LAND LINE
FEBRUARY 2010
ARTICLE0210LL
TAX PREPARATION
FREQUENTLY ASKED QUESTIONS
Q. How much can I deduct for my nights away on the road (Per Diem)?
A. For 2009 you can deduct $52 per day for the first nine months.
Then from
Q. I am a company driver and have nights away from home. How much per
diem can I deduct?
A. The same rules apply for company drivers as above, but company drivers must subtract any reimbursements they received.
Q. What are the most
common forgotten deductions?
A. Many truckers forget the small stuff either because they are not aware of the deduction or because they don’t think the deduction is big enough to matter. Every little bit helps and you’d be surprised how vast the little things add up. Don’t forget to include the following:
Annual Credit Card Fees & Interest (Business only credit card)
Association Dues (OOIDA)
ComData/ComCheck Fees
Computer Software/Software Support
Cleaning Supplies; Windex, Paper Towels
Fax and Copy Charges
Internet Fees: Qualcomm, Satellite, XM Radio
Office Supplies: Pens, Pencils, Paperclips, Envelopes, Folders, Rubber Bands
Postage & Delivery Fees
Security Costs
Trucking/Business Related Subscriptions
Weather Gear
Q. How much of my income should I set aside
for taxes?
A. Keeping in mind that everyone’s tax situation is different, we recommend at least 20-30% of your net income. When you have finished your 2009 tax return use that as your guide for your first installment due April 15, 2010. You may adjust your estimated taxes due June 15 and September 15, 2010 and January 15 due 2011 based on updated income tax projections.
Q. What are 2009
Standard Mileage Rates?
A. Beginning January 1, 2009, the standard mileage rates for the use of a car (including vans, pickups, or panel trucks) will be:
-55 cents per mile for business miles driven;
-24 cents per mile driven for medical or moving purposes; and
-14 cents per mile driven in service of charitable organizations
Beginning
medical or moving and the 14 cents charitable remains the same.
Q. Can I deduct the
standard mileage rate for my car that I am depreciating?
A. No. A taxpayer may not use the business standard rate for a vehicle being depreciated under the MACRS Cost Recovery System or after claiming Sec. 179. Generally, you would be using the standard mileage rate for the use of a car or pick-up in your business which you have not set up to depreciate.
Q. How much first
year write off (depreciation section 179) can I take on the purchasing of new
equipment?
A. For equipment acquired in 2009 and put into service in that year you can choose to write off up to $250,000, no matter when it was put into service during the year. But once your acquisitions reach $800,000, the first year write off will start phasing out.
Q. What if I bought a
SUV for business use?
A. If the SUV weighs more than 6000 pounds and is used for business, $25,000 of its cost can be immediately deducted. If under 6000 pounds then it’s the same as for cars and light trucks.
Tax Tip- The Bonus Depreciation provision extends to the 2009 tax year. It allows 50 percent additional depreciation of the cost of the asset. This is new equipment put into service during the year. Also extended was the $8000 increase in the first year luxury passenger auto limitation for new vehicles.
Tax Tip – Sales Tax Deduction for New Vehicles
If you bought a new car, motor home, light truck or motorcycle purchased after February 16, 2009 and before January 1, 2010 you can deduct the sales tax even if you do not claim itemize deductions. You can add the tax paid to your standard deduction.
Q. Can I take a home office deduction?
A. To qualify for the home office deduction, the home office must be your principal place of business. You must use the home office regularly and exclusively for administration and management of your business. And, you may not have any other fixed location where you regularly conduct administration and management activities of the business.
Q. Can I deduct
deadhead miles?
A. No, you cannot. There is a big misconception concerning deadhead miles. There are many truckers who think that the income lost as a result of deadhead miles is a deductible item. That is not the case. Only the costs to operate the truck, i.e. fuel, insurance, repairs, and maintenance covering those deadhead miles are deductible.
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. See our website at www.pbstax.com.
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.
