without risk, there's no reward.

Example:
TRUCK A (lease) payment is $2160/mn. TRUCK B financed through bank payment is $1160/mn for reference 10yr term
TRUCK C purchased outright for $70,000 no monthly payment.

You earned $200,000 for the year. Without truck or expenses you pay taxes on $200,000 taxable income.

You earned $200,000 for the year. You claim depreciation for TRUCK C. But you take all of the 20% per year on $70,000. You will pay taxes on $186,000 taxable income. You were able to deduct $14,000 this year but will only be able to claim depreciation for 4 years.

You earned $200,000 for the year. You claim TRUCK B. Depreciation on $1160/mn. $1160 x 12 = $13,920. You are able to claim $2784 which is 20% of $13,920 which leaves you $197,216 taxable income.

You earned $200,000 for the year. You leased TRUCK A and claim your lease payment as operating expense at $2160/mn. That's $25,920 for the year. That leaves you a taxable income of $174,080.

Less taxable income lowers your taxable rate. It works out unless you make over $250,000 which places you in Obama's BS and then you're screwed either way.

DISCLAIMER:
These numbers are fictitious and were only used as a reference and your deductible expenses will be much greater which in turn will lower all TRUCKS in this examples overall taxable income. But if all other deductions were identical, L/P would have more actual money in his pocket after he pays the IRS then the other 2.

 

I'm still trying to wrap my head around the idea of making a living on 90 cents per mile plus FSC. I do not have my own authority, but my truck doesn't turn a wheel for less than $2/mile. Mind you, I'm on percentage of revenue and can pick my loads to a point, but even when I was running per mile, the least I ever ran for was $1.55 including FSC. I pay $1860/month for my truck (structured as a lease to own with $10 buyout after 2 years) and $1600/month for my leased reefer with maintenance contract and am usually putting $5K/week or better in the bank minus the truck payment and fuel.

 

I think theres some confusion.

When I said lease Im refering to those who are constantly in a lease purchase. Meaning making a $2500ish lease payment while running for $0.90-$1.00 a mile and fsc.

No amount of tax advantage is worth keeping yourself in that situation, imo. I get accepting hardship for a limited time while trying to get to a better situation but keeping yourself limited intentionally, not so much.

You dont make a living at .90 cpm plus fsc. You survive at that level. If you work your rear off.

 

Your numbers aren't the only thing fictitious. ..

 

Then you're doing something wrong ... $52k a year, after taxes, is above the national median for household income. ..

 

Break down your numbers that result in 52k income. Better yet, assume .90cpm + .21 cpm fsc. $2700 month lease payment. .10cpm maint escrow. And $120 week misc charges from company.

 

Oh ... if I'm only going to assume $.10 for maintenance ... make that $55k a year.

 

Yes, Your Flatulence.

 

Yeah it does get to the point where you seriously have to consider whether its worth carrying on, i don't know how any O/O can manage unless there getting paid over $3 per mile if you are then well done good negotiating after some of these brokers take their cut all the drivers are left with are the scraps. Gitda-done

 

Some of these numbers of what you "have to have" in order to make it as an O/O are pretty wild. My fixed costs are $4,550 a month. That includes my $611 a month truck payment, trailer rental charge and $1,500 a month I set aside for maintenance on the tractor

My fuel cost varies. However, on a 10,000 mile month it runs around $3,500 at my current rate of $2.44 a gallon.

Those two costs equal around .80 cpm on an average 10,000 mile month. So, even at $1.80 per mile average van rate, which is what I average running up and down the I-5 corridor, I make a decent living, don't kill myself (I'm a lazy trailer door slammer) have lots of hometime, etc.