Trucking Business

Accounting For Truck Drivers

Four Common Trucking Business Mistakes

The trucking industry is constantly changing, and for truck drivers, truck companies,  and owner-operators that means that you also have to be constantly changing. 

Aligning with local legislation, maintaining records, and being your own trucking accountant while still meeting the demand of your business is a hard line to tow; however, it’s necessary nonetheless.

Here are four of the most common mistakes fleet owners and owner operators make when it comes to finances and how TranspoCFO can make sure you avoid them all. 

Not saving receipts or tracking expenses

                Perhaps the easiest of them all, we see this mistake happen time and time again. Fleet owners and owner operators need to keep track of receipts for all trucking expenses including: fuel, lodging, meals, parking fees, truck maintenance, and more. 

Finding a simple and convenient way to keep receipts organized and at the ready will make both bookkeeping and tax preparation for truck drivers a breeze. Even better, having a safe place to store receipts can also make any potential audits error-free which means you won’t have to pay any penalty fees. 

Using traditional tax preparation services

                Taxes for fleet owners and owner operators are very different from the average Joe’s taxes – and that’s where the mistakes happen. Fleet owners and owner operators need to take into account things like special tax, 1099 trucking forms, owner-operator tax write-offs, and truck driver tax deductions.

With all these financial aspects when it comes to taxes, drivers and owner-operators need to work with tax professionals specialized in the trucking industry. Using a traditional independent tax service can leave you overpaying on taxes and more prone to errors – which means more audits for you.

TranspoCFO is the ultimate tax preparer for truck drivers. We’ll not only check all the boxes you need for easy tax-filing, but we’ll also work with you every step of the way to make sure your trucking business is covered in case of any errors.

Putting off trucking bookkeeping

                While no one loves reconciling their books every month, it’s absolutely critical to maintaining your business! 

Our bookkeeping services not only allow you to stay on top of your finances and track your cash flow, but it also gives you a snapshot into how your business is performing overall within the trucking industry. You can find exactly where you’re spending money (and even where not to spend your money!) which will help you make more educated, financially-smart decisions in the future. 

Bookkeeping softwares for trucking companies is a strong start for those trying to manage finances on their own, but no one manages trucking bookkeeping better than TranspoCFO. 

 Not forecasting financials or cash flow

With so many changes constantly impacting the trucking industry, fleet owners and owner operators need to be forecasting their finances, expenses, and cash flow every month.

Forecasting financials combined with scheduled bookkeeping can show you both how business is performing and what to expect in the coming months. Forecasting makes it easy for you to stay on top of bills, payments, and any other expenses while preparing you for the tax season. 

TranspoCFO delivers top-notch truck driver tax preparation and accounting services for truck drivers. We’ll cover everything from pesky receipts and bookkeeping, to forecasting and tax preparation. 

Why owners & fleet operators Shouldn’t Use Regular Tax & Accounting Services

The trucking industry is one of the most vital industries in the U.S. and serves as the backbone for the entire economy – and yet, resources, tax preparation services, and accounting for fleet owners & truck operators is difficult to come by. The lack of tools result in fleet owners and owner-operators searching for independent tax services, trucking accountants, and CPAs. 

Most fleet owners and truck operators wind up with regular tax and accounting services that don’t provide answers to the crucial questions that make tax preparation for truck drivers as easy as possible. fleet owners and truck operators need to be careful when picking a trucking CPA or else you’ll end up looking up questions like:

  • Can truck drivers deduct mileage?
  • How much per diem for truck drivers?
  • Are owner-operators self-employed?
  • Where’s the best state to form an LLC for a trucking company?
  • What can truck drivers deduct on taxes?
  • What are the tax deductions for owner-operator truck drivers?
  • What does the Cares Act mean for owner-operators?

At TranspoCFO, we have answers to all those questions and more! We love the Dave and Jimmy podcast as much as anyone else, but when it comes to the best tax preparation for truck drivers, we provide the best and most in-depth solutions for you and your trucking business. 

While traditional tax services can help with basic tax preparation, TranspoCFO delivers everything needed with expenses and finances. We have everything from account preparation to accounting for fleet owners and truck operators, outsourced CFOs, bookkeepers, and more.

Our Accounting For owner operator Package includes:

  • Account Reconciliation: Balance sheets, Profit & Loss statements, trend reports, and cash flow statements
  • Accounts Receivable/Payables: Process bills and payments, prepare and process invoices
  • Reconciliation: Reconcile electronic transactions into Quickbooks, reconcile bank accounts, reconcile credit card and loan accounts

Our Tax Preparation Services include:

  • Form 1040 – Individuals
  • Form 1065 – Partnerships
  • Form 1120 – C Corporations
  • Form 1120-S — Small Corporations 

Our Outsourced CFO Services include:

  • Forecasting
  • Client Manager meetings (video)
  • General business consulting
  • Regular video conferencing to review key performance
  • Strategy to build to scale or build to sell

TranspoCFO is your one-stop-shop for all trucking bookkeeping needs. Truck drivers and owner-operators need more than just a regular CPA – they need people who understand the trucking business from owner-operator tax write-offs to tax deductions. 

Going with a standard tax preparation service can leave money on the table for you and your company. TranspoCFO will track your cash flow and expenses so you can not only make sure you’re making the most of every dollar but you’re also getting back what you deserve and not overpaying for your essentials.

Stop searching for trucking bookkeeping services, how to file taxes for your trucking company, and winding up in chat forums – get started with TranspoCFO today! With expert accounting for truck drivers, competitive pricing, and services designed specifically for you, TranspoCFO is the ultimate choice when searching for tax professionals for truck drivers. 

And now, with tax season quickly approaching, this is the perfect time to call in the best trucking accountants and make this tax season the easiest season of all. 

How to Apply for Trucking Business Loans and Use Financing

If you operate a trucking business, you’re probably looking for any means to get a competitive advantage. However, as you are aware, the most successful trucking companies are those that quickly adapt to industry trends.

You can get access to the extra working capital you need by applying for a trucking business loan.

How to Choose Financing for Your Trucking Business

This section will mainly focus on trucking business loans; however, there are several loan options to consider, like:

● Business lines of credit:

When you receive a company credit line, you will be given a fixed credit limit against which you can borrow and repay as needed.

● Equipment financing:

An equipment loan may be beneficial If you require financing to purchase business equipment.

● Commercial truck loans:

A commercial truck loan can be obtained by business owners to suit their commercial vehicle needs.

● Business credit cards:

Credit cards are used by some business owners to cover business expenditures. Although they are quite convenient, it is critical to avoid overspending.

● SBA loans:

The SBA offers trucking business owners funding. However, you must demonstrate that your company is unable to obtain standard finance.

The following are some common business loan requirements:

● Time in Business:

Some finance companies have a time in company business requirements, thus new entrepreneurs are unlikely to qualify.

● Minimum Credit Score:

Most financing providers will want to check your credit report. As a result, if you have bad credit, you will need to improve your score before applying.

● Bank Statements:

Most business lenders will ask to see your bank statements. These data may impact your business loan repayment terms and interest rate in addition to qualifying.

7 Ways to Use a Trucking Business Loan

Check out these seven ways how to use your loan to grow your business:

1. Expand Your Trucking Fleet

When it comes to investing in a trucking business, a large fleet may provide a higher return on investment.

Expanding your fleet can save you money on shipping costs by reducing expenses related to:

● Commercial Vehicles and Semi Trucks

● Truck Trailers

● Load Boards

● Permits and Insurance

● Fuel and Tolls

2. Hire More Truck Drivers

As your fleet expands, so will your demand for more drivers. Hiring and training new employees may be time-consuming and costly.

Other costs to consider when employing extra drivers include:

● Commercial driver’s licenses

● Permits and Insurance

● Possible union costs

● Staff uniforms and personal equipment

When looking to expand your trucking business, consider hiring a recruiting firm to acquire experienced drivers.

3. Update Trucking Technology

Trucking technology is continuously evolving and is linked to the industry’s bottom line. As a trucking company owner, you can utilize your trucking loan to cover expenses such as:

● Fuel Management Systems

● Telematics Systems

● GPS Tracking Devices

Buying new trucks with the latest safety features and technology may be expensive, which is why applying for a trucking business loan, such as an equipment finance loan, can make such expenditures possible.

4. Improve Your Business Logistics

Trucking businesses should think about investing in logistics as well. You’ll have better control over your fleet’s performance and be able to save money on shipping with enhanced logistics.

If your organization wants to improve its logistical skills, you should consider investing in:

● Load Boards

● Truck Shops and Repair Facilities

● Warehousing and Distribution Centers

● Customer Care and Invoicing Office

5. Save on Inventory and Purchasing Costs

Because trucking businesses require a large amount of inventory and supplies, you should think about methods to reduce expenses by:

● Purchasing used parts and equipment

● Negotiating better prices with suppliers

With the appropriate trucking business financing, you can take your business to the next level.

6. Pay Off Your Debt

You might utilize the loan to pay off debt. You’ll be able to save money on interest and fees if you improve your cash flow. Your company’s debt-to-equity ratio will also improve, potentially increasing its value.

7. Increase Your Marketing Efforts

By investing in building a marketing strategy for your business, you will attract more clients and boost your income. You may utilize your trucking loan to cover marketing costs, allowing you to spend less of your own money.

Conclusion

You may take your business to the next level with proper trucking financing. You may recruit more drivers, pay off debt, invest in trucking technology, develop marketing strategies, and increase your trucking fleet to propel your company forward.

Five Ways to Cut Down Trucking Business Expenses

Trucking is a vast business. It’s expensive and time-consuming, and unexpected expenses like fuel rates or market fluctuations can wreak havoc on your profit margins if you don’t stay focused. We know running your own company sounds challenging but believe us – it’s worth all the hard work you put in because every day brings new opportunities for growth in this industry!

Here are the top five implemented tips for cutting down and controlling the expenses of your trucking business!

1. Calculate your cost per mile:

The single most vital number you must know for your business is how much it costs per mile to keep your truck running on the road. Yet, many owner-operators don’t take the time or ensure they’re getting accurate information about their spending with regard to this crucial statistic. It may require some spreadsheet work, but it will be worth doing once you have all the data together – think what insights might come from that kind of effort.

2. Track your monthly budget:

One of the essential steps in your business is keeping track of expenses. You need to know where every penny goes to make smart cuts without affecting customer service or revenue streams too much! We recommend working with an expert accountant like us for this task since we can take care of all those pesky numbers that come up during profit & loss statements (P&L).

3. Implement fuel-cutting strategies:

If you want to reduce your fuel costs, there are several ways that can be done without spending too much time thinking about idling. One way is keeping tires at their proper pressure and adding roof fairings for increased efficiency while driving in town or on long trips; this will help cut down your truck’s running costs. Please make sure all staff members use these strategies to reduce demand by helping themselves.

4. Choose an effective route:

When preparing for a hauling trip, it’s important to research the most efficient routes. This way, you can avoid delays or hassles along your journey by taking advantage of shortcuts where they exist and preventing unnecessary stops like toll booths that could add hours to an already long day on the road!

5. Get the right trucking insurance:

Trucking insurance can be expensive, so it’s important to get several quotes before deciding who will best cover your business and its assets. It also helps if you maintain a high credit score; ensure all drivers have good driving records to retain their low rates with the FMCSA (Federal Motor Carrier Safety Administration).

TranspoCFO offers various services for those who operate trucks and want them to run more efficiently, including implementing suitable systems with our help! For detailed information on how our services will help in developing or growing your company, contact us today by booking an appointment.

Owner-Operators Tax Questions: All you need to know

As owner-operators, you must take care of some tax questions. From what deductions you can claim to how to file your return, you will have all the necessary information to ensure you are paying the minor taxes possible.

We have put together a list of the tax questions that owner-operators usually ask.

Common Tax Questions

Q: How much should I need to save for taxes on my business?

A: It is suggested that you save 25–28% of your net weekly income for taxes every three months.

Q: Will I get my tax money back?

A: This depends on your situation, but it is unlikely to happen if you own and drive your truck. If you are getting a tax refund, you have given the government a loan with no interest.

Q: Will my tax preparer send me the 1099-NEC form?

A: No, your 1099-NEC form will be sent to you by your carrier. But if you are a corporation, it is possible that you will not get a 1099-NEC.

Q: What would happen if I did not pay my quarterly tax estimates?

A: If you do not pay all of your taxes, the IRS will charge you penalties and interest.

Q: For a contract worker, what tax forms do I need to fill out?

A: If you have an employee, put them through payroll and give them a W-2 at the end of the year. Give a 1099-NEC to a contract work if you have one.

Q: Should I file a separate tax return for the money I make as an owner-operator and company driver?

A: No. As a sole proprietor, you only have to file one tax return, Form 1040, which has a Schedule C section that lists your business’s income and costs.

Per Diem Questions

Q: How does Per Diem tax deduction work?

A: Per diem tax deduction is for meals and other expenses when traveling for work. As of October 1, 2021, the full-day fee is $69, and the half-day rate is $39. Leave-and-return days are parts of days. Full days are days you cannot drive because of service hours or roadwork rules.

Q: Can I use my e-logs to figure out how many days I have worked per diem?

A: You can if you have e-log records for the whole year. Call your carrier every three to four months and ask for a copy of your e-logs. It is always better to ask for a copy of e-logs by the earliest, as any carriers delete their e-logs every six months.

Deduction Questions

Q: Can truck drivers deduct the cost of fuel tax?

A: Fuel tax is included in the fuel cost, so it is deductible as an outgoing fuel expense for owner-operators.

Q: Can I get the deduction for a home office?

A: An owner-operator may be able to get a home office deduction, but they must pass two tests:

● The home office must be used every day and only for business purposes, and;

● Your principal place of business must be your home office.

Work outside your home, like an over-the-road trucker, but use office space at home to make business calls, organize receipts, and take care of other business tasks. You may be eligible for a home office deduction.

Q: Are medical expenses deductible?

A: If your medical costs are more than 7.5% of your adjusted gross income, you can deduct the amount which is more than 7.5%.

For example, if your adjusted gross income is $50,000 and your medical costs are $6,000, multiply $50,000 by 0.075 (7.5 percent) to find that you can only deduct expenses that are more than $3,750. You can deduct $2,250 for medical costs (6,000 – 3,750).

Q: I bought an Auxiliary Power Unit. Is this purchase tax-deductible?

A: Yes. Send your tax preparer the APU invoice or receipt. It would be helpful if you also wrote down the hours or gasoline spent so we may issue a tax credit.

Q: Dogs on trucks: deductible?

A: Yes, if you have a dog guarding a truck, the expenditures like food and vet bills can be deducted from taxes.

Conclusion

As an owner-operator, it is essential to know about the latest tax news and deductions, which means you need to know what questions to ask your accountant and how the tax code changes. By taking advantage of all the tax breaks you are eligible for, you can keep more of your own money.

Five Essential Steps to Start a Trucking Business

The process of starting and owning a trucking business can be overwhelming and tiresome with everything that needs to be done. Whether you’re looking to start a small business in trucking or already driving truckloads, much research and preparation are required before you go down this new path.

Here are five steps to start your own trucking business with one truck.

  • Pen down a business plan:

Writing a business plan can give you a road map for your trucking business. If you’re starting, this document will describe the kind of trucking business you want to operate and what resources you need to work on at maximum performance. This business plan can also prove helpful as you grow your operation or bring on additional drivers. Another critical aspect of any business plan is your vision for growth! Having a clear picture of where you want to take your trucking company will help you avoid common hurdles such as risk aversion. Writing this document might not be easy, but it’ll help ensure your trucking startup doesn’t stumble upon some of the more common roadblocks that can kill an exciting idea.

  • Decide on the entity type of your business:

Setting up your business can feel overwhelming, but the most challenging part is usually figuring out which type of entity to choose. Knowing your options helps you determine the best structure for your business and the tax consequences that go along with that structure. Understanding each entity’s pros and cons will help you decide on the proper system for your business. With TranspoCFO, you’ll find out: What’s the difference between sole proprietorship, S corporation, and LLC? How should I set up my business? Which one should I choose?

  • Decide which carrier you want to drive for:

Suppose you are interested in becoming an owner-operator truck driver. In that case, you must research which fleet will work best for your trucking needs. Once you have found the one that works best for you, it is time to do some legwork. You will have to decide whether or not you want to drive local based on your preferences or if you want primarily long-haul driving opportunities. There are many different carriers; do some research to find out more about their reputation and what type of freight they typically haul. They will list what parts of the country they operate in and the unique freight items they specialize in. Once you have narrowed it down from there, it is time to sign up with a carrier!

  • Own or lease a truck:

Before you set out on your own, one of the most important things to do is obtain your truck. Depending on what type of trucking business you are going to start, you may be able to get a loan from a bank or credit union. If this isn’t an option, some leasing companies offer lease-purchase programs. Through this program, you will make monthly payments on the vehicle while paying off the loan at the end of the term. Other leasing companies allow you to purchase the vehicle anytime during the contract’s duration. In either case, you may be eligible for some discounts on fuel and maintenance costs through these programs.

  • Hire an experienced service provider:

TranspoCFO will help you accomplish all the things you need to do before owning a trucking business. We have been providing these services to owner-operator truck drivers for over 20 years, which means we can recommend the best business entity and tax structure for your industry. We will help you with a business plan, decide what type of vehicle you should drive, and manage all your bookkeeping, accounting, and tax needs while you focus on driving.

Ready to take your business to the next level? TranspoCFO can help you develop a long-term plan of action. Whether it’s accounting, bookkeeping, tax preparation, or unlimited business consulting that you need, we have the tools and experience to get you there!

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