Independent Contractor tax questions

When you're paid on a 1099 you get one lump sum and you pay your expenses out of that payment. So that's correct that you claim the expenses on your tax return. But I don't give tax or tax return advice. I defer to tax professionals for that.

 

Your gonna eat the tax's on the tolls and fuel that the company should be paying on... They should be claiming fuel and tolls if its on there vehicles...

 

First off I would get a good tax guy who can guide you through getting the least amount of tax liability you can get.

Second this seems to be normal. I mean that you should be keeping receipts for your costs and keep track of every assignment.

HOWEVER as I have had to deal with this problem before if the company is paying for the fuel and tolls after delivery and turning the receipts in but not built into the rate, then you have no choice and can't really claim it as an expense because it isn't.

 

since you are paid on a 1099, you will file a schedule C for taxes. On the schedule C go to Part V, thats on the the 2nd page Other Expenses. Just type fuel on the first line then enter the amount. Enter Tolls on the next line and enter that amount.

 

This is the correct way to report your expenses and deductions for a 1099 driver and O/O....Regarding your fuel expenses,see line 9...
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[h=3]IS YOUR SCHEDULE C WITH YOUR TAX RETURN CORRECT[/h] by RUSSELL E. FULLINGIM, CTP on March 6th, 2007
This has been a very frustrating tax season. So far this year I have amended 20 truckers back year taxes. Sure I make money amending taxes. But when your taxes are done incorrectly, you over pay your taxes.

When you take your stuff to a tax preparer make sure it is as complete as possible. Then when you get them back go over the Schedule C carefully.

The first thing I find wrong is line 24b, standard meal allowance. On the current tax return I am doing, the calculations are not shown. That figure should be $52 a day times 75%. It is very important that you keep tract of the number of days you are away from home. I recommend that you use a calendar book and write down your location every morning. Also put down your expenses that you do not get a receipt for. Like doing laundry, washing truck at “25 cent” car washes. Or in the case of Fontana, the $10 truck wash.

Way to many tax preparers figure line 24b incorrectly or just leave it out.

Line 15, it amazes me at the number of times I find that line blank. It is insurance, no business can operate without insurance.

Before I go any further, There are 30 lines on the front of the Schedule C. When I look at a Schedule C and find most expenses on page 2, OTHER EXPENSES, I know that the preparer does not understand the form and in most cases doesn’t understand truck expenses.

Line 9, the instruction manual says: “include in line 9 the business portion of expenses for fuel....” “Show depreciation on line 13 and rent or lease payments on line 20a”

Now line 13, depreciation seems to be so misunderstood. Over the road tractors are not a truck!
Over the road tractors depreciate in three (3) years, trucks in five (5) and trailers in(5) years

TIRES DO NOT DEPRECIATE THEY EXPENSE. I am doing one now that they twice over the last few years depreciated tires two times and for 7 years???

Line 23. Taxes and Licenses. The definition of taxes is: “any moneys paid to a government agency”. Are tolls paid to a government agency? Fuel milage tax, Federal highway use tax?
One thing to watch for is the $550 FHUT, it is missed so many times. In my system I have a special entry for that.

Line 24a Travel. That is motels and I put there showers. Do you know truckers are the only people I know of that can deduct for showers?

Line 18 Office expense. That is a broad one. Computers used in the truck or office-in-home are expenses up to $10,000, money charges, ATM, the money the company charges you to use credit card or advance you money. Paper, pens, log books, anything you would use in a regular office.

17, legal & professional services. Your tax preparer, accountant, lawyer, trouble is you can’t deduct for fines even though they are legal fees and in most cases paid to a government agency.

Line 21 Repairs and maintenance, Repairs are obvious, maintenance, how about paper towel, pledge, broom, and a ton of things to make your truck cleaner and smell good. Lub and oil, tires and tire repair?

Line 20b rent or lease other property, How about parking your tractor? Some truckers have to pay to park their tractor when home. How about a storage unit to store oil ,tires and other stuff for the business.

Line 16b interest, If you are paying a payment you will have interest. You also may have interest on a credit care used only for the business, or a small loan

Line 30 Business use of your home. OFFICE IN THE HOME. So many tax preparers are paranoid about this very acceptable deduction.

How about your personal vehicle miles for business? Do you use your auto to go to the bank, parts store, company office, or take things to where you park the tractor? Keep tract of the miles and deduct them. I automatic give customers 1200 miles a year. That is about a $500 deduction.

For every $100 you fail to deduct costs you about $25 in taxes. YES, more than 80% of truckers over pay their income taxes. And the IRS doesn’t even thank you.

I listed the line numbers in the order of number of mistakes I find. I use a saying to help get an idea of what to deduct and what is missing.

YOU CAN DEDUCT ANYTHING YOU USE ON, IN, OR AROUND THE TRACTO