LANDLINE
DEC07/JAN08 ISSUE
TAX TIME
BUYING VS LEASING
It’s that time to start compiling the information you need to have your 2007 income tax return prepared. Hopefully you maintained some type of bookkeeping system throughout the year and are not going to be subjected to any surprises concerning your finances when the return is finalized.
I have not received
my 1099’s. What should I do?
Total your income received from deposits made or from your settlement sheets. When your 1099’s do come, you can compare the total with what appears on your 1099’s. If they are different, try to find out why. Do not forget to include fuel surcharge in income.
How do I get my
expenses ready to do my taxes?
Separate all your business expenses by category such as fuel, parts, repairs, tires, insurance, telephone, tools, supplies and loading and unloading expenses. Your expenses should come from your settlements, checks written, cash payments, credit card charges and bank statement payment records. Since we normally use nights away from home to compute meal expense, you don’t need to save the meal receipts. Your logbook will suffice.
I bought a new truck
a few months ago. What do you need for my taxes?
Good question. You will need the contracts for the purchase and/or sale of the equipment. Keep in mind you would also need the following:
· Escrow statements for the purchase, sale or refinance of property.
· Confirmations from charities for donations in excess of $250.
· Number of total and business miles put on your back-up vehicle.
·
Indicate the amount and date of any estimated
taxes paid.
·
What other deductions should I look for?
You should be aware of the following items; mortgage interest, property taxes, interest and dividend income, income from sales of stock and rental property information. Remember, if you sold stock, you will need to know when it was originally purchased, how much you paid for it, and the date and amount of sale. If you sold a property, you will need to know date acquired, its cost, and the cost of any improvements over the years.
Remember; get your information to your tax preparer early to
leave enough time to alleviate any problems.
What are some of the
most common forgotten deductions?
We always address this by telling our clients that all expenses in connection with creating your income and operating your truck are usually deductible.
However, here is the list:
I plan to get a new
truck, what’s best, to lease or to purchase?
To make a decision whether to lease or purchase equipment, you need to look at your current tax situation. If you are going to put the equipment in service late in the year, you could get a much larger write off (i.e. Tax savings) with a purchase. If you put the new equipment into service toward the beginning of the year and you don’t need the large initial year depreciation write off, then you must compare the ultimate cost of the lease versus the purchase to see which makes the most dollar sense. You also have to take into account how often you change your equipment.
Remember, whether you lease or purchase you will, ultimately, get the same write off.
This article has been presented by PBS Tax & Bookkeeping Service, a company which has been providing income tax and bookkeeping services to the trucking industry for over a quarter century. Contributions to this article were made by Shasta May, Director Business Development for PBS. If you would like further information, please contact us at 800-697-5153.
For 2008
Per Diem Remains at
$52 Per Day but is now
80 Percent deductible
“Everyone’s financial
situation is different. This article does not give and is not intended to give
specific accounting and/or tax advice. Please consult with our own tax or
accounting professional.”