Taxes

Sounds like some people are talking about percentages of revenue and others are talking about percentages of net-profit. Since everyone's expenses will vary according to what they bought that year, the only way to provide a comparison is talk about the percentage of net.

Not saying folks that shared what percentage of revenue is wrong for their tax calculation. However, it just doesn't work very well for one business to compare to another business on percentage of revenue unless they are exactly the same all the way down the expenses - number of employees, amount of equipment purchases, repairs, etc.

 

How does an o/o show income base to purchase a $250,000 home if you break even every year? I'm asking because the income you show as net will be taxable right?

 

Yes, and that is a common problem, especially if you are getting started. You have a lot of depreciation in your first years, lots of start up expenses, and usually not the highest income right off the bat.

You CAN reduce the depreciation you take on your equipment to show more income, but that increases your taxes. So what this strategy comes down to is you pay more taxes to show the lender, so you can borrow more money.

Or, you can keep the money you would have spent on taxes in your pocket, save up for a few years, and put a bunch of money down on the house, instead. Not every trucker has the discipline (AND a wife with that discipline) to not spend that stash of money instead of saving it for the down payment........

 

My business and personal finances are seperate and no access available to spouse. I will keep in mind about the different options for filing return. I only need to show a $50-70,000 income which should be about $7-14,000 in taxes a year. Est @ $1,000/month.