January 1,2013, everything old becomes new, As it stands as of today the tax cuts in force for the past ten years will expire, the payroll tax cut on Social Security will expire and the rate will go back up 2% to its original amount. New taxes in many states could become law and active in 2013. What is a trucker to do to stay ahead of the game?
The most important thing you can do now to get ready for the new tax schedules is to go to work on getting all your tax questions to your Accountant, or Tax Preparer now. That way you will have plenty oftime to take the actions they suggest on saving you the most money.
How will you be paying your taxes on April 15, 2013? How much do you owe now and how much will you owe at years end? How much in penalties and interest can you save by acting now?
Are you an owner-operator or an employee (Company Driver)? All these things need to be addressed now in order for your to pay the Internal Revenue Service and your state the least amount of money you can legally pay. The way to help in all of these situations is to keep very, very good records and most smart phones have apps that will allow you to keep good records that you incur the expense. Now is the time that a tax adviser is a good investment., not when your scrambling to write off deductions so you will have enough money to pay the tax man without risking tax fraud.
Profit margins in the trucking industry this past year have be just OK, not great. So it is much easier to save money then to make additional money.
Everyone knows the tax man does not tax you on what you save but only on what you earn. Therefore, you can make 15-39 percent on money you save by not paying income tax on it.
Think about that, you earn $100 and have to pay tax on it, but you save $100 on two steer tires and you get to keep it all.
The best possible and most cost effective way to keep as much of your hard earned money as possible is to understand what government taxes apply to you as a truck driver so you can make sure you pay all the taxes you owe in a timely manner and not have to pay the outrageous penalties and interest the IRS charges.
Keep in mind the government is constantly changing the tax laws, rules and regulations and you can always contact the taxing authority directly. The IRS has help available for you at (800-829-1040), where you mayor may not receive correct advise.. If you do use the IRS phone number, please ask that they send you there advise in writing so that if you rely on there advice, they will not charge your penalties or interest if you follow there advise.
However, I suggest you enlist the advise of a Professional licensed tax adviser such as a CPA, EA, or Tax Preparer(RTP) who specializes in the trucking industry to be sure you have the most up to date information.
Often you will discover that the state and local tax collectors are much more difficult to deal with then the IRS and are a whole lot less flexible with the taxpayer in working out payment schedules if you are unable to pay taxes due in a timely fashion. It seems the state is more willing to lock your doors and do it quicker than the IRS.
If you are an independent business owner, which an independent contractor or owner-operator is, that you are responsible for making required taxpayment in a timely manner.
If you pay yourself a salary or have other employees, you are required to withhold taxes based on a tax schedule just as any other business would for employees. This area is one where the State Tax and the Internal Revenue Service holds the employer to very strict standard. The funds that you withhold from an employee's wages to remit to the state and the IRS are not your money and very stiff penalties are imposed if you are as little as one day late in remitting these taxes and reports.
In fact, the possibility exists for the state or IRS to file embezzlement charges against you for failure to send your employee's taxes to them. I would imagine that the IRS and the state taxing units have closed more trucking company doors than all the high fuel and insurance charges ever have. I think this is so sad, because you have very little, if any control over fuel and insurance, but you have complete control over when and how you pay your taxes.
If you do not have employees and are not paying yourself a salary, but rather reporting income on your annual tax return, it is important that you make your estimated quarterly tax payments on time. Your estimated tax payments are due, on the 15[SUP]th[/SUP] of the month following the end of each quarter. (April 15, July 15, October 15, and January15). If you have not remitted 90 percent(%) of the total tax due or 100 Percent (%) of the previous year's income taxes, you can expect the IRS to impose penalty and interest for the late payments after the April 15 deadline for your income tax returm
Remember,the balance of any tax due must be paid by April 15 to avoid penalties, even if you file for an extension. Perhaps the safest way to ensure you avoid penalties is to simply take the previous years income tax owed and divide by four to pay the tax on this estimated amount per quarter.
(Franklin Katz, is owner of Frank's Tax & Business Service, a Tax and Bookkeeping firm dedicated to the preparation of all types of income tax returns and bookkeeping procedures since 1975.
A former Company Driver and Owner-Operator dedicated to the Transportation industry since 1998.
For more information call (704) 739-4039 or go to www.prep.1040.com/frankstax
The most important thing you can do now to get ready for the new tax schedules is to go to work on getting all your tax questions to your Accountant, or Tax Preparer now. That way you will have plenty oftime to take the actions they suggest on saving you the most money.
How will you be paying your taxes on April 15, 2013? How much do you owe now and how much will you owe at years end? How much in penalties and interest can you save by acting now?
Are you an owner-operator or an employee (Company Driver)? All these things need to be addressed now in order for your to pay the Internal Revenue Service and your state the least amount of money you can legally pay. The way to help in all of these situations is to keep very, very good records and most smart phones have apps that will allow you to keep good records that you incur the expense. Now is the time that a tax adviser is a good investment., not when your scrambling to write off deductions so you will have enough money to pay the tax man without risking tax fraud.
Profit margins in the trucking industry this past year have be just OK, not great. So it is much easier to save money then to make additional money.
Everyone knows the tax man does not tax you on what you save but only on what you earn. Therefore, you can make 15-39 percent on money you save by not paying income tax on it.
Think about that, you earn $100 and have to pay tax on it, but you save $100 on two steer tires and you get to keep it all.
The best possible and most cost effective way to keep as much of your hard earned money as possible is to understand what government taxes apply to you as a truck driver so you can make sure you pay all the taxes you owe in a timely manner and not have to pay the outrageous penalties and interest the IRS charges.
Keep in mind the government is constantly changing the tax laws, rules and regulations and you can always contact the taxing authority directly. The IRS has help available for you at (800-829-1040), where you mayor may not receive correct advise.. If you do use the IRS phone number, please ask that they send you there advise in writing so that if you rely on there advice, they will not charge your penalties or interest if you follow there advise.
However, I suggest you enlist the advise of a Professional licensed tax adviser such as a CPA, EA, or Tax Preparer(RTP) who specializes in the trucking industry to be sure you have the most up to date information.
Often you will discover that the state and local tax collectors are much more difficult to deal with then the IRS and are a whole lot less flexible with the taxpayer in working out payment schedules if you are unable to pay taxes due in a timely fashion. It seems the state is more willing to lock your doors and do it quicker than the IRS.
If you are an independent business owner, which an independent contractor or owner-operator is, that you are responsible for making required taxpayment in a timely manner.
If you pay yourself a salary or have other employees, you are required to withhold taxes based on a tax schedule just as any other business would for employees. This area is one where the State Tax and the Internal Revenue Service holds the employer to very strict standard. The funds that you withhold from an employee's wages to remit to the state and the IRS are not your money and very stiff penalties are imposed if you are as little as one day late in remitting these taxes and reports.
In fact, the possibility exists for the state or IRS to file embezzlement charges against you for failure to send your employee's taxes to them. I would imagine that the IRS and the state taxing units have closed more trucking company doors than all the high fuel and insurance charges ever have. I think this is so sad, because you have very little, if any control over fuel and insurance, but you have complete control over when and how you pay your taxes.
If you do not have employees and are not paying yourself a salary, but rather reporting income on your annual tax return, it is important that you make your estimated quarterly tax payments on time. Your estimated tax payments are due, on the 15[SUP]th[/SUP] of the month following the end of each quarter. (April 15, July 15, October 15, and January15). If you have not remitted 90 percent(%) of the total tax due or 100 Percent (%) of the previous year's income taxes, you can expect the IRS to impose penalty and interest for the late payments after the April 15 deadline for your income tax returm
Remember,the balance of any tax due must be paid by April 15 to avoid penalties, even if you file for an extension. Perhaps the safest way to ensure you avoid penalties is to simply take the previous years income tax owed and divide by four to pay the tax on this estimated amount per quarter.
(Franklin Katz, is owner of Frank's Tax & Business Service, a Tax and Bookkeeping firm dedicated to the preparation of all types of income tax returns and bookkeeping procedures since 1975.
A former Company Driver and Owner-Operator dedicated to the Transportation industry since 1998.
For more information call (704) 739-4039 or go to www.prep.1040.com/frankstax
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