honest answer take home pay

Just because someone is in business for themselves, does not automatically mean that they know everything there is to know about what can and cannot be written off.

 

Yep and then there is rental property which i live in but rent a couple apts out to family i lose my arse in that deal but get to right off the fence roof waterbill etc.....this year i should be right about 80k if i dont have all my inframe money by dec 31st if i,m there well it,ll be 60...,,got a little behind by a sleeping 4wheeler that took out my truck and me for a month

 

It would be best to get with a good CPA or tax attorney and do some financial planning. Tax laws change from time to time, it would be good to seek advice from those who deal with these rules and regulations on a daily basis.

 

I know this is an old post but like G/Man said, any amount of $$ you invest, and yes I see it as an investment, in a GOOD accountant will save you way more than
a) QuickBooks or any other program you do yourself
b) overpaid taxes by you or a bad acct doing your books


It is never how much "you" make but rather how much you keep, someone who makes $100,000 and pays %50 in taxes is worse of than a guy making $60,000 and keeping almost all of it due to write off's

Try and find an accountant that either really knows trucking or better yet find an acct that has worked for the IRS, they should know what you can and cannot do.
I had an accountant years ago that did worse than I could have done myself, after getting a second opinion I quickly realized they were doing the very minimum, our acct now has somewhere around 40 years exp. and has prior auditing experience, we do not just use this company in April, we are in contact almost every month, if not every other month and get advice all the time on purchases and write off options as we go through the year, certain times of the year we get better write offs than others
Ours is not cheap, costs me maybe a couple grand a year BUT! if he can get you a $10k write off someone else may miss then you are ahead already

 

If a tax preparer is not familiar with the trucking business they could miss some deductions that are more unique to this industry, such as the per diem deduction. That one deduction alone could mean thousands of dollars in tax savings. It is important that you keep good records and all receipts when driving. Log books can be used to prove you were on the road and I use a debit or credit card for ALL purchases made while traveling as additional proof. That way I don't necessarily have to keep each receipt since I have the monthly bill or bank statement. The software that I use can scan all receipts and that makes it much easier to maintain records. I can print a report on each cost, such as maintenance, permits, etc., and give it to a CPA or tax preparer and that makes their job much easier and less expensive for me. Whether you use a spreadsheet, such s Excel, a standard accounting software program, such as Quick Books Pro, or a trucking specific software program such as Trucknpro, you need to keep accurate records. And the better your records the less it will cost you when your tax preparer does your taxes. I know some truckers who use a third party to do their IFTA, quarterly tax filings as well as the end of year 1040 or whatever tax return that they file. Most software programs will cost less than $200. It is money well spent. By keeping records up to date, you can see where you are at any time and make plans for spending or to shelter revenue from additional taxation. I have a friend who is planning on buying a newer trailer before the end of the year because it will save him taxes. Without good records and a good accountant, he might be paying more taxes this year.

 

Lots of O/O like to brag about how much they make, but what they usually quote is there gross to the truck on their best week. They will claim to make $5000/week every week.

I'm not ashamed to tell you straight up. You can rough estimate at 25% of gross for your net, then comes taxes at we can guess to be pretty close to 10% of that net number which gives your "take home pay". Figure an average owner op making $150K to $200K a year (I know, it's kinda low; but, we take more time off for things like truck repair, and just being lazy). So, $200K X .25 = $50K - 10% = $45K for a straight true rough average for an above average O/O with no free benefits, or retirement contribution. Oh yeah, and if you want to do double duty as a part-time truck mechanic by working on your own equipment, you can make just a little more but will most likely have that eaten away by the extra taxes you'll pay and yearend (fewer deductions and more income).

So there you have it, the TRUTH. And if an O/O tells you he takes home $5000/week. Don't tell him he's a liar; tell him he is a DAM LIAR!

 

That is about what I have always figured for when I decide to get a truck. I was going to pay myself a salary of 1000-1200 a week gross and after the year is done if I have a little left over I can write myself a bonus check for Christmas.

I don't see why some O/O's try to tell people they make 5K a week, that means they would have to gross to the truck around 20K, in a week...... If anybody was to believe that then they are just dumb. Even if you did gross 20K in a week, it would be a massive RGN setup and most of the money you gross went towards permits, pilots, and most likely much higher insurance rates. People are gullible so as long as those people don't wise up, there is always that owner op out there willing to tell fairy tails knowing somebody will believe them.

 

I've enjoyed reading all your posts, it's been informative. I'm really interested in the tax shelter info and wondering why my accountant hasn't mentioned them. Does anyone know what the transportation worker per diem is this year? And is it still 80% of per diem for full days and 75% for partial (day you leave, day you get home) divided by 10%?

 

Go to irs.gov.
Read Pub. 463, Form 2106EZ instructions, and find rates of per diem by national avg as well as for specific locals which may allow for much higher rates at irs.gov/per diem

 

Also, when I rent motel rooms, I'll look up the per diem rate for that location and use the motel deduction rated for that local. It's usually higher than the actual motel rate on my receipts. Yes, it's legal, per Pub. 463. My logbook is proof that I was away from home. So keep those logs.