Every successful business owner should understand the importance of proper and accurate bookkeeping. Keeping accurate and concise records has intrinsic value to your business in the following ways:

1. Well-kept records assist in audit circumstances. If your records aren’t complete and an auditor can’t determine your expenses and income to support your claims, they might be disallowed.
2. Proper records may result in tax savings. Proper records serve as a reminder of the costs you’re permitted to deduct.
3. Proper records assist with tax planning, financial projections, and budgeting. You’ll be better educated on the financial stance of your business as you keep accurate records and books.
4. Proper financial statements, records, and books help to receive financing from creditors.
5. Accurate records will keep you organized and will help to reduce stress.
6. It is a legal requirement for every existing business to keep these records. Anything that can be used to support all claims that are made on tax returns and additional government paperwork must be kept, saved and made available as requested by the IRS.

Every tax season, thousands of truck drivers leave hundreds of thousands of dollars in tax deductions on the table. This is due in large part to inadequate planning and poor bookkeeping. In addition, many tax professionals do a poor job at properly informing truckers of the many different tax breaks available to them. Truck drivers have access to many different tax deductions and credits, and clearly this stresses the importance of consulting a tax professional.

It’s certainly a large investment to purchase or lease the vehicles you need for your business, but depreciation must be factored into your bottom line, as well. Depreciation is the decrease in value of the equipment or asset for the period it is in use. Internal Revenue Code says that you can only claim depreciation for three years on tractors and five years for trailers, potential tax liability will increase dramatically in the last qualifying year. This leaves many with huge tax liabilities that they didn’t plan for and can’t afford to pay.

Are you or your company using Cash or Accrual Accounting?   The difference between cash and accrual basis is cash basis requires taxes to be prepared based on monies received and spent during a given tax year. Accrual basis requires your taxes to be filed based on monies earned, but not necessarily paid to you, as well as the expenses they incurred.  For a trucking company, it’s likely better to be on a cash basis because most of a trucking company’s receivables outweigh their liabilities.

As an Over the Road (OTR) professional, you are eligible for deductions related to meals and entertainment expenses by way of a Per Diem. Per Diem rates are set by fiscal year, effective October 1 each year. Truck drivers subject to DOT Hour of Service Rules could deduct 80%. However, if your company pays drivers a per diem then the driver can’t deduct the per diem too.

You should protect your personal and financial data from criminals. Thieves use your data to file bogus tax returns and commit crimes while impersonating you.  

Follow these steps to protect yourself and your data.

Keep a secure computer.

• Don’t leave personal information; lying around.
• Give personal information only over encrypted and trusted websites.
• Use strong passwords and protect them.

Avoid phishing and malware.

• Verify contact information about companies or agencies by going directly to their website.
• Think twice before opening email attachments.
• Don’t automatically download attachments.
• Download and install software only from known and trusted websites.

Protect personal information.

• Forward IRS-related scam emails to phishing@irs.gov.
• Report IRS impersonation telephone calls at www.tigta.gov.