owner operator paid $7000 last year. Is this too much?

Anybody that tells you they can save you money over what was paid without looking at the return and the information is not someone to be talking to.

 

You save money by making sure you have every single expense counted for in detail. From A to Z.

If you purchased the trucks you really can't deduct and write them off , except for the interest you paid. They normally don't allow that. Same like as if you were purchasing your home. You're only allowed to deduct the interest you paid on your home. You can deduct Leased trucks and trailers.

It is better to remain as a sole proprietor., or partnership.

We made the mistake of becoming a Corporation and our taxes were much more higher.
"Incorporating " is really only to protect you.
Lets say you got into a major accident. And you were sued. This would protect you from someone taking your assets.

You Grossed $165, for the year. How many trucks and trailers do you have.? And with this equipment, what was your net?
Was your Repair and Maintenance expense pretty high? Or low?

You need to find someone who knows about "Trucking" to do your taxes. This CPA was probably just a general CPA that missed out on a lot of deductions and expenses you have for your trucking business.

 

No you did not!!!! You pay taxes according to your NET not gross....After all your deductions,fuel,tolls,blah ,blah,blah...
For me the 1st 5 years of my business i could actually claim a loss in which i did...YES,you can do that

So my method to my madness was this.WHAT EVER THE GROSS IS,YOU HAVE TO WORK very hard at finding all the (right-offs) you can.Get them babies down to as close to ZERO as possible..In doing so you only pay on the NET..NOT GROSS...

I right off everything down to the 12x12 computer room and the heat and electric bill..Yes,there is a formula for that too..

Last time i made 150,000 for the year,i payed my taxes on around 15,000 NET...The first 5 years was a steady up climb from starting at -5,000 net for the 1st year..and all the way up to the 5th year..

ITS ALL ABOUT ''BOOK KEEPING'' AND KEEPING EVERY RECEIPT YOU CAN AND HAVING WIFE KEEP ALL HER RECEIPTS TOO...YES,YOU CAN USE SOME OF THEM TOO..LOL

I love my C.P.A. HE IS HALF JEWISH AND HALF ITALIAN IN NY..LOL,LOL

 

There is no way he could have paid only $7,000 tax on
165 thousand "Gross". , if they did no deductions.
His tax would have been higher than that.

Cause he would have paid, about $24,750 alone just for social security tax. Some where around there. without figuring exemptions and all that. Estimate of 15%

That sounds about right, BUT that's why I asked how many trucks and trailers are being used. To determine if it can go lower or not.

Did you carry your loss over, 1pissedoffdriver? You're only allowed the five years straight. After 5 years, if you don't show a profit, they expect you to be out of business.
I hope you did a portion of your electric and heating bill.

I never did a portion of the house and utility bills. That's an easy way to get audited. The trucks alone had enough deductions to keep the net down.
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Jewish and Italian??? His name must have been Schwarki. ? The jewish sch and the italian - i at the end.

 

well its working for me after 20 years and not 1 audit..knock on wood..and yes 1st five years were minimal profit..very minimal..after that yes,you have to show gain

 

In the event of a bad accident, as addressed by many before, a corporation does nothing to protect assets. An Attorney is going to name, the driver, the owner of the truck(ie stockholder), the insurance company. As you see, they will get to you. An umbrella policy is a thought here.

I will not even begin to try and figure what the taxable situation is to generate a tax of 7,000, not knowing what portion is self employment tax and whatever.

If you buy a truck, you have always been able to deduct them. Depreciation expense and section 179 deductions.

 

Yes you can depreciate the truck, but that isn't much. Any equipment depreciates. The full value goes down. Even your computers.

You can't deduct the FULL AMOUNT of the truck that you paid for... like your truck payments., except when you're Leasing. And many Larger companies go that way too., by Leasing.

Do You Know how many Big Corporations in this country go by and under different names? Tell me Roadmedic, why do they do that???

The tax amount for self employment is 15% minus your exemptions ( not deductions) from the Gross Income.
Because 1pissedoff driver was talking about Gross Income, not NET.

So if we're talking about GROSS , than Glhx2 would have paid more than 7,000 dollars just in Social Security tax alone, on the Gross, and like I said, minus the exemptions.

When you're an employee, your company pays roughly half of that 15%. It's not hard, figure it out.
Comprende ?

 

After the truck is depreciated and yes it can be fully depreciated, you have the remaining value of the truck which in most cases is not much anyway.

In a sense you are deducting the full amount of the payment for the truck. You get a deduction for the interest and the remaining principal payment is considered to be the purchase of the truck which is offset by the depreciation deduction. Alot of the big corporations go the route of leasing for cash flow purposes. It is a specific monthly payment and they usually tie maintenance contracts for these transactions.

The many names that the companies have depends on the the company. Some of the names deal with the fact they have purchased the company and are still running them separate. Crete and Shaffer for example. Some of the companies tie names such as dedicated, intermodal and the like, but they are one company. It is usually done for tracking of the profit per division or company.

The actual Self employment tax is 15.3 and is adjusted for a deduction by the business and nets to about 92.35% of the 15.3 rate. There are advantages to being a company employee, such as matching the ss rate at the same rate of the employee, 7.65%. There is also workmen's compensation figures.

As far as the taxes and such go, I have been doing them professionally since 1982. Enrolled Agent with the IRS. In fact did 2 yesterday, and for the first time in years, mine was the first.

 

Good for you Roadmedic. !

Are you saying you're the only one that knows the tax laws?


You said,
(The actual Self employment tax is 15.3 and is adjusted for a deduction by the business and nets )

Come on Now, You're talking in Circles! We're not talking about Net here.

We're talking about the guy paying 7,000 on the GROSS. of 165,000
Figure it out. You've got Social Security TAX and Federal Tax . If that's the case he would be paying alot more than 7,000 on the Gross of 165,000.

NOW do you Get it ?? It doesn't take a Rocket Scientist to figure that one out.

You also said,
"In a sense " you are deducting the full amount of the payment for the truck. You get a deduction for the interest and the remaining principal payment is considered to be the purchase of the truck which is offset by the depreciation deduction.

Wow,,,, that's just what I've been saying! You're Paying the Interest!
Why are you trying to change my words?
I've been doing taxes since I came out of high school... but I don't go around bragging about it.