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TAX RELATED ISSUES

QUESTION: I am 68 years old, self employed and receiving my social security  checks.  I could not believe it when my tax preparer told me I had a large tax liability, most of which was self-employment tax i.e. social security tax.  I believe I do not have to pay into the social security system any longer since I am already receiving social security and have exceeded my retirement age.  Why do I have to pay into it?

ANSWER:  Unfortunately, you do have to pay into the system as long as you are working, with no exclusion for age regardless of whether you are receiving social security or not.  However, your social security checks should increase after you file your income taxes.

QUESTION:  I entered a weight loss program.  Can I deduct the cost of the program?

ANSWER:  Yes.  Weight loss programs are deductible as long as a physician diagnoses obesity.  In fact, there are dozens of deductible medical procedures or programs that can be considered a medical expense.

A few that are truck driving related are eye laser surgery, contact lenses and eyeglasses.  Additionally, drug addiction programs, alcoholism, smoking cessation programs, hearing aids, and acupuncture are all deductible as long as they are diagnosed and prescribed by a physician.

TAX SCAMS

SCAM ALERT

Fuel Tax Credit Scams

The IRS is receiving claims for the fuel tax credit that are unreasonable. Truckers who use fuel for off-highway business purposes may be eligible for the fuel tax credit. But some truckers are claiming the tax credit when they are not entitled to it. Fraud involving the fuel tax credit was recently added to the list of frivolous tax claims, potentially subjecting those who improperly claim the credit to a $5,000 penalty.

Phishing

Phishing is a tactic used by on-line thieves to trick victims into revealing personal information they can then use to access their accounts. These criminals can empty your bank accounts, run up credit card charges and apply for loans or credit in the victims’ names. Phishing scams often take the form of an e-mail that appears to come from a legitimate source. Some scam e-mails falsely claim to come from the IRS. The IRS never uses e-mail to contact taxpayers about their tax issues. Remember: the only official IRS Web site is located at www.irs.gov.

FREQUENTLY ASKED QUESTIONS

QUESTION: I have been deducting my dog, which stays in the truck, as security protection.  We have him to protect the truck.  Someone recently told me that the money we spend on the dog may not be a business expense. Is that true?

ANSWER:  Another very common question. A dog used as security on the truck can be used as a deduction ONLY if the dog has been certified as a guard dog. Proof of this certification is required.

QUESTION:  My daughter is getting married and most of the guests are related to my success in the trucking business.  I would like to deduct the cost of the wedding as a business expense. Can I do that?

ANSWER:  That’s a very common question, but unfortunately, the bottom line is lots of dollars spent, but NO deduction.

QUESTION: I profited handsomely in a questionable legal business activity, and I’m nervous about not reporting that income on my tax return. If I report it, I want to offset the income by deducting expenses. What should I do? 

ANSWER:  I am not sure what kind of expenses were incurred, but you cannot deduct any expenses in connection with any illegal activity. 

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.

“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.”