It is time to prepare your tax report and, therefore, a visit to our accountant to ask for suggestions on how to run our transportation business. We must bear in mind that what worries us most is the amount of taxes to be paid and based on this point we will provide some suggestions.
Create a corporation: One of the most important decisions that an owner-operator must make is how to form a corporation. Yes, there are have several types of corporations, but the most recommended is the Small Business Corporation. Some specialists in the transportation industry say that creating a corporation is important because certain filters or layers are created between the operator and the Internal Revenue Service.
This is a particularly important step since the Small Business Corporation allows us to reduce taxes, protect our assets and get away from audits with the IRS. In addition, it gives you the benefit of being able to employ members of your family, such as your wife or your children, for office work or for washing the truck. Thus, in this way, you could divide the income between each member of the family that works in the corporation.
Depreciation Expenses: Any equipment that you use for your transportation business is deductible. That is in such a way that if you believe that you pay excessive taxes it is advisable to renew your equipment and thus obtain advantages of the benefits of being able to deduct up to 100% of the value of the investment in a truck or trailer, either new or used. This law is an incentive for truck drivers based on the Tax Cuts and Jobs Act signed on December 22 by President Trump and says that beginning in 2018 until 2022 the trucker will be able to claim 100% of the value of his equipment, new or used.
Hire a Specialized Accountant: It is possible that some random preparer has been helping you in the preparation of your taxes for the last 10 years and it is much cheaper than a specialized transportation accountant, but do you think he understands the pros and cons of your business? It is possible that he might not and in the end, this could cost you more money.
Dealing with a specialized accountant, who deals specifically with transportation, will allow you to maximize what you claim and minimize the taxes you are paying. It is important to sit down with an accountant who knows the trucking industry and discuss the complexities of your business.