sub contracting Tax question

[Shadowpanda]

My friend and I are about to team for an O/O leased to FXCC. I know that many O/O's are using John Turner or someone like him. I am looking for recommendations and general info on stuff like record keeping (what receipts to keep?) and just how things are different for us now tax wise. Thank you.

 

[greg334]

Keep everything! If you pay for fuel, keep a copy of the receipts with the mileage marked on them.

You do have a contract with the owner - right?

You did talk to someone EA or an accountant to see what you can do to lessen your tax burden. I may be one of the few who say don't use someone specialized yet, but get someone who will help you and your partner outside of the truck.

 

[Shadowpanda]

Greg,
We have signed nothing yet, we go to orientation @FXCC in Ohio on the 25th, I would presume thats where a contract will be signed.
The deal is we get 40% and pay NO truck expenses at all. So at this point all I am concerned with (I think) are personal deductions and I wonder if even that boils down simply to the $59 per diem? I've seen the hotel per diem discussed on other threads as well, some people say to claim it, others say no. Do I really need a CPA/John Turner sort at this point? What is an EA please?

 

[greg334]

The contract is with the owner of the truck and you, not with FedEx. I would have had that in place before a commitment to go to FedEx.

As for per diem rates and all of that, don't worry about it right now. Just keep good records right from the start, and put everything in a booklet or something like that including the receipts spent on orientation. They have a little booklet called the truckers expense book (the name escapes me at this moment) which has all kinds of categories like food and so on.

Even though people will not keep track of every thing they buy, it is not that you need to if you take the per diem rate for taxes but to control spending and track what you actually make, it is a good idea - beside making a good habit of it.

An EA is an Enrolled Agent - or better yet here is the definition from the NAEA site; "An Enrolled Agent (EA) is a federally-authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audits, collections, and appeals."

 

[Shadowpanda]

Greg,
Ok thank you. Actually it worked the other way around for us. My friend dispatched for FXCC for several years before he moved into trucking. HE was talking to his old boss, who suggested we try to get on with FXCC. We got approved by Fed Ex and then they shopped our names around to O/O's who were needing drivers. The company we chose seems quite large to me, I was told they own 150 or so Tractors. I will call the
O/O's tomorrow about the contract.
How much of my pay should I be setting aside for estimated tax payments? I was thinking 30% should do it but Im not sure on that.

 

[greg334]

How much of my pay should I be setting aside for estimated tax payments?

This is a good question, I would say - that's a good start but it depends and I would talk to an accountant to advise you at this point because I don't know your situation.

 

[nightcreacher]

Driving the truck as contract labor,you need a contract from the people your going to drive for.
If they give you a w4 to fill out,then they are going to withhold your taxes and your actually a company driver for them
In any event,you can right off 80% of $52 per day for every day your away from home.Unless the company your driving for pays you extra for a food allowance.

Other right offs,are almost all the money you spend to do your job,from doing your laundry on the road,to motels,even the pens you buy can be a right off.
You dont need a specialized accountant,but you do need one that is familiar with the trucking tax laws.H and R Block isn't a good place for truckers to go.
Good luck,welcome to E O

also,try with holding 30% of your pay for you tax liability,this should more than cover your taxes