Deducting The Percentage The Company Keeps?

Discussion in 'Trucker Taxes and Truck Financing' started by theSoz, Jul 10, 2021.

  1. theSoz

    theSoz Light Load Member

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    For those O/O that are leased on to another company, say LandStar for 65%, can you deduct the other 35% (LandStars cut) as a business expense?

    Honestly, I’ve never heard of this but was recently told by a “tax strategist” that the IRS can consider this aa fee required to do business (essentially a fee to lease on) with that company and therefore it is tax deductible.

    Anyone?
     
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  3. Ridgeline

    Ridgeline Road Train Member

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    You can’t deduct the difference of what you make and what the customer is charges because it isn’t your legal customer, it is landstars or any carrier that you are contracted/leased to.

    the irs doesn’t consider this as a fee and the irs has actually ruled on this back in the 90’s, get an EA or a good tax lawyer to explain how lease and contracts work when it comes to taxes.
     
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  4. theSoz

    theSoz Light Load Member

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    As I mentioned above, I had never heard of such thing and this “tax strategist” (again in quotes”) was the one who suggested this theory to me. I simply put it out there to see if anyone had heard of such a thing. If you have the 90”s ruling, I’d very much like to read that.

    Thanks for commenting.
     
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  5. Ridgeline

    Ridgeline Road Train Member

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    I don’t have a link, I have a copy of the ruling in my records from my accountant. any EA or tax lawyer can show it to you.

    sounds like you have a minimally educated person trying to tell people how to save money.
     
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  6. theSoz

    theSoz Light Load Member

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    I’m skeptical of anyone who calls themselves a “tax strategist” in the first place. Thankfully, I didn’t seek this person out but rather was put into a conversation a friend was having with this guy and was asked for my opinion. I don’t think this strategist knew anything about the trucking industry at all other than what he probably googled. He sounded like he was just searching for a new set a customers and was just throwing out ideas. These are the guys that get you audited and then disappear.
     
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  7. buckmanmike

    buckmanmike Light Load Member

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    Seems to me that if the load paid $1 and Landstar took 35% your income would be $.65. So that 35% fee is deducted, effectively.
     
  8. 77fib77

    77fib77 Road Train Member

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    So if you pay fuel taxes. You can deduct that against your federal. Since some fuel tax goes to feds. A women me that once.
     
  9. wis bang

    wis bang Road Train Member

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    100% of the OP income IS the 65% of the load they were paid.

    I'm sure the IRS would love to tax you on 135% of your income as many motor carriers would pay less on their 35% of the gross.

    Oh yeah don't forget my 10%, thank you very much. Never knew I was a tax strategist...
     
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  10. p608

    p608 Road Train Member

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    In order to deduct it you would have to claim it as income.
     
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  11. mtoo

    mtoo Road Train Member

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    The OP has the good sense to question the advice he was given. Never blindly follow someones advice, do your own Due Diligence
     
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