Tax Time Questions
Tax time is not only for gathering all your information for your 2007 tax return; it is also time to be planning for 2008. Tax time reminds people to be aware of their tax situation. With that in mind, the following are common questions that we get pertaining to taxes.
2007 Expedite Freight Trends Recap
While business in the trucking industry overall was down about 2% in 2007 compared to 2006, a measure of the expedite business shows it did far better during the same time – although times are not as good as they once were.
Income Tax Time
April 15th is the last day to make an IRA contribution (traditional or Roth). But your business can still set up a Self Employed Retirement Plan (SEP IRA) for 2007 until the extended due date of October 15th for individuals and partnerships, and September 15th for S-corporations.
A SEP IRA owner may contribute and deduct up to 25% of compensation up to $45,000 for 2007.
A Look Back and Into The Future
Time for a reality check. Following three years of strong demand growth that led to higher volumes and pricing power for the trucking industry, demand began to wane in the latter half of 2006 and weakened further over the course of 2007.
The hoped-for increase in demand that many expected in the second half of this year never materialized, and demand in the peak season has been about as weak as the lackluster period last year.
Quick Trucking Tax Tips!
Records help you document the deductions you’ve claimed on your return. You’ll need this documentation should the IRS select your return for examination.
Normally, tax records should be kept for three years, but some documents – such as records relating to a home purchase or sale, stock transactions, IRA and business or rental property – should be kept longer.
Year End Tax Planning
Marriage, divorce, financial support of a parent, cohabitation, birth of a child, adoption, death of a loved one – all of these changes have an impact on your income taxes. Be sure to consult your tax preparer if you have experienced any of these events in the past year.
Note: You are considered married for the entire year even if you get married December 31st.
Don't Kill Your Fuel Economy!
Truck aerodynamics, engine type, gear ratios, tire size and type and other spec items are all important to the quest for fuel economy, but programming your personal driving habits towards saving fuel is the most essential part of the equation.
If your primary focus (along with safety, of course) is centered upon squeezing every mile from every drop of fuel, you will develop those habits that will keep a greater portion of your money in your pocket and not the fuel tank.
A Word to the Road Wise
Experts from Popular Mechanics tested seven fuel-saving(gas engines) products for its September 2005 issue and found no significant change in miles-per-gallon ratings. Two actually increased fuel consumption by 20 percent, according to the writer, and a third one melted before the test was completed.
As a spokesperson for the EPA puts it, these devices, "Don't work. If it were that easy, vehicles would be built that way, especially the magnets and other gizmos."
IRS audit help and business plans
According to the SBA, a business plan should contain details about what the business will do, as well as important information regarding marketing, financing, and management. A business plan should also include all proposed equipment purchases or leases, financing methods, and start-up costs.
Every business plan must include an executive summary and
supporting financial documents, such as tax returns, personal financial statements, and resumes of the principals and key personnel involved in the business.
Rates Verses Operating Costs
Many years ago at the birth of expediting, this would be a topic seldom discussed. Compared to other forms of trucking, expediting was commanding some of the highest rates in the industry. Even today, it still has some of the highest rates available to the owner operator.
What happened over the last five to ten years?
Much like other industries, it became a supply verses demand issue. What started with Roberts Express as the pioneer, quickly turned into hundreds of companies competing for the same freight. Over time, rates have either been stagnant, or have dropped.