Taxes | Dunham Tax Professionals

3 Things Truck Drivers Need to Know

by Michelle Roberts | Jul 20, 2020 | Taxes

In any business, it’s important to be aware of which expenses are tax deductible and which are not, however, when you are part of the trucking industry, every tax return is unique. Drivers are subject to specific requirements.

Here are some things every driver needs to know:

You Need a Tax Home – This is not necessarily where you live, but rather the city or general area in which you work. For many drivers, this may be a base or dispatch center. If you are an owner-operator using a residence as a tax home, make sure you help maintain the property while you are on the road.
Filing Taxes – If you are a driver, you will receive a W-2 form that reports your wages and income. Employers must mail these forms to the employees by the end of January. You will report this income on Form 1040 or 1040A. Owner-operators have a couple different options for reporting income. You may rely on your detailed records. However, if you have worked as an independent contractor for a company, you will receive Form 1099.
Deductions – The IRS allows for deductions designated as “ordinary and necessary” business expenses. These include but are not limited to: Truck maintenance; Union Dues and Fees; Licensing and regulatory fees and drug testing; Uniform equipment used and paid for out-of-pocket, e.g., GPS units, gloves or boots; Sleeper Berth accoutrements like bedding and alarm clocks – and in some cases even a dog that travels with you that you may use as security; Travel expenses and per diems including hotel stays and meals not reimbursed by your employer.

Tips for Having a Less Stressful Tax Year

by Michelle Roberts | Jul 17, 2020 | Taxes

Accounting for individuals and small business entrepreneurs is not just about that dreaded tax deadline. It’s important to think of it as an ongoing process for the entire year. This way, it becomes less overwhelming when you’re in that tax crunch in April. Here are some tips that will help you in the long run:

Save Your Documents – Basically, whether you spent money on it or monies were remitted to you, save the financial record of it, e.g., receipts, cancelled checks, invoices, all need to be easily accessible. Make this a habit. It’ll be far less stressful for you to set aside a regular time to go over the records you have.
Categorize Your Expenses – Keep your business and personal expenditures separate.
Understand Your Tax Bracket – Tax brackets show you the tax rate you will pay on each portion of your income.
Ask for Help – Hire an accountant or Tax Professional to assist you. It may be long term, but it may also be on a consultancy basis; someone to reach out to and ask specific questions or touch base with as your financial picture changes.

These things will help you build an effective and realistic budget for the foreseeable future.

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Importance of Tax Professionals during COVID-19

by Michelle Roberts | Jul 16, 2020 | Taxes

The COVID-19 pandemic has affected us all. So many of us are struggling with our finances as our work hours dwindle, our furloughs persist, and we’re left wondering how to stay afloat.

In times of crisis, we may not think of tax professionals as essential to our lives, but they are, and if you own a small business, a tax professional – if you don’t already have one – can be a lifeline.

Tax professionals can and do:

Help you figure it all out — tax professionals can help determine your next move how much by looking at what you have versus what you need. They can tell you what programs you’re eligible for, and which options might make the most sense.
Help you focus – if your business qualifies for and applies for a loan with the Small Business Association, an tax professional will be able to help you compile all the data you need to submit, e.g., ledgers, profit and loss statements and sales records, as well as any follow-up required, freeing you up to tackle other critical issues that need your full attention.
Manage what you have left – by helping you adjust your costs and keeping your books in order; optimize your cash flow by identifying what is and isn’t working right now; renegotiate your contracts.
Help you keep your employees – by suggesting things that prevent layoffs or furloughs, managerial and Human Resources concerns like drafting new policies that protect your workers.

Everyone needs help at some point, and experienced advisors like tax professionals and bookkeepers can help get you through the tough times.

Benefits of a Tax Professional

by Michelle Roberts | Jul 14, 2020 | Taxes

When it comes to doing your taxes, you may think it’s easier – or let’s face it: cheaper – to do them yourself. You may think that hiring someone to help you is unnecessary because your business or startup is small. But the truth is: it may be better – and, yes, more economically sound – to consult a tax professional.
A tax professional will:

Be Prepared – with the latest tax laws – to aid you and a potential tax complication that no software is going to get you through.
Adapt and Grow with You – if you’ve started a new business or experienced a big life change that affects your finances, it’s certainly wise to consult a tax professional to answer your questions and concerns.
Provide Flexibility – a tax professional will tell you areas you need to change or streamline in your books and ledgers that can get overwhelming… from managing your personal budget or the payroll for your employees AND keeping them separate.
Be Another Set of Eyes – a tax professional is always key in looking over your return, to find you deductions and credits you may have missed

We may think we need to be wealthy to use a tax professional, but a tax professional may help you save and do the most with the money you do have.

Understanding Tax Requirements

by Michelle Roberts | Jul 10, 2020 | Taxes

As a business owner, it’s important to understand your federal, state, and local tax requirements. This will help you file your taxes accurately and make payments on time. The business structure you choose when starting a business will determine what taxes you’ll pay and how you pay them.

The two most common types of state and local tax requirements for small business are income taxes and employment taxes.

Your state income tax obligations are determined by your business structure. For example, corporations are taxed separately from the owners, while sole proprietors report their personal and business income taxes using the same form.

If your business has employees, you’ll be responsible for paying state employment taxes. taxes, and temporary disability insurance. You might also be responsible for withholding employee income tax. Check with an accountant or tax professional to assist you in making all of the relevant assessments for your business.

If you owe taxes, you have options

by Michelle Roberts | Jul 9, 2020 | Taxes

It’s best for all taxpayers to file and pay their federal taxes on time. If you can’t pay the full amount due at the time of filing, consider one of the payments agreements the IRS offers. These include:

An agreement to pay within the next ten days.
A short-term payment plan to pay within 11-120 days.
An installment agreement, to pay the balance due in monthly payments.

Businesses owing $25,000 or less from the current and prior calendar year, who can pay what they owe within 24 monthly payments, can use the IRS online application.