't coming in. Means, hey,
you're taking loads that aren't profitable to you, be you're
(34:24):
leased on with somebody who's not paying you enough, and
maybe you're lease on your truck or trailer or both
too much. You've got to look at your expenses to
determine that. Small businesses, yes, there's a lot of them,
fail within the first five years because you're not running
the business properly, you weren't set up in the business properly,
(34:46):
or maybe you're just in the wrong business and you're
just not running and gunning out there enough. There's a
lot of reasons small businesses fail and planning is one
of them. So you've got to plan for a profit,
plan strategic league to make money and make it in
business out there. Gene also asks, with most businesses, don't
(35:07):
you have a negative the first two years before you
see a profit?
Speaker 3 (35:10):
I say no. I say that you do.
Speaker 4 (35:13):
The planning ahead of time and plan how you're going
to break even or make money. You need cash flow.
Cash flow to support the business, pay the loans back
if you have loans, operating capital, pay yourself. All these
things become very very important in business. Next question we
(35:35):
got from Kevin. If a load has to go out
and the company will have more that will be profitable,
shouldn't you take the run showing you're a team player. Well,
first off, you're maybe a team player, but you're taking
the loss for that company. You should be able to
set Hey, this is what the load has to be
(35:57):
in order for me to at least break even and
make money for me in my business. You're not there
to make money for them. You're there in business to
make money for you and your family.
Speaker 3 (36:10):
Correct.
Speaker 4 (36:11):
You have to determine this is my cost per load,
This is what I need to make to go out
there and make money, so I'm not losing money. So
if you lose a dollar per mile or fifty cents
or ten cents per mile.
Speaker 3 (36:25):
You've got a lot to make up, just because.
Speaker 4 (36:27):
You wanted to be a team player for somebody that's
going to make a profit off of you. Because I'm
going to tell you they're not going to take a
load and do a load if they're not making money
off look, because hey, they're giving it to you at
a certain price because they had to do something supposedly
for somebody else. But they're going to take their cut.
Why can't they lower what their cut is to at
(36:48):
least keep you whole and to make money. So these
are things you've got to think about because, hey, you
know if you went out there to ran a thousand
miles and you know you lost one thousand dollars, well
they're going to have to figure out a way that
you're going to make that up. Well, if they're willing
to cut you back and you lose money, do you
(37:10):
think the next time are they going to make it
up and give you more money. No, they're going to
still take their cut, whatever that may be. When they
give you the load that goes out. So we've seen
that happen, you know where, Hey, we're going to give
you this load. I promise you, we're going to make
it better, and we're going to do this. It's kind
of like some of these companies we hear about who say, hey,
(37:34):
this is the greatest deal on earth. Sign here. You're
going to be at least on driver. You're going to
lease one of our trucks and trailers, and you've got
a three or four year lease, and three years into it,
you've got a year left, and all of a sudden,
the loads start going down, so they can repossess the
truck that you can't afford to pay, and now they
can turn around and take that truck from you and
start all over and give it to somebody else. So
(37:56):
it doesn't make sense to run a load that you're
going to lose money on. Let's break even, let's do better,
Let's make yourself some money. That's what it's about. See
people do this, and it has affected this industry many
times over. Somebody's always willing to take a load at.
Speaker 3 (38:12):
A cut rate.
Speaker 4 (38:13):
And if everybody takes loads and cut rates, what's it do?
It brings the rates down and now you have a
lot of trucking companies that aren't profitable out there, and
it just really hurts everybody in the industry. Keep the
load rate up and everybody in the industry can profit
and grow together. Another question from Kelly. Can a business
(38:35):
restructure to be able to get things in order that
hopes to gain a profit. Yes, I mean you can
talk to an attorney about this. You can look at
business restructuring, you can look at bankruptcy restructuring. A lot
of those things can set yourself up in business. If
you've had a downturn in business, it may be a
(38:55):
good strategy for you. But that's where I would tell
you sit down and talk with the bankruptcy attorney and determine, Hey,
is this the right way to go. And the one
thing to remember is that taxes very seldom come off
in bankruptcy. So if you're debt with taxes, sometimes you
need tax resolution and you need to structure a plan
(39:17):
to pay them back, especially if it's something like payroll
taxes that are out.
Speaker 2 (39:22):
There that.
Speaker 4 (39:24):
You owe and the company owes, and you need to
put a strategic plan in place for the business. And
those taxes don't necessarily go away, but it may be
something you include in bankruptcy and start planning as far
as that goes, Yancy, do I negotiate Holland contracts? And
(39:49):
I sound like I know what I'm doing. You know,
I've been to a lot of these old idea seminars
and I listen to o ideas experts there. In trucking,
I know axes, I know bookkeeping. I know trucking taxes
and bookkeeping inside and out. And that's why we have
truck or tax tools and were offering that great special
for the truck drivers. No, I do not negotiate hauling contracts.
(40:16):
You know my negotiation skills. I love to negotiate. I
love to work with people.
Speaker 3 (40:23):
You know.
Speaker 4 (40:23):
If I'm buying a new truck or a new car
or some of my I'm the first one to negotiate.
But I'm also the first one to walk away from
the table and not take a deal.
Speaker 3 (40:33):
You know. And my mom was buying a new.
Speaker 4 (40:36):
Car, and as I told her, hey, the deals and
no go just walk away, we ended up getting almost
exactly what we wanted. By walking away from the deal.
The dealership actually came back to us and did it.
I've done that multiple times in buying buying vehicles and
trucks and stuff. Is you got to be strategic. You
(40:57):
got to know what it's actually worth, and then is
it what's it worth to you? And if it doesn't
meet what you want, you walk away from the table.
It's the same thing in negotiating contracts and stuff like that.
You've got to be willing to walk away. You got
to know, hey, as the song goes, you got to
(41:18):
know when to hold them and know when to fold them.
And sometimes just walking away from a deal that doesn't
look right, doesn't smell right. And if it walks like
a duck, waks like a duck, gets a duck, get
out of there and don't take it. A lot of
times they come back to you and offer you a
better deal in the industry out there, So you've.
Speaker 3 (41:38):
Got to be willing to walk away.
Speaker 4 (41:41):
Even as President Trump said, you know, it's the art
of the deal. You sometimes you hold the hard line,
and you got to do it. If you've got a
good deal, you take it. But you've got to be
willing to negotiate and be willing to walk away if
it doesn't meet what you kelly. If you're structured, you
have to restructure anything with the IRS. Paperwork depends on
(42:04):
what you're restructuring. Is if it's because you're in dead,
you know, there's nothing restructuring as far as IRS paperwork.
If you restructure, such as moving from a single member
LLC schedule CE to a partnership, it changes the tax return,
nothing really to report to the IRS. You'll report it
(42:25):
on the ten sixty five that is partnership. If you're
moving to es Corp, you file the twenty five point
fifty three with the IRS and they will send to
you that you've been accepted, have the designation as an escort.
Now you'll have to do payroll, file your nine forty
one nineties W two's W three, all these fun things
(42:47):
in the state unemployment returns or state withholding returns, all
that stuff you have to do and you would have
to do with the state and then and you know
go from there. So all those things would happen if
you were to restructure that type of business, you know,
(43:08):
from being a schedule to see you know, one of
the things that we were talking about, and this cost
per mile just to get back to that real quick, uh,
you know, knowing your your daily or weekly cost of operations, Uh,
is important. So if you're looking at it a monthly report,
you know, you can break it down to kind of
(43:30):
a daily fixed cost that you have.
Speaker 3 (43:33):
You know.
Speaker 4 (43:34):
Trick in this is putting numbers that you can actually
relate to and which you can recognize, you know, problems
and stuff with. So it's kind of modifying, you know,
your cost per mile to determine. Hey, when I'm running
the truck and everything else, you know, what does it
cost to me standing still?
Speaker 3 (43:53):
That's your fixed cost?
Speaker 4 (43:54):
What's it costing me just to operate this truck and
keep it going from there? If you're not incurring a
lot of repairs and maintenance costs, you know, I suggest
you set up a maintenance fun and you use that
number in there for your maintenance costs and repair costs,
so that you know that you're pulling something out every
(44:14):
single load, every single mile to cover those costs. Stuff
with you, Hey, you know, time flies when we're having
fun and talking taxes and bookkeeping and truckers and small
businesses and everything else out there. Hey, don't forget we
got that special this month for truckers. Celebrating truckers. Give
(44:35):
us a call at eight seven seven nine sixty six, two, four,
seven seven. Again, first eight months of catchup of tax
work is going to be absolutely free when you sign
up for our bookkeeping here through twenty twenty five twenty
twenty six. Give us a call hey, as always, have
a great, God bless glorious week out there. Enjoy what
(44:57):
you do, live for your family, love for God. Just
do what you need to do to keep your business
and run your business the right way. Tell you to
have a great week. Join us right back here on
W four CY Radio. Make sure you connect with us
at tax Talk for You and that's the number four
(45:18):
the letter you dot com. Tax Talk for You dot Com.
Be here every Monday, ten am Eastern time again on
W four CY Radio.
Speaker 3 (45:28):
And if you.
Speaker 4 (45:29):
Connect with us over on Facebook or at tax talkfor
You dot com, you'll never miss an episode. And if
you do, go to our podcast We're on all the
major podcast sites. I hired, Spotify, you name it, we're there,
Go find us, go listen to our podcasts. But be
here every Monday ten am right here at W four
(45:51):
c y rate. Thank you, and again, have a God blessed,
glorious week.
Speaker 2 (45:55):
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,
(46:16):
Then you need Tax Talk for You, hosted by tax
and trucker expert Barry G. Fower EA. Tune in ten
am Eastern Time every Monday right here on W FOURCY
Radio and Talk for TV. Don't forget to check this
and past episodes at tax TALKFORU dot com. See you
(46:37):
next week at W fourcy dot com
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Ding dong! Join your culture consultants, Matt Rogers and Bowen Yang, on an unforgettable journey into the beating heart of CULTURE. Alongside sizzling special guests, they GET INTO the hottest pop-culture moments of the day and the formative cultural experiences that turned them into Culturistas. Produced by the Big Money Players Network and iHeartRadio.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.