Owner Operator Total Costs Budget

Back to the drawing board. What I quoted was for 06. For 07 the figures are (on 75,830 miles, 36% deadhead)

Wages .40
Charity .05
Taxes .04
P&W&L .04 Parking, weighing and loading. $2500 of this was to get a
load picked up for me from a good customer
Medical .07
Shop .08 The corporation pays me $480/month for the rent of my
shop plus equipment and supplies for the shop.
Administration .10 Had to buy a new computer and fax machine. Also
includes internet service, bank charges, phone bills
workmans comp,etc.
Insurance .11 Includes truck, mental and dedical insurance
Vehicle use .02 Use of my vehicle #.485/mile to pick up parts, go to
bank on business etc.
Vehicle taxes .05 Licencing, IFTA, mileage charges
Tolls .01
Repairs .04
Parts .09 Had to have $3380 engine work done, $160/month APU payment.
Tires .01
Oil .02
Fuel .49
Return on investment .24 All equipment is paid for but I take $1500 a
month into a savings account in lieu of
payments.

Total $1.86


Revenue per loaded miles $2.98
Revenue on all miles $1.91

I'm incorporated so your cost calculations may vary from mine.

 

that's a good breakdown Native Dancer. It highlights a few things I'v been doing wrong.

Does it work out better for the corp to rent the shop from you than it does to have the corp own the shop and buy the equipment? I assume you are doing it this way because you already owned these items but what do you do when you buy new shop equipment claim it on your personal taxes as a cost to maintain the shop lease? If you didn't have the shop would it make more sense to have the corp own it all?

 

I don't really believe it is worthwhile to have a corporation anymore. At one time there were tax and legal liability advantages to it but those days are long gone. A corporation also requires a lot of paperwork. I've been incorporated for 51 years and if I dissolved the corporation it would have to pay taxes on fair market value on everything that has been depreciated. By owning the shop and leasing it to the coporation it makes one less thing for the coporation to have to pay taxes on at the time of dissolvement. Shop eguipment is owned by the corporation. The shop is 40'x60' with 14' eaves. I built it in 1992 for $28,000 and lived in a 14'x14' room in it for 2 years while I was building my house. At the time I built it it could be written off over 7 years. Later that year the tax law was changed on capital improvements to 32 years retroactively. I would have never spent that kind of money on it with a 32 year write off. I get to claim land taxes and power bills plus a little on depreciation. Getting rent payments helped me when I was limited on my income by Social Security. I'll probably only be doing this for a few more years (I'm 68 ) and now only do things that interest me hence my low miles per year. 52 years at this is almost enough.
I'm hesitant to tell you which way would be best for you as I'm not a tax accountant. Get yourself a good tax accountant and he can advise you what is best for you. A good accountant familiar with trucking can save you thousands.

 

I think you might be a little misguided on the taxes and wages on them. You're going to have to report everything that you make. If you're leased on to someone, your settlements are going to include every dime they pay you.

If you make $120k a year, and only "pay yourself" $20k out of that, you still are responsible for reporting that $120k as income for the year.

On your fixed expenses, I noticed you're missing your quarterly federal tax payments, and your yearly 2290 payment of $550. Also, does your state require ad valorem or other yearly property tax on your vehicle?

Also, there's not a slot for your cell phone or XM/Sirius subscription. While the satellite radio is a luxury expense, the cell is a necessity.

You have a maintenance/repair fund, which is good. But you should have at least $10k put away for repairs. General PMs, oil changes, and other "routine" maintenance will eat up $5000 very fast. That will hardly leave you any money for that blown fuel injector ($3000 repair), clutch ($1500-2000), or most anything. At an average labor rate of anywhere from $75-$120/hr, most minor repairs start out at $500. You'll probably replace tires every 2-2.5 years, too.

 

Not familiar with the whole S Corp thing. Sounds interesting, but wouldn't you have to pay some kind of corporate taxes? Uncle Sam has to get his share somehow, right?

By cell phone, I meant the cell phone bill. Mine averages about $65/mo. You may not need a phone, but the service is still billed. Just like my XM is about $50 per quarter for the radio and NavTraffic. I also have miscellaneous expenses on my spread sheet, but I list every one of my bills with a line item to ensure accuracy. This ensures that I have all my bases covered, and the miscellaneous figure covers those odds and ends that may come up.

I still would recommend a $10k maintenance fund. I had the warranty that covered the injectors, as well. Had to pay extra for it, but it came in handy this past year. Still had a $200 deductible, though. Ensure you paid for the premium warranty-not all of them cover the injectors or turbo. I was caught by a blown clutch in the first couple months of owning my truck. $1700 bucks, just like that. Good times.

 

I was doing some research on the S Corp last night. Pretty confusing for the Average Joe. It was saying something about having to split up the corporate profits amongst the shareholders, which would then be liable for their portion of the corporate profit, as well as their salary. I'm sure and accountant would figure it all out.

You're definitely right about the deductibles. I only have mine set at $1000, so I wouldn't be hurt too badly.

 

I am new truck driver and working for somebdy and they ask to opena company so they can pay me. what is this company, I live in Ontario. Any idea? LOL