Know what business-related expenses you can include in your annual tax filings.
THIS ARTICLE IS FROM the 2007 edition of the Partners in Business manual for owner-operators. The next Partners in Business seminar will be during the Mid-America Trucking Show in Louisville, Ky., March 27-29. To order a manual, call (800) 633-5953, Ext. 1135. Visit www.PIBlive.com for more excerpts and program information. The seminars and the manual are brought to you by Overdrive, ATBS, Freightliner Trucks and Castrol.
As an owner-operator, you are self-employed, so any expense related to operating your business is tax-deductible. The Internal Revenue Service requires you to provide written proof of an expense, such as a receipt, cancelled check, settlement statement or bill. When no such document is available, as with use of your personal vehicle, your records in a notebook will suffice. You must provide the date, place, type of expense and the amount.
CASUALTY FINANCIAL LOSS. This is from damage such as hail, wind, theft and accidents.
DEPRECIABLE PROPERTY. The types of property that can be depreciated include tractor, trailer, equipment, buildings, computers, fax machine, copy machine and furniture used in business.
ENTERTAINMENT. Only for entertaining business associates. Personal entertainment, such as movies or games, is not deductible even while on the road.
GIFTS. Limited to $25 value for any person.
INSURANCE PREMIUMS. Includes personal insurance, such as health.
HOME OFFICE. The home office must be your principal place of business. You must use it, including its computer and other equipment, regularly and exclusively for your business.
RETIREMENT PLANS. These include Keogh plans for self or spouse, SIMPLEs, Simplified Employee Pensions (SEPs), IRAs and others.
BUSINESS LOANS AND MORTGAGE. Interest paid during the calendar year.
PER DIEM. Covers meals and incidentals at a fixed daily rate when you are away from home overnight. There is no need to save receipts.
START-UP COSTS. Trips to visit truck dealers, bankers, carriers, etc., in launching your operation.
SUPPLIES. For home office or truck.
TAXES, LICENSES AND OTHER GOVERNMENT FEES. Half your self-employment tax is deductible. Fines and citations for illegal activity, such as speeding or hauling overweight loads, are not tax-deductible.
TRAVEL. Airline tickets, rental cars, lodging.
TRUCK LEASE. Under a lease-purchase, 100 percent of your truck payments are deductible. Security deposits are not deductible.
Here are some of the more common deductions available:
ADMINISTRATIVE FEES / BUSINESS COSTS
ATM fees, bank fees
Broker, legal fees
Credit card fees
Fuel card fees
Photocopies and faxes
Postage, FedEx, TripPak
CB equipment and repairs
Cell phones and accessories
Cargo insurance claims
Health, dental, vision
PERMITS, LICENSES, FEES
Fuel taxes and road taxes
Federal Highway Use Tax
IRP, licenses and permits
Eye exams, glasses
Business-related mileage on personal vehicle
TRACTOR-TRAILER: EXTERIOR AND UNDER THE HOOD
Chains, tarps, pallets, bungee cords
Fuel and fuel additives, filters
Kingpin locks, padlocks
Repairs, parts, labor
Tires and repairs
Trailer and tractor washes
Atlases and maps
Coffeepots and cookers
Coolers and ice
Flashlights and batteries
Hoses and cables
Rugs, floor mats
Seat covers, cushions