LANDLINE

DEC 2009 / JAN 2010

 

IT’S INCOME TAX TIME

 

Question: I’m worried about my taxes. Is there still time for tax planning this late in the year? 

 

Answer: You bet. There is still time to do a tax projection to see what planning needs to be done.  You can accelerate some of your trucking expenses to reduce income.  If you are short of cash, you can credit card them and get the deduction in 2009.  Or, you might shift some of your trucking expenses to 2010 if your tax situation is favorable, which will have the potential of reducing income in 2010. If you buy a truck or other vehicle to help you in your business, in order to get the tax deduction in 2009 you must put them into service prior to January 1, 2010.

 

There is still time to contribute to a retirement plan. The largest contributions are available from the Solo 401K and Keogh plans. Those plans must be in force from prior years or you can open a new one by December 31, 2009.  You don't need to contribute until the due date of the 2009 income tax return including extensions. You have until April 15, 2010 for IRA contributions and for Sep IRA you have until the due date of the return including extensions.

 

Question: What information is needed to prepare my income taxes?

 

Answer: We get many requests from clients as to what is needed for us to prepare their income tax returns. Most tax preparers have an income tax organizer which lists everything that is needed for the preparation of an income tax return. 

 

1.      W-2’s

2.      1099’s from all your employers, i.e. people that you have hauled for, brokers, motor carriers and your independent business.

3.      1099’s or end of year statements from banks for interest and dividend income, brokers for stock information, mutual funds, 401k and IRA distributions, and mortgage interest statements,

4.      Schedule K1 if you are involved in any partnerships or s-corporations.

5.      W-2P or 1099R for pension and annuity income.

6.      1099’s and year end statements for unemployment compensation, social security income and state tax refund.

7.      Contracts for the purchase and sale of equipment.

8.      Escrow statements for the purchase and sale of property.

9.      Confirmations from charities for donations of $250 or more. Written receipt from charity or bank record for donations for under $250.

10.  Nights away from home.

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

12.  Indicate if you have or are going to make any contributions to an IRA, SEP, Simple IRA, Keogh and/or UNI 401K plans.

13.  Indicate any estimated taxes paid with corresponding dates.

 

Question: I am a company driver, does the above apply to me?

 

Answer: Most of it does. You too will have business expenses and nights away. You will need to deduct any reimbursements you received, if you are claiming business expenses.

 

TAX TIP

 

Some truckers will compile the information, total it and/or input it into the computer.  Others will make a schedule of all the expenses by category.  Still others will total each pile and attach their adding machine tape to the receipts.  There are those who will gather everything, throw it into a box (the shoebox method) and send it to their tax preparer for them to do the bookkeeping.  If you do use a tax preparer, remember that the more you do, the less cost you incur in the preparation of your return.  If you can summarize all your expenses by category and get it on paper; it will cost less than if your tax preparer has to do it.  Whether you summarize or just send it off to your tax preparer, get your tax returns done early.  By doing this, it gives you a chance to correct any errors and spot any omissions; it allows your tax preparer ample time to ask for any missing information or to discuss different possibilities for deductions that arise during the preparation of a tax return.

 

This article has been presented by PBS Tax & Bookkeeping Services, a company that 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.

 

Please remember 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.