Too many deductions can lower my return????

You want to take all the legal deduction you can take. The only thing that's kinda difference if you have your own company and paying taxes ever quarter. You only want to pay as much taxes as you owe. Then you would not get any return because you did not over pay. When I had my own truck I just paid at end of the year and took all deduction I could.

So if you paid for parking that all a tax deduction and anything else you got to run business. Motel rooms or all kinds of stuff are wire off. You can even have uniform/clothes you have just for driving truck with company name on them and that would be a write off.

 

Having too many deductions is a bad thing under two rules. 1 if you have children it will decrease your earned income credit. 2 it will decrease your earnings statement and may prevent you from getting a loan in the future. Now I assume that your cpa overlooked receipts because you have children that are being used as dependents and earned income credit. Earned income credit gets computed on just as it says "earned income". If you have less income earned you get less of a credit for each child. Now if you are filing business only and has no ties to your personal taxes can the cpa. If you have children and the taxes is corresponding with your personal tax obligation I would crawl back to the cpa and apologize. Very few cpa would alter what you turned in regardless of what is best for you.

 

I would add I like other said if you have lots of deduction can hurt you if you ever want a loan. Because general they look at how much money you report to IRS and pay taxes on. I had several year with taking truck depreciation I did not pay any taxes all legal. Because it looked like it did not make money. That ok but you ever go for a load and they ask how much money you make they will see your not making any money. So no load.

I was also told by CPA the IRS say if you run a business and say you don't make a profit every year they look at it as a hobby. Your first 3-4 you can pay no taxes but you actually want to pay taxes because that means you making money.

I would have rather made money and pay taxes vs making so little money did not have to pay any taxes. Because when I could not write off truck depreciation anymore I have to pay taxes and that was not easy since I was not making much money to live and pay bills for the first 3 years and now I had a taxea to pay also. Your better off making so much money you have to pay taxes.

 

I won't comment on your accountant's move, because I don't see your ledger in front of me so they can justify it to you.

However if you started an "OTR" company - which I don't get what that is - you should be seriously incorporated beyond an LLC, more or less a C corp. AND if you do that with a good accountant, you won't pay much in taxes while protecting you.

 

The only angles I can think of is the Earned Income Tax Credit as mentioned before, or the Alternative Minimum Tax. And AMT doesn't generally come into play on business deductions. Your Per Diem, however, would be a personal deduction. So, MAYBE.

Either way, I would buy a copy of Turbo Tax and run the numbers through that, and compare. Easy to do, and you need to understand your taxes better than you do now, anyway.

 

Actually, one of the easiest ways to do this is establishing an LLC with an S Corp tax structure. The state considers you an LLC, but the IRS considers you an S Corp. Far less regulatory nonsense of a full blown S Corp or C corp, with all the tax advantages. I am set up this way. I am a W-2 employee of my own 1 truck company. I pay myself a salary which is subject to monthly payroll withholding and filing. The net from the business is a distribution to me, as the owner and president, and only subject to income tax and not social security tax. Even Swift, you know, those slow trucks running around, is an LLC with an S Corp tax structure. Or at least they have been up till the recent merger with Knight transport. Thousands of trucks and they are an LLC.

Total cost to me to set all this up was $150. Yet, I have saved thousands in taxes by doing so. And it is a better business set up for having the truck on with a carrier. No chance of IRS claim that I am not an O/O but a employee of the carrier since they have control of the truck. They just lease the truck from my company. I supply a W-2 employee driver (me) to drive it for them under their control. I instruct my driver (me) to follow the company rules and requirements. I also have allowed my driver (me) to refuse any load he doesn't want to haul and allowed to log off duty at all customers except for checking in an backing to a dock. This follows the FMCSA guidelines that the driver can log off duty at the customer if given permission by the employer (me). As president of the LLC, I am not an employee of the carrier, but just a business leasing equipment to a carrier.

What a country! God bless the USA!

 

Sorry to tell you this, but Swift is not an s-corp. They can't be as they have stock available on the stock exchange as a publically traded company. They are a C-corp, hence the name Swift Transportation Co.

Here are some facts about an S-corp

1. You can't have more than 200 shareholders.
2. You can only have one kind of share. (Companies like swift have what's called common shares and preferred shares at least if not more types. Common is what's typically traded on the stock exchange)
3. No shareholder of an S-corp can be a foreign person. They must me a US citizen.

Please, before you spout something about a business entity type, do your research. Picking the wrong business entity can have dire effects on your business!