LANDLINE MAGAZINE

              DECEMBER 2008/JANUARY 2009 ISSUE

               

                  IT’S INCOME TAX TIME  

 

 

Question: What do I need for my Income Taxes and what do you need to prepare them?

Answer: Great question. You should start gathering your information as early as possible to give you time to tackle problem areas or missing information. You won’t be receiving your W-2’s and 1099’s for awhile, but you need to categorize all your income and expenses to make sure nothing is missing.  You should pay special attention to the following:

 

1.      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 1099s.  If they are different, try to find out why. It could have to do with the fuel surcharge.

2.      Separate all your business expenses by category such as fuel, parts, repairs, tires, insurance, telephone, tolls, supplies and loading & unloading expenses.  Your expenses should come from checks written, ATM bank statements, cash spent, credit/debit card statements and deductions from settlements.  Since we normally use nights away to compute your meal expense (per diem), you don’t need to save meal receipts.  Your logbook will suffice. 

3.      Have all contracts on purchases and/or leases for equipment acquired during the year including loan information if financing was used.  You will need dates for any equipment sold along with the sales price and loan balance unless the equipment was traded in on a new purchase.

4.      Compute the nights your away from home on the job.

5.      Compile your personal information if it applies such as mortgage interest, property taxes, interest and dividend income, income from sales from 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, cost and cost of any improvements over the years.

6.      Company drivers need to gather their W-2’s and compute the number of nights they were gone on the road.  Also, you need to compile any business expenses incurred such as union dues, telephone, clothing and laundry. You will need to deduct any reimbursement received.

7.      Determine if you have or are going to make any contributions to an IRA, SEP, Simple IRA, Keogh and/or 401K plans. Typically, this can be determined at the time of your income tax preparation (see tax savings question below).

8.      Indicate any estimated taxes paid with corresponding dates paid.

 

 

Here are a few other things you will need to get together:

1. Escrow statements for the purchase, sale or refinance of property
2. Confirmations from charities for donations in excess of $250
3. Number of business miles on personal vehicle

 

Remember, if you have employees or independent contractors, you are also required to send out your W-2’s and 1099’s by January 31 as well.  This includes self-employed individuals who have hired their children to do work for their business.  You must issue W-2’s to your children to get the deduction.

 

Question: What is the daily per diem rate for Truckers?

Answer: The per diem daily rate of $52 was not changed October 1, 2008.  As of this printing, use $52 for the entire year. Per diem is 80% deductible.

 

Question: Is it too late to plan for tax savings?

Answer: There is still time to plan for your 2008 taxes.  If need be, you can accelerate your expenses, put new equipment into service before January 1, 2009, and open a Keogh Self-Employed Retirement Plan.  You can also take advantage of the “solo” 401K.  It allows 100% of the first $15,500 ($20,000 if you are 50 or older) of income to be sheltered for 2008 and 25% of all self-employment income up to a combined $45,000.  If you are 50 or older, it is $50,000.  The Solo 401K as well as the Keogh plan must be opened prior to January 1, 2009, but can be funded by the due date of your income tax return including extensions.

 

The Solo 401K and the defined benefit, defined-contribution or a combination thereof Keogh Plans allows you to put away the largest contribution toward your retirement. If you can contribute the maximum allowable or close to it you would be one of the lucky few. But they can also be used as well as all other retirement plans can also be used for making small contributions to your retirement plan.

 

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. If you would like further information, please contact us at 800-697-5153.  Visit our Web Site at www.pbstax.com .

 

“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 your own tax or accounting professional.”