Episode Transcript
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Speaker 1 (00:00):
The topics and opinions express in the following show are
solely those of the hosts and their guests and not
those of W FOURCY Radio. It's employees are affiliates. We
make no recommendations or endorsements for radio show programs, services,
or products mentioned on air or on our web. No
liability explicitor 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 choosing
(00:21):
W FOURCY Radio.
Speaker 2 (00:27):
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 man. It's a Monday morning. We all
know it. Things happen, kind of get lost in the
in the muck of the weekend and trying to get
everything going this week. It's just the way it is.
You know. If you got questions, tax questions, bookkeeping questions, hey,
put them into the radio station here and let us
(01:24):
get them answered for you. You know, it's it's going
to be a great morning. You know. We got up
it was raining already this morning, had some things we've
got to take care of on the ranch, and we
get in here and it's pouring cats and dogs. Hey,
it is what it is. But taxes are still there.
And one of the biggest questions besides the question my
(01:45):
producer had last week of Hey, what's your show going
to be about this week? And we went trucking in taxes.
You know, it was such a busy week last week.
We had more and more truckers calling to get their
bookkeeping start with us so that we could actually help
them save money on taxes. But the big question came
(02:06):
back to us is, hey, we've heard all about the
tax cuts that are expiring at the end of twenty
twenty five. If this as Trump would put it a big,
beautiful bill. I still think it's overrated and it still
needs to be a balanced budget. But hey, only you
and I have to balance our budgets can't live on
(02:27):
debt forever. Government evidently figure figures they can live on
debt and charge our grandkids, great grandkids and probably great
great grandkids are the ones that are going to have
to make up what our generation and generation before us
causes debt to go through through the roof, I mean,
(02:48):
through the ceiling age you might want to call it.
You know, they keep raising the debt ceiling. But what's
going to happen if this big beautiful bill with extending
the tax cuts doesn't go through? You know it should,
but you know, there is a lot of Congressmen that
are now falling on the side of wanting a more
balanced budget. And then you've got the other side that
(03:10):
wants to spend freely and spend everything and anything and
whatever they can spend is great. But what's going to
happen is is your standard deduction, first thing and foremost
is going to shrink. I mean, in twenty seventeen, before
these tax cuts went into effect, your standard deduction was
about six thousand, three hundred and fifty dollars for single filers,
(03:30):
twelve thousand, seven hundred for joint filers twenty twenty five.
These amounts are now fourteen thousand, six hundred for single filers,
twenty nine thousand, two hundred for married filing joint and
you know, so you got all those inflationary adjustments and
everything else, so we don't know exactly where the standard
(03:51):
deduction would actually fall, probably be around eighty three hundred
and about sixteen thousand, six hundred for joint five. You know,
that's just guessing based on you know, increases for inflation
and other stuff out there. So that's going to have
a major impact. Now you might be able to itemize
(04:11):
a lot more that's out there. If you're a W
two truck driver or even an outside salesperson that doesn't
get reimbursed for the mileage they've got to do for
seeing clients, or if you're a W two trucker, your
perdems that you used to be able to get those
might come back. But as an owner operator and any
(04:32):
other small business man, you're going to see the impact
on me. On the corporate level. One of the biggest
changes that the Trump tax cuts put in there, the
corporate rate dropped to twenty one percent, and that's a
significant drop from thirty five percent. You know, this cut
to corporate tax is actually permanent. It's not going to
(04:53):
expire even if a legistration does. So that's a good
thing because you've got to remember, when a co operation
pays taxes, they're not paying it out of their coffer.
They're paying it out of what they collect from you
and I. So when you're at the store or you're
buying merchandise that has the tax is embedded into it,
(05:14):
and therefore you know you're going to pay it. When
if that rate was to go back up, they're going
to increase those prices and pass it on to you
the consumer because they've still got to make a certain
net income. You know, people don't talk about that. People
don't talk about what the corporate tax rate is and
what it does to you and I as the consumer.
(05:37):
But you know, maybe they really should look at the
impact to the consumer. See, now, when you're paying the tax,
you pay your income tax, and then when you go
in and buy goods or services, you're having to pay
the income tax that they're going to pay as well.
The multiple levels of taxation that you just don't feel
it and don't see it. Do you think it's great
(05:59):
that we're going to tax somebody like Excellent Mobile or
whatever company out there to think it's going to come
out of their net income. It comes out of the
net income, but only after they collected from you and I.
Something that really will impact you as an owner operator
or as a small business person is that pass through
(06:19):
business income deduction that could go away. So this is
that qualified business Income Deduction GBI, that twenty percent deduction
that you get to take, whether you're a pastor company
or a schedule see. And you know this means that
(06:40):
you're a sole proprietor with one hundred thousand in business income,
for example, you can immediately deduct twenty thousand of that
income and not have to pay tax on it. So
big savings there that could go away if they do
not pass or put in to the law making these
tax cuts permanent. So you know, many Republicans support it,
(07:05):
making it more likely that it'll be extended thanks to
you know, Republican dominated Congress. However, if they allowed to
expire small businesses, you're going to expect a significant boost
your tax Billy, if if you're happened to be in
a twenty percent tax bracket, let's say, and you don't
get to take off this this twenty percent of it
(07:26):
is tax now. So you know, that's four thousand dollars
added to your taxes right there because of this one
beast of the law that if it doesn't get past it,
gosh you money. You know. One of the things that
the Trump tax cuts did back in seventeen, uh it
did put some caps on your state and local taxes.
(07:49):
It was limited to ten thousand, and it was bad
news for high income taxpayers and high tax states like California,
New York, Jersey, many of them aid more than ten
thousand in state local taxes. Hey, you know, you would
think Democrats would before this because it would be taxing
(08:09):
high income people more and it would affect lower class,
lower income, middle income a lot less. But a lot
of these guys are from these high tax rates and
want to get every bit of the taxes take it
off at the federal level. Things don't always add up
and doesn't seem the way it should be. Somebody would
actually explain to people what this cap on state and
(08:33):
local taxes does? You know? You that say the high
income people should be taxed more should be for this.
Those that want to see lower taxes, lower tax rates
should be against setting this limitation out there because you
should be able to deduct the taxes you're paying at
the state and local level to the fullest extent against
(08:57):
your federal income tax as well. Opinion my soapbox expanded
child tax credit so you with children. You know, one
of the Trump provisions that assisted the lower and middle
income taxpayers was the expansion of the child tax credit
from one thousand it was up to two thousand. Now.
(09:19):
This extension is of the elevated tax credit is supported
by both sides. Some on the Republican side are a
little opposed to it, but I think everybody is for
it because it does give money to the back to
the families with children. So, you know, we could see
some of these things being passed, but some of these things,
(09:41):
you know, may take a little bit more to get
over the hurdle because what they're looking for is more
and more money coming into the federal government into their coffers. Now,
they don't care what the impact is to you or
I or anybody else in America. What they are concerned
with is how much money they can get coming into
(10:03):
the coffers to redistribute or spend or overspend whatever it
may be. Heyfles break We're going to talk about some
more of the things that will happen if they do
not pass the prop tax credits tax cuts from twenty seventeen.
Will be right back after that.
Speaker 3 (10:23):
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 owe the IRS
or are going through an IRS audit, don't go at
it alone.
Speaker 2 (10:40):
Called Taxation Solutions tax.
Speaker 3 (10:42):
Relief at eight eight eight nine three zero one zero
one six. We are your solution for IRS debts, audits,
back taxes.
Speaker 2 (10:53):
Garnishments, leans and levees.
Speaker 3 (10:56):
Whether you're an individual or business, you need a solution
and a strong, aggressive tax resolution. Don't let the I
R S walk all over you. Stop the IRS now
call eight eight eight nine three zero one zero one
six or go to Taxationsolutions dot net now for a
(11:16):
free no obligation consultation. Let's get back to tax stock
for you with more tax stock once again, here's your host,
Barry G.
Speaker 2 (11:30):
Fowler.
Speaker 4 (11:33):
Hey Jerry, thanks for tuning in and asking the question
about is there a simple way to do truck or bookkey? Absolutely,
you know the first one is a given. You call
truck or tax tools, and we'll help take care of you.
We're gonna go over later in this segment or the
next one some of the processes that you can do
(11:57):
as an owner operator for do it yourself, you know, Bookie,
and we're going to talk about it. Come back to
that and talk about it. But very good question. And
I hope you're being safe out there in the road.
Let us know where you're at. If you're tuning in,
go ahead and text us and chat with us, or
we're even calling, let's talk to you and you can
tell us how your trip's going and where you are
(12:18):
in the country. We always laugh because we're at the
truck shows and we're talking to people. We always tell
them we'll take phone calls from you no matter where
you're at, if you're in your truck driving, unless you're
driving through Nebraska or West Texas, because we just know
you're calling because you're bored and there ain't nothing else
out there, you know. We always laugh with our truckers
about it, just because we're having fun. We'll take your
(12:40):
call anyway, but we will cut you off after a
little bit of time if you're really really bored out
there and just want to talk about bookkeeping in taxes,
which generally turns into family branching, friends, you name it,
we go through you're friends of ours, So you can
appreciate that. Hey, some of the other things that do
change if they do not pass the Trump Tax Credits
(13:01):
or extend them. The Trump Tax Cut Credits reduced the
property values on which home owners can deduct their mortgage
interests from seven hundred and fifty thousand or two seven
hundred and fifty thousand from a million. If the Trump
Tax Credits credits expire, then the million dollar limitation would
be back in there. The Trump Tax Credits raise the
(13:25):
limit on deductions for charitable contributions to sixty percent of
adjusted gross income from fifty percent before the legislation passed.
The fifty percent limit would also be reinstated if Congress
didn't extend Trump Tax Credits. Now, if you've given that
much money to charity, you know, heyk God bless you,
and then hopefully you know it's it's some really good
(13:47):
charities out there that you're supporting, and it means you're
making some really good money and maybe your debt free
and you don't have to worry about it. One of
the other things that Trump tax credit did is boost
the state and give tax exemptions, and those could be repealed. Well,
you know, this affects only small percentage of Americans, but
(14:08):
it is about you know, passing on family maybe family land,
maybe family businesses. Maybe you run a small business has
become worth quite a bit and you're trying to pass
into your family the gift the estate, those taxes can
hit you hard. So for twenty twenty four, the estate
(14:31):
tax exemption is thirteen point six million, but if that
legislation expired, it would go down to five million. So
if you've got land, maybe that's been in the family
for years and it's become worth a lot, and we've
known a lot of ranchers and family people that have
had land that passed on generation after generation and now
(14:53):
be worth maybe six or seven million, Well they're going
to be paying a high percentage of the other couple
of million, and a lot of them people can't afford
to pay those taxes on that inheritance and they have
to sell their their property or their land, which is
really really sad. You even see that today house values
(15:14):
where they've gone and gone up, and it really could
impact you or the family. So in basically looking back
at this, if Congress doesn't extend the Trump tax kit,
Americans are going to be stuck with one of the
largest tax hikes in history. You the average taxpayer is
(15:36):
going to see a twenty two percent tax hike. The
average family afford is going to see at least seventeen
hundred dollars tax hike. Child tax credit is going to
be cut in half for forty million family Nearly every
taxpayer is going to see their guaranteed deductions slashed by
(15:56):
more than half. Twenty six small twenty six million small
businesses are going to be settled with a huge tax increase.
You know, this could be a very big problem for
here in the United States. It would probably if this
(16:17):
doesn't pass, be something that could very much hurt the economy.
It's going to hurt your mind and everybody else's pocketbook
and affect this country for probably years to come. Granted,
over a couple of years, everybody will get used to it.
But who really wants a twenty two percent tax hike?
(16:39):
Which of the forty million families are willing to give
up their child tax credits? Small business people, people that
are trying to run a business to see a huge
hike in their federal income tax because they lose the
qualified business deduction. Not you, not me, not any trucker,
not any owner operate out there. These are the things
(17:02):
that matter. So you know, hey, if you really want
to push this through, I say, hey, call your congressman,
call your senator. Let them know that they got to
pass and make permanent the Trump tax credits, tax cuts.
That's what you want to do out there. And we
were talking about from Jerry the question about bookkeeping and
(17:26):
making it easy and then do it yourself. You process.
You know, the question comes down to do truck drivers,
owner operators need bookkeepers? You know, to put it in
your circumstances and your preferences. Absolutely. I mean, if you
love coming home working with numbers and sitting down and
sitting at a computer and trying to figure out your
(17:47):
expenses and want to do your your bookkeeping and maybe
put it in a spreadsheet and then trying to figure
out how to summarize everything for your tax preprayer at
the end of the year, and then Fred over do
I have all the deductions and everything else? Hey, do
it your self. Bookkeeping might before you do it yourself bookkeeping.
You know you can keep track of these expenses and income,
(18:12):
maintenance records, parking receipts, repair records. But if you work
with a bookkeeper, it can allow you to remain organized,
help you identify cash flow and cash flow problems, streamline
your bookkeeping, maximize your tax deductions, and help save you money.
(18:32):
But in order to keep your books in order as
an owner operator, keep a logbook, make sure you review
your finance, keep your business and personal accounts separate, save
all your receipts, update your books regularly and often, so
you know, keep a lot book. You know it's to
help you keep your finances in order. It can be digital,
(18:56):
it could be physical, whatever you're easier to work with.
If you keep a digital log book, you know, keep
it backed up so that you don't don't lose anything.
And if you you know, hey, if something goes wrong
on your phone or on your laptop or on your tablet,
wherever you keep a track of it, you know you
can lose lose documents something goes wrong, so keep it
(19:20):
back up, make sure you're tracking everything, all the expenses
that are there for your business, and then review it.
You know it doesn't mean just look down there, look
at the numbers. It means run the numbers. Look at
your cost per mile, Look at the costs that are
going out. Are they ordinary and necessary? Are you spending
money that you shouldn't be spending on things that you
(19:40):
don't need or aren't required to run your business? Your
first goal is to make a profit. Second goal is
to put money away for retirement savings, emergency funds, money
for repairs or maintenance, future repairs and maintenance, something that
will help you get through when that inevitable problem happens.
(20:02):
We always tell people keep your business and personal account separate.
It's kind of like trying to keep everything in order
in buckets. You've got a bucket here for your family,
and you've got a bucket here for your business, and
only business should be coming out of the business bucket
and personal comes out of the personal. Not a combined bucket.
It's separate buckets. And then last, save all your receipts,
(20:24):
keep them in good order. Hey, you know, we tell
you this because people have learned a lesson the hard way,
and we'll talk about some of those lessons that people
have learned right after this break.
Speaker 3 (20:37):
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. Trucker
Tax Tools handles all your bookkeeping in taxes. No matter
(20:57):
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.
Speaker 2 (21:10):
Go to Trucker tax Tools dot com.
Speaker 3 (21:12):
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 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
(21:33):
to tax stock for you with more tax stock once again,
here's your host, Barry G.
Speaker 2 (21:40):
Feller.
Speaker 4 (21:43):
Hi, welcome back. We were talking about buckets not for
catching rain or water, but in different buckets that you
use for your business to capture your expenses, in your
income and where it should go. Now, there's problems when
you have one bucket that you're using for business and personal. Now, first,
(22:03):
if you are an LLC or an INK, you're set
up as a business, a separate entity. You know, having
one bucket, as most lawyers will tell you, is it
breaks what they call the corporate veil. Now I'm not
an attorney, so don't take this as legal advice. I'm
just an enrolled agent. Never wanted to be an attorney.
(22:24):
Matter of fact, I don't like most attorneys. But I
do have friends that are attorneys that we do use
because they do serve a useful purpose. Unfortunately, you have
to have one that's a friend somewhere. But you know,
you've got to have separate buckets out there for that
corporate veil at the very least. But the other problems
you run into and you have one bucket and you
(22:46):
go through an on it, the irs is looking at
everything in and out of this bucket. So if you've
got a separate personal bucket and only personal things went
out of it, easy to track and show them that
this money was transferred from the business, either in payroll
or distributions, and went into the personal and the personal
paid for it. Over Here is the business bucket. Everything
(23:09):
that went into the business bucket was business. Everything that
went out expenses and everything else was business, not personal.
All business, and then you make the transfers for distributions
and payroll over to the personal go from there. Keeps
it cleaner. If you ever go through an audit with
(23:29):
the IRS or state taxing, you can go and show, hey,
this bucket over here was all business. And then it
becomes easy to identify the money that went in and
transferred were distributions from your business or was payroll from
your business. And I do this whether you're doing a
schedule to see a ten sixty five an eleven twenty
(23:52):
s and it definitely an eleven twenty. So whatever tax
forms you happen to be using, those are the ones
that we've got to sit down and we've got to
look at. So we've got to make it make sense.
Speaker 2 (24:04):
Now.
Speaker 4 (24:04):
As an owner operator truck driver, your tax situation is
unique from other businesses. You know, you do file and
pay taxes just like any other business owner, but you're
also eligible for deductions that are specific to you as
a truck driver. And so if you need more information
on how to file and pay taxes as an owner
(24:26):
operator truck driver where you're out a matter of fact,
just give us a call. We can set you up
on a very low weekly fee for our owner operators.
We started twenty five dollars a week. It's really what
we make it really simple. And you got to do
is call it eight seven seven nine six six two
four seven seven again eight seven seven nine sixty six
(24:49):
two four seven seven. You're not going to talk to
a salesperson. You're gonna end up talking to one of
our staff here that you know, our receptionist or me
a our admins, and we're going to talk about what
we do and how we can help you. I was
talking to a trucker just the other day. I know
quite a few last weeks, so you know where we're
(25:11):
getting them started. But he goes, I just need to
know you're gonna make it easy. Yeah, we're gonna make
it easy. You can either send us an email of
PDFs your bank statements, your credit card statements using business,
your settlement statements, your financing agreements, and things like that,
and we take it and run. As a matter of fact,
(25:31):
if you give us accountants access to some of the banks,
we can pull the bank statements ourselves, credit card statements ourselves,
and we can get them right into our system. And
where we do things better and faster for you. Settlement statements,
you can email them and put them in our secure portal.
Whatever you want to do, we're going to make it
easy because the last thing you want to do is
(25:52):
spend time helping us gather all this information when you're
home with your family, when you're supposed to be spending
time with you know, a couple of things that you
need to be doing as an owner operator. One, make
your estimated tax payment. You know, the IRS does require
you to make quarterly estimated tax payments based on your
(26:13):
business profit. Now, being self employed, if you're running a schedule, see,
you've got to cover the self employment tax, which is
the fifteen point three. You've got to cover your federal
income tax and your state income tax. So if you're
expecting to owe more than one thousand dollars, you have
to make quarterly estimated tax payments of both self employment
(26:37):
and income taxes. Now, we calculate these things for you
being a client of ours, and tell you, hey, these
are the estimates that you should be making. Now. We'll
also do a lot of tax planning with you to
make sure that, hey, we're getting all the deductions we
run what we call a tax minimizer to make sure
that there isn't any deductions that you should be taking
(26:59):
that you have been taking, especially when you're doing bookkeeping
with us. And the other side of it is is
we're looking to help you maximize your profit. That includes
taking every deduction you can, making sure the deductions that
you aren't taking aren't legit, making sure the things that
you're paying with after tax dollars that could have been
(27:21):
pre tax are moved to the right bucket so that
you're getting the deductions. So sometimes maximizing the deductions saves
more money in your pocket from taxes. So we've got
to look at everything that is out there. So you know,
when we're estimated tax tax payments, we're usually running on
the safe harbor method, which is calculated by looking at
(27:44):
your prior years taxes and calculating the right amount and
then saying, hey, you got it to pay these over
the next you know, four quarters.
Speaker 2 (27:53):
Now.
Speaker 4 (27:53):
The other amount it's a little bit harder to do,
is your actual estimates, but it's it is you you're
not paying more than you should. But you know, a
lot of times, you know, when we're trying to do
this you're a little bit hind on getting stuff to us,
so it makes it a little bit more difficult. And
we got to look at the ebbs and flows of
your business. So if you're new trucker, owner operator, even
(28:17):
an independent contractor, you know you're better off using the
actual income method for estimating quarterly taxes and not necessarily
using safe harbor. Now, if you've worked a really good job,
we've got to look at the safe harbor too, because
you may have a lot more taxes that you have
to pay in as estimated taxes unless we can make
sure that we get the actual right amount based on
(28:40):
your actual expenses. Now, we look at every tax deduction
out there that you can have. As an owner operator,
even a small business owner, you got to look at
every tax deduction that's there. You know, as an owner
operator you may have at least payment on your truck
has to be looked at. Is it right? Is the
(29:02):
lease payment a operating lease or capital lease. Got to
make sure you have the right definitions there, making sure
you're deducting all your fuel expenses, you're bookkeeping and tax fees,
your office supplies, maintenance fees, your uniforms, your truck supplies, licenses, permits, training, communications, insurance.
(29:24):
So any expense that you have record of and is
ordinary necessary for your business can be considered tax deductible.
You know, we have an extensive list of items that
are tax deductible. Matter of fact, when I speak at
Truck to Success oh Ida foundations, Truck and Success seven
(29:46):
are mainly for truckers that are looking to move from
maybe a W two driver out to being their own
owner operator, their own business owner, or even owner operators
that are looking to expand their business and get their
own authority and want to know all the rules and
regulations all around that. When I'm out there speaking, we
go through an extensive list of tax deductions and deductible
(30:11):
expenses for you as an owner operator. Now that list
is quite extensive that is out there, and so you know,
we try to make this easy and simple for owner
operators that are using us for their bookkeeping and taxes,
and we have to make it as easy as possible
(30:34):
for you the owner operator. Now, you as an owner
operator and you as a small business owner. Sometimes you're
worried about risks of audit. What happens if I take
too many deductions? What happens there. We come back after
this break. We're going to talk about reducing the risk
(30:54):
of audit on your business. I want to do that
right after this.
Speaker 3 (30:59):
We have only scratch the surface of today's show. Please
stand by as Barry G. Fowler will be right back
with tax talk for you. As an owner operator. You
already spend too much time away from your family.
Speaker 2 (31:15):
Stop spending time doing paperwork.
Speaker 3 (31:17):
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 with more tax stock once again.
Speaker 2 (31:35):
Here's your host, Barry G. Fowler.
Speaker 4 (31:40):
Well, welcome back. Risks. You know you take risks. You
get behind the wheel of big eighteen wheeler and you're
driving down the road. We take risks every day when
you know, you get up in the morning, to the day,
go to bed at night. You know, risks. But you
can reduce one of the risks out there, risk of
it on your business. You know, the I R. S
(32:02):
is always tasked with selecting taxpayers for audits. I mean
it's enforcement. The threat of audit keeps people honest, sometimes
to the extent of not taking deductions that they should
be taking. But the IRS selects taxpayers or audits in
basically two ways. The first is they suspect dishonesty or
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practices that don't adhere to the tax law. The second
is random selection of tax returns for audit to check
tax compliance. Now, if you want to reduce the likelihood
of a tax audit or reply to a random audit,
it's important to claim tax deductions and tax credits which
you have documentation in support, but out supporting documents, the
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IRS may disallow the deductions or credits or and then
charge interest penalties, even fraud penalties. Now using the risk
one savior receipts too. Don't take deductions that you don't
have support for. You know, we tell people this all
the time when we've seen it. You didn't do your bookkeeping,
(33:12):
you gave around numbers, round numbers is going to be
a big target in your business. Using numbers that are
disproportionate to what your business is. The IRS computer systems
randomly choose people, and sometimes it's based on percentages. I'll
give you a good example. And we're going to come
(33:32):
back and we're going to talk about pre dams in
a minute. But somebody came in. They did one hundred
and fifty thousand dollars. I'm using rough numbers here and
growth striking income. But they claimed that they spent sixty
thousand dollars in meals while on the road. Now that's
really absorbing it and really doesn't pass the smell test.
(33:55):
We had to ask them how many nice were you
on the road? You know? And he sits there and
looks at us and says, well, you know, I was
on the road three hundred days. Okay, you were spending
two hundred dollars a day in food? Well, I had
to order out and I had it uber to my
truck every night that I every day that I stopped.
That's still quite a bit of money. It does not
(34:16):
make any sense. What'ssoever? Well, am on a health kick. Okay,
that still doesn't make any sense. Thank god, we weren't
doing the bookkeeping form. We actually documented actually taking per
diems for the nights that are on the road instead
of taking what he claimed that he could support. But
he said he paid cash. You know, life is life,
(34:38):
But those are the kind of things that get you
into trouble. So keep your receipts, keep your cancel checks,
keep your log books or any other valid proofs of
payment documentation, and keep it for a minimum of three years.
Don't take deductions that you don't have support for. Don't
take deductions that are out of the norm out there.
(34:59):
You know, if you deducting five thousand dollars in office
supplies for paper and pencil and stuff like that, and
you're a trucker, probably out of the realm. So kind
of keep an eye on what those expenses are. One
of the expenses that truckers get that is unique to
their industry is per deemed. Now, unfortunately, a W two
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driver cannot take per diems because it was removed in
the Trump tax cuts of twenty seventeen. Unreimbursed business expenses
that W two truckers used to be able to take,
they can't take them. Their company can pay the per
diems that are non taxable, but they can't take this
(35:43):
as a tax right off on their taxes. But as
an owner operator Trump driver out there, per diems is
one of your largest tax deductions you get to take.
In the easy terms. Per diem deduction is a tax
deduction to the IRA allows to substantiate ordinary and necessary business,
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meal and incidental expenses paid or incurred while traveling away
from home. You know right now that had been increased
October one, twenty twenty four, to eighty dollars per day
in the continental US. Now you may hear the amount
of the deduction quota is sixty four because the IRS
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only allows you to take eighty percent of per diem.
So there are changes as the IRS is going through it.
A couple of years, the IRS allowed one hundred percent
per diem, but it's now eighty percent of that eighty dollars. Now,
the per diem rate last year from January one, twenty
twenty four through September thirtieth was sixty nine dollars. So
(36:48):
you have to for twenty twenty four, can you know,
calculate your per diems the number of days on the
road from January through the end of September and then
October through the end of the year. So you know,
if you're an uner operator, you get to claim the
tax deduction for each day that you're away from your
tax home. And you've got to have a home otherwise,
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if you don't have a home that you're maintaining and
covering expenses for it, you're now considered a tax turtle.
Your home is your truck, and you're not getting these
per diems. So you got to calculate the days that
you depart and the days you arrive home. And you
only get a half day for the day of departure
(37:30):
and the day of arrival, and then you get a
full day for everything else in between. So, you know,
it's one of those things you got to make sure
you're you're calculating and you're going through and doing the
correct way. One of the other things that you can
take advantage of appreciation Section one seventy nine. Now, you know,
(37:52):
we've kind of got to look at this thing and
weigh this thing out because you know, I've heard a
lot of people that are in this tax enter street
and they look like a hero tell you to go
buy a new truck because they're going to save you
a bunch of money and your taxes. Well, what they're
doing is using your depreciation to make them look good.
The first thing we tell our truckers and ask them
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is you know, is there a reason or a purpose.
Maybe you have a lot of repairs that you're doing
in your truck over and over again. Yes, maybe it's
a good time to be in that truck. Maybe you
need better gas or fuel knowledge. Maybe a newer truck
would provide that. Maybe you're going to be transporting in
that gide awful state that has rules about emissions that
(38:33):
are above and beyond anybody else, and you've got to
have a newer truck to be able to go and
haul in that state. These are all good business reasons
potentially to get a newer truck and then take depreciation,
whether it's Section one seventy nine or bonus depreciation. We
look at that. You know, Section one seventy nine is
(38:54):
basically using the first year expensing, meaning that you get
to deduct long term asset here currently now. As one
of our other clients, we advised them against using Section
one seventy nine because they were looking to shut down
their business and he was going to become a W
two driver. They said, no, we want the tax savings today.
(39:16):
Got them their tax savings. In the next year, they
sold their truck and subject to ordinary income, capital gains
on all of that and owed a lot of taxes.
Not extremely happy, but they didn't listen when we were
telling them what was going to happen. And now they
owe taxes that are out there, so you've got to
(39:37):
look at it. You know, there are thresholds, there are maximums.
Most of the trucking companies we know are not going
to hit them, and most of them aren't going to
be phased with the phase out out there. Now. If
you happen to be running five, six, ten, twenty trucks, yes,
your business is probably going to have a lot of
gross income, a lot of net income, and you know,
(39:58):
maybe you might hit those thresholds. The one good thing
about section one seventy nine, you don't have to claim
the full amount. It's up to you decide how much
you're going to deduct under that section one seventy nine.
And but whatever amount you don't claim must be depreciated
over the useful life of the asset. So the main
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advantage of one seventy nine unless you take a higher
deduction immediately. By receiving higher depreciation deduction deduction today, you
will get to reduce your current tax bill. It's especially
helpful for a new business that may be having cash
flow problems. Some of the disadvantages of this your income
(40:41):
increases to move you to a higher tax rate by
accelerating your business deductions, you'll have fewer options in the
future to reduce your taxes when your business might be
in a higher tax bracket. You also have a higher
risk of recapture of that depreciation when you sell that
long term asset. Things you've got to consider and look at.
(41:03):
Proper planning is what's going to make and help you
make the best possible decision on your appreciation. You know,
we enjoy talking about taxes. What do you want to hear?
What questions do you have? Hey, if you go over
to the Trucker Tax Tools Trucker tax Tools dot com,
go to our contact page or go to our email
(41:24):
support at Trucker tax tools dot com. Send in your questions.
I'll address you questions next week right here on this show,
because we're here every Monday, ten am Eastern Time on
tax Talk for You dot Com. Hey, if you go
over to Facebook, follow us over there, never miss an episode.
We get to talking about taxes, trucking owner operators, small businesses,
(41:48):
tax relief if you owe the irs. Hey, we've got
a great podcast called Tax Solutions one oh one. You
want to know how to solve tax problems? Hey, that's
a great place to start. We'll go to Trucker tax
tools dot com. Let us know, Hey, what's your problem,
what issues do you have, and we will come up
with a way to solve those for you as quick
(42:11):
as possible. Hey, we enjoy bringing these things to you.
You got to let us know what we can do
to help you. If you call us a trucker tax
Tools eight seven seven nine sixty six two four seven
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seven seven, you can join our fleet of truckers that
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(42:34):
thousands of truckers over the last ten years with their bookkeeping,
with their tax problems and tax solutions. We bring you
that information right here at tax Talk for you to
connect with us here. Thank you for being with us.
You have a god bless and very glorious safe week
in all that you do, and we'll see you next Monday,
(42:57):
ten am Eastern time right here in W four CY
Radio and tax Talk for you dot com. Thanks again
for tuning in. Have a great week.
Speaker 3 (43:06):
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,
(43:27):
Then you need Tax Talk for You, hosted by tax
and trucker expert Barry Gfouer 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 next
(43:48):
week at W fourcy dot com.