How much per mile to make a l/p work?

I am lost here in a purchase you write off the purchasevprice plus interest just on your own schedule with a lease you can only write off the payments as you pay them ie i purchase a truck in december but wrote off 80% of the purchase price in the first year ....much more flexible than a lease imo

 

On a purchase you need to depreciate the truck on a 3 year depreciation schedule, even if you paid in full for the truck when you got it. Figuring depreciation is a tax nightmare (http://www.irs.gov/publications/p946/ch04.html) and best done by a tax accountant. You need to determine the placed in service date and from that determine what conversion and what method you need and want to apply.

If you wrote off 80% of your truck in the first year when purchasing it in December you best hope you do not get audited as you can only start depreciation from the date you place the asset in service (http://www.irs.gov/publications/p946/ch01.html#en_US_2013_publink1000107327). Even using the 200% declining balance method you would not get close to 80% back when you’re placed in service date is in December. You should use the mid-quarter conversion that would give you 1½ months of depreciation that year.

One of the biggest advantages to a lease is being able to right off the expenses as you incur them in my opinion. Most truck leases are quite a bit one sided so I am not really aviating most of them but the one advantage that they have is being able to right off the expenses as you incur them. For someone new to business it is far simpler the depreciating an asset over years.

 

Thre was a 172 depreciation available this year you can take an extra depreciation in the first year and spread out the rest over 3 years but you used lots of big words so you know more than turbotax

 

Hard to discuss taxes without using the terms the IRS has. They are the IRS's words not mine so if they are too big for you take it up with the IRS.

I assume you mean a 179 depreciation as I found nothing called a 172 depreciation. I had not seen that one before (looks like they started offering it in 2012) and it looks interesting and a really good deal for a small business compared to what they have offered before. One of the biggest hassles with depreciation is the IRS likes to change the rules for it every year so it is a headache to keep up with. I have retail properties so I have had to depreciate items more times then I like to count over the years and it is maddening to keep up with at times.

 

.84 don't do it, .96, now bad but not great ether, Is there a fuel surcharge as well, or is that included in the .96?

 

U r right it is 179 but it was enacted by bush and expires at the end of 2013 ....was hoping they would extend it

 

How much per mile?
Take your weekly payment for the truck including all the insurances prepass OCC/ACC they deduct, lets say it's $700 bucks even for easier math.

Your fuel will cost between $0.50 - $0.70 per mile.

You miles will fluctuate week to week but the formula is just a math equation, put in your numbers ever week to determine if you're falling behind or breaking even.

So let's say 2500 miles, formula is $700 divided by 2500 miles equals $0.28 cents per mile is dedicated to the truck payment for that many miles. $.0.28 plus $0.60 equals $0.88 cents per mile.

Whenever your miles dip down or you go home for the week or you run heavy uphill that $0.88 can push closer to $1 or more. If your carrier pays you $1.40 all in you're barely kissing $0.50 per mile but you are going to be responsible for all the maintenance, fuel, taxes etc. There are plenty of carriers paying $0.48 and above to company drivers who don't have to worry about those things.

 

How much per mile. Well if i run 2500 mi a week my lease runs about .38 mi if i run less my less per mile is more . I fig up the fix cost x how many miles i run a week plus my fuel runs about .57 mi or 42% which is good . Fuel surcharge is .45 this week. I guess best you fig out what your fixed cost on the lease is and go from there. Ever lease is different . I been with my company 2 yrs . 1St yr i made . 41Mi 2nd yr i made .39. Now you gotta fig .02 for taxes every qtr . The old sayv your a company driver make payments holds true . But you get the trk in the end with a lease in 4 yrs. Or you have a company job . Up yo you how you approach it v

 

I'm glad u caught that also..because them figures that was posted earlier...was way off..GOOD JOB!

 

With Swift I think they are offering $0.90 (might now be $0.96) + FSC... so depending on FSC the total is about what... $1.35 to $1.42 per mile, in that range? I think most of these rates advertised sub dollar are with FSC added. IMHO I'd rather not be getting into any L/P running freight for less than $1.90 per mile and preferably more.

I understand Schneider offers L/P with an option to run on percentage of freight. Any Schneider O/O's that can confirm? If so what kind of rates are you getting?