Owner Operator truck drivers and Small Fleet Owners have a lot of responsibility. In addition to being in charge of general operations with their trucks, loads and schedules, they must keep carefully detailed records. This includes payroll records for themselves, their drivers and other employees. Additionally, it includes operating expenses such as licensing fees, permits, tolls, fuel expenses, lumper fees, health insurance, commercial vehicle insurance, repair expenses for vehicles, leasing fees for vehicles or equipment, rent or mortgage office or warehouse expenses, etc.
Many small business owners dislike the time and effort required to keep detailed business records. However, when the time comes to file business tax returns you can appreciate the effort you put into keeping your business records up to date. If you’ve keep good records it will be much easier for you or your accountant to prepare accurate tax returns for your business.
1. Consider All Deductions within Reason
If a business recently upgraded with new hardware or software, some of these new tools may be eligible for deductions. Section 179 of Small Business Expensing allows owners to deduct the full purchase price of qualifying equipment and software up to $500,000. This is a 2013 tax extension, and it’s potentially on the chopping block for 2014.
For those filing home-office deductions, this year there is a simplified form that caps at $1,500. This isn’t a replacement of the traditional home-office form — taxpayers can still file the original way if home-office expenses exceed $1,500.
Some common deduction mistakes to avoid include:
– 43% of the accountants said that SMB owners over-deduct when it comes to income.
– 27% said that small-business employers misidentify their workforce along lines of employee and contractor states.
– Some 30% of owners tried to list a family vacation as a business trip. Meanwhile, 15% cited pets and pet food as a deductible expense.
2. Be Aware of Changes to Healthcare and Payroll Taxes
Under the Patient Protection and Affordable Care Act, beginning in 2013, higher-income taxpayers must pay a 3.8% additional tax on Net Investment Income. Additionally, high-earners will incur an Additional Medicare Tax of 0.9% on wage and/or self-employment.
Business owners should also keep in mind that the American Taxpayer Relief Act did not extend the 2% break (2011–12) to the payroll tax.
3. Proactively Record Expenses: Establish and maintain even more accurate systems for storing receipts. Cloud-storage technologies offer a gamut of easy and affordable ways for SMBs to keep track of their expenses. One click with the camera on an iOS or Android device and bid adieu to piles of crumpled receipts.
4. Don’t Leave Money on the Table: Out-of-pocket expenses landed as the number one overlooked deduction followed by auto expenses, according to the survey. So track those miles, save those dinner receipts, and write off that iPhone 5 – it will all add up in the end. Read more here: