First time O/O. Tax questions

Don, they work for some, not for others.

I have had the same accountant until he retired and then I went with his "assistant" who screwed me, then I got the girl who took over the entire firm and she's been great. It all depends. These are not trucking accountants by any means but corporate accountants who know how to handle things like setting up a company right, how to make decisions and so on. A lot of things that many of these companies don't show you or a skill they expect you to have.

 

Taxes?
Just say no.

 

I tried that 2 weeks ago, it resulted in 40 minutes wasted. They no longer give tax answers "not trained in that area". They are now only meant to be able to respond to those special letters that gets sent out with your name on it. They couldn't even tell me who to ask about my tax question. (yes, I talked to 2 accountants but didn't feel comfortable with the answer, kinda wanted from the horses ?mouth? want to say the other end)

If they are anything like the Indiana Department of Revenue, when you call about that special letter you got, they have no answers... What do you mean you think I owe money, ...how much? "I don't know we can't answer that" Rechecked everything... oh dang, my bad, I do owe you a dollar. Money order sent, along with 2012 tax records (paid more that a buck for stamp, envelope, and money order!). A while later in IRP/IFTA (DOR) oh we can't give you plates you owe back taxes. WHAT! Says you owe $7xx.xx grrrr.... fine here take my money. NO, we need you to file the taxes for 2012. Ummmm, I did over a month ago, "fine" come back next day taxes in hand, pay the extortion fee of $7xx.xx and all is well. A few weeks later I get a check in the mail for $7xx.xx dollars.

Sorry got off on a tangent there but, yeah good luck calling them

 

LOL, ya its the worst call to make, but, you gotta keep on it till you get your competent knowledgable person, right?
If you get bad info, only you pays, not an accountant or tax specialists..normally

I guess a tax lawyer with experience with this field?

Geez, now im agitated...like were picking how much rape we want or something...How much of our hard earned money can we set on fire!!!

 

I used to use ATBS when I first started as a lease op, but coming from a financial background before trucking, they weren't deducting everything correctly, so for the past few years, I've just done it myself and that way I don't have to worry about it. They aren't exactly cheap. You'd do better either doing it yourself or getting a good accountant like someone else mentioned.

 

I agree, don't use ATBS. Things might have changed, but in the past they did very sloppy work.

Keep your own books and numbers, learn all you can. I am not saying don't use an accountant. But when you do use one, double check their work and numbers.

Accountants are like mechanics, there's good ones and bad ones. Double check their work.

 

Help!! Greenhorn! Newbie!!haha! My guy just started IC and is buying truck ... 6 mo. He was company driver and paid taxes etc. Generally speaking will he have to pay taxes this first yr. ? ( with all the write offs etc) ??

 

That all is gonna depend on how many write offs he can actually come up with to deduct. Many drivers end up owing because they don't realize the things that they can deduct. (Things like clothing, work boots, fuel, meals, cleaning supplies, air freshener, laptops/IPads, cell phone, etc...) Also depends on the amount of miles he runs, etc...everyone is gonna be different. My first year, I had a lot of repairs and ended up not having to pay anything because I was operating the business at a loss after deducting everything.

 

Here is some information you can play with. A highway tractor is what they call 3 year property. One of the most common methods of depreciation is what is called 200 declining balance half year method. year 1 you write off 33.33% of what you paid for the truck.
year 2, 44.45%
year 3, 14.81%
year 4, 7.41%

A trailer is 5 year property, under the same method
year 1, 20% year 2, 32% year 3, 19.2% year 4, 11.52% year 5, 11.52% year 6, 5.76%

There are several ways to do depreciation, including section 179, where you take a big chunk of the price and write it off the first year, then depreciate the rest.

You can play with numbers and probably not pay taxes that first year. But remember, what you write off in the first year, you loose later.

It is dangerous to go into year 4-5 with big truck/trailer payments and no depreciation to write off