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No matter if you’re an ATBS client or you’ve been using another tax professional, you’ve probably heard the terms tax credit and tax deduction. But do you know the difference between the two? Both are going to save you a significant amount of money when it’s time to file your taxes , but they operate in very different ways. Keep reading as we dig into a tax deduction vs. a tax credit. What is a tax deduction? A tax deduction happens when you have a tax deductible expense or an exemption. This reduces your overall tax liability. As an owner-operator truck driver, you have numerous tax deductions for your business including your truck payment, fuel expenses, accounting and bookkeeping fees , and more. Here is an example to help you understand how tax deductions work. Let’s assume your income is $75,000, you own a home that has property taxes of $4,500 per year. Because property taxes are an income tax deduction, your taxable income would now be $70,500. What is a tax credit? Tax credits work very differently than tax deductions. Tax credits will reduce your tax liability instead of reducing taxable income. One of the most important tax credits for parents is the child tax credit. The child tax credit gives parents a $2,000 tax credit for each child dependent. To show you how a tax credit differs from tax deductions, consider the following example. Let’s assume you have a tax liability of $5,000 and you have two children. The two children would allow you to receive a $4,000 tax credit. This would decrease your tax liability to $1,000. Standard Deductions vs Itemized Deductions: Which should you take? When filing your income tax return, you have the option to use either a standard deduction or itemized deduction. Starting with tax year 2018, the standard deduction increased drastically. For 2024, the standard deduction is $14,600 for single filers and those married filing separately and $29,200 for those married filing jointly Alternatively, if you have enough deductible expenses in any single tax year, you can choose to itemize your deductions. However, now that the standard deduction has been increased by nearly 100%, the number of people itemizing is significantly less. Some common itemized deductions include the following: ● Mortgage interest ($750,000 limit) ● Property taxes (up to $10,000) ● Medical and dental expenses (when expenses exceed 7.5% of adjusted gross income) Let’s assume you have personal deductions totaling $13,000 and you file your taxes married filing jointly. Because this is significantly less than the standard deduction of $29,200, it would make more sense to file your return using the standard deduction. However, if your itemized deductions are greater than the standard deduction, it would make sense to file with itemized deductions. No matter if you’re filing your return with tax deductions, tax credits, or both, you’re going to want to apply the maximum allowed. Both are going to reduce your taxable income and both are going to help keep more of your hard earned money in your pocket. If you have any questions about how tax credits and tax deductions affect your tax situation, feel free to reach out to ATBS by calling 866-920-2827.

There are many differences between W-2 and 1099 truck drivers. In this article, we'll talk about the main differences between the two, specifically how they file and pay their taxes . The most significant difference between W-2 and 1099 drivers, is that a W-2 worker is classified as an employee and has taxes withheld from their paycheck prior to the employee receiving their pay. The employer of the W-2 employee is responsible for remitting the various taxes withheld to the appropriate governmental agencies. A 1099 worker is classified as a contractor, and a 1099 worker does not have taxes withheld from their paycheck. A 1099 contractor would receive the full gross amount as pay. The company who has hired the 1099 worker has no responsibility to remit taxes. The tax remittance or payment of tax is the full responsibility of the individual 1099 worker. The Form W-2 is what a company issues to an employee at the end of the year and the Form 1099 is what a company issues to a contractor at the end of the year. Both of these forms indicate the amount of money earned by the worker within the given year but the W-2 will include information about how much in taxes was withheld while the 1099 reports only earnings. Let’s dive into some of the tax differences between these two types of workers based on the tax form they receive. Are you a self-employed truck driver that needs help with your taxes, accounting, or bookkeeping? Click here! W-2 In the world of trucking, company drivers are considered W-2 employees. They are the typical, hourly or salaried workers that are hired to perform a specific role. In terms of truck driving, they are given a schedule, a consistent paycheck, benefits provided by the company, a company truck, etc. Every tax season, employers provide a Form W-2 to the IRS and the employee. On the Form W-2, the employer will report the annual compensation paid to their employee and the taxes withheld from that compensation for federal income taxes, state income tax (if applicable), and taxes remitted for Social Security and Medicare. When it comes to paying taxes as a W-2 employee, the employer has already withheld federal and state income tax, Social Security tax, and Medicare tax from employees when they pay them. All of these amounts are included on the W-2 form that is received from the employer which is then used to file taxes. Employers must mail Form W-2 to their employees by January 31st of each calendar year. Filing taxes as a W-2 employee is much simpler compared to filing taxes as a 1099 worker. The filing of an income tax return is the process in which a taxpayer would determine if they had their employer withhold too much tax throughout the year. In the event that tax was over withheld a tax refund would be issued to the W2 employee by the IRS and state (if applicable). If the employee did not have their employer withhold enough in taxes, then the employee would be required to pay the IRS the amount of taxes that are still due. In terms of deductions, specifically for truck drivers, W-2 company drivers can no longer deduct the Per Diem deduction . Additionally, a majority of W-2 drivers end up taking the Standard Deduction unless they have a lot of medical expenses or if they dealt with a significant loss due to a natural disaster. The Standard Deduction is an IRS-allowed deduction for each taxpayer and/or spouse used to reduce taxable income. There is nothing that a taxpayer must do to receive the Standard Deduction; it is an automatic allowance to each taxpayer when filing their tax return. 1099 1099 workers may not have a single employer and could have been contracted on with multiple customers that they worked for throughout the year. This is because they own their business and contract their services. They’re also responsible for reporting their income to the IRS themselves, paying Self-Employment Taxes (which cover Social Security and Medicare), and paying income taxes. The companies that hire 1099 contractors DO NOT pay or remit taxes on behalf of that 1099 contractor. The most common types of 1099 truck drivers are: Independent contractors who source their own loads, use their own equipment, and run on their own schedule, or Those who opt for longer-term more rigid work arrangements with a specific carrier A Form 1099 is a document used by companies to report payments made to a contractor for work performed during the prior year. Companies that pay contractors $600 or more during a year must issue the contractor a Form 1099-NEC by January 31st of the following calendar year. The company that issues a contractor a 1099-NEC is also responsible for filing the 1099-NEC with the IRS by January 31st of the following year. Contractors pay a self-employment tax because the companies that they work with don’t withhold or remit Social Security or Medicare taxes for them. The self-employment tax rate is 15.3%. It’s a little more complicated than that, as only income up to $174,900 is subject to Social Security tax whereas all your income is subject to Medicare taxes. 1099 contractors have a lot more freedom than their W-2 peers when it comes to tax payments and the deductions they can take. It is highly recommended that 1099 contractors set aside 20-25% of their net income to make quarterly estimated tax payments. The IRS does require self-employed individuals to pay taxes quarterly. If this is not adhered to, there is an IRS penalty when filing the tax return on top of a much higher one-time tax payment. Unlike W-2 employees, 1099 workers are still eligible to deduct Per Diem from their taxes. Additionally, thanks to the Tax Cuts and Jobs Act, they are allowed significant additional tax deductions from the Qualified Business Income Deduction or QBI. QBI is a 20% pass-through deduction calculated using the lesser of your self-employment earnings or your overall taxable income. 1099 workers are also able to deduct health insurance premiums and business expenses on top of their Standard Deduction. Even though self-employed individuals are subject to a more complicated tax filing process, they’re eligible for more deductions as well. Big Takeaways For 1099 workers, taxes are not automatically taken out of their paycheck by whoever they are working for. 1099 workers should make sure they’re setting aside 25% of their income to make their tax payments quarterly 1099 workers should take advantage of all available deductions they’re eligible for. If you’re a new 1099 worker, or still don’t have a very good grasp on how to manage your taxes, let ATBS know and we can help you out!

When I started my career as an independent owner-operator under my own authority, I spent a lot of time putting my business plan together. One of the sources I used was the Small Business Administration. Utilizing the SBA turned out to be a great asset as I charted the course for my new business. U.J. Cozart was my aide at the SBA. He put me through the paces and helped me put together a business plan, a backup plan to the business plan, and a backup to the backup plan to the business plan. Having a backup plan became very handy as I embarked on my new business venture. A few times I had to dip into that plan b. I will never forget one of the last meetings that I had with U.J. Cozart. He had run my plan past peers in the trucking industry. He told me that I had everything in order. I was ready to get started. He was almost ready to let this bird fly on my own. But as he leaned back in his chair and put his feet up on the desk, he looked me squarely in the eye and asked me “Why would any company use your service to ship their products?”. I paused for a second before replying and before I could say anything, U.J. stopped me and said, “You hesitated, and I don't even want to hear your answer at this time. Take a week and come back to me with a good answer”. My answer was going to be that I was going to be professional, on time, and reliable. But thinking back to when I was running the freight desk at a shipper, I thought “Well, that's not a very special reason for anyone to use me, because that's what every trucking company says”. I was still thinking of the question posed to me by U.J. as I arrived home and picked up my mail from the mailbox. The answer came to me as I opened an envelope with a toothpaste sample in it. For many years I had been buying the same brand of toothpaste. I never really thought about it before, but I had been using the same brand of toothpaste that my parents had bought many decades prior. It turns out that this toothpaste sample that I had just received was from the opposing major brand. I decided to give this free trial a chance. I thought to myself, “This is the answer I need to take back to the SBA”. My plan was to use a “special introductory rate” that was good for a prescribed time frame to demonstrate to a shipper the benefits of using my company to transport their products. I also would ask them to give me the shipment going to the consignee which they regularly had trouble with. At the end of this trial period, I would have a better idea of what it took to conduct business with this “troublesome” customer, and they would also have a clear view of what my company was all about. My process would be arriving at the consignee at the scheduled time, typically first thing in the morning. I would walk in with a box of donuts to introduce myself and inform them that I would be delivering to them regularly. As a result, when I started my business, this simple little step, often, led to the consignee requesting the shipper to send me with the next delivery. The key to this whole process was that when it came time to negotiate what the actual freight rate was going to be, I had the upper hand because I had successfully pleased the consignee who in the past was normally complaining about something. I will say that there was much more to the process than this. However, it’s important to have a reason as to why any new prospective customer would want to utilize your services over the carriers who are already servicing their business.

Many professional truck drivers choose to contract their services to carriers and fleets. The 1099-NEC (Non-Employee Compensation) is a tax form which allows the IRS to track any payment given by a company to independent contractors. Are you an owner-operator that needs help with your 2024 taxes? Click here! Where is my Form 1099-NEC? Form 1099-NEC will now be used to report non-employee compensation for tax filing year 2021 and on. Previously Form 1099-MISC was used to report this information. This form must be issued to the IRS and all independent contractors by January 31st of each year. This puts the responsibility on the carrier or fleet to provide the 1099 form to its contractors. Even if you do not receive the 1099, you will still need to report the income on your tax return. Tracking Down Form 1099 If you have trouble tracking down this form from your fleet, there are several things you can do. First, you can give the fleet or carrier a call. Typically, the group that handles your paycheck every week or month will issue your Form 1099. Be sure to track this information down at the beginning of February so you are ready to submit your forms and paperwork to ATBS in order to file on time. Second, you can get older 1099s electronically at www.irs.gov/transcripts . Finally as a last resort, you can estimate your 1099-NEC income. Do so by reviewing your end of year pay stubs issued by your fleet or carrier. A simple amend process is available if you overestimated your income. Remember, the IRS does not like it when you underestimate earnings, and may impose penalties for doing so. ATBS clients have their income reported or downloaded every month so the tax filing process is streamlined. The Tax Organizer walks ATBS clients through the tax process and ensures every owner-operator tax deduction is considered. Notice, If you are a corporation, there is a possibility that you will not receive a 1099-NEC; work with your carrier if that is the case. The IRS exempts corporations from receiving the 1099 form because these entities are already subject to strict state and federal reporting and administrative requirements. Issuing a 1099 Some independent contractors will pay others to help them run their business. If you paid someone more than $600 in 2024, then you will need to file a 1099 for that person, and send a copy of this to the IRS by January 31st. A good bookkeeping practice to adhere to is to file a signed and completed W-9 for each contractor you hire. This provides the information you need for filing Form 1099 with your contractor and the IRS. ATBS clients have a dedicated team of bookkeepers who can properly categorize any payments made to independent contractors. Be sure to work with your ATBS business consultant to successfully file all forms with the IRS and independent contractors in a timely manner. Get Organized Form 1099 is an important element in every independent contractor’s life. Keep an eye out for it in January and ensure that all of your paperwork is organized for your tax preparer in February. ATBS prepares taxes for more than 15,000 professional drivers every year. We help owner-operators keep their money where it belongs -- in their pockets. Give ATBS a call today with all your tax-related questions at 866-920-2827.

Truck parking is one of the most frustrating issues that the trucking industry faces. With roughly 313,000 spots to park nationwide for 3.5 million drivers, it’s no wonder why truck parking is such a problem. Truck drivers will usually park for free at truck stops due to the offered amenities, or at rest stops. However, when they can’t find parking there, they either have to risk their safety and park in a less than desirable area or pay for parking out of pocket. Many drivers, especially those new to the trucking industry, might have a difficult time understanding why the truck parking shortage is such an issue. The reality is that there’s no easy answer. There are many reasons why there’s a shortage of parking spots, including: The ELD Mandate : With HOS (hours of service) being restricted, drivers are now required to park after a specified number of hours, which increases the demand for spots. Closed rest areas: Many of the country’s rest areas need renovations and states often don’t have enough funding to repair or replace them. Shippers not letting trucks park at their dock : Many shippers fear drivers will leave the area worse than they found it, and will then have to clean up afterward. This may be an unfair assumption, but nonetheless, a reality that drivers have to navigate. RVs and cars using truck spots: Sometimes recreational vehicles and passenger cars are directed to take truck parking spots because of their size. Sometimes these motorists just don’t know any better or don’t have anywhere else to park. So, what are some of the long-term solutions to the lack of truck parking? Federal level : In June 2023, two new major federal grants were awarded to expand the nation's commercial truck parking capacity. The two awards , totaling more than $33 million, will create 170 new truck parking spaces located at freight corridors in Louisiana and Texas. State level: According to the American Transportation Research Institute, many local governments aren’t aware of how bad the truck parking problem truly is, so they’ve decided to develop three guidebooks that would help states better manage and improve truck parking facilities. Trucking Associations: In 2022, the American Trucking Associations and the Owner-Operator Independent Drivers Association sent a letter to the U.S. Secretary of Transportation urging that the Infrastructure Investment and Jobs Act funds be prioritized to boost the nation's truck parking. Private sector : Companies like Love’s are opening up more and more truck stops across the nation to create more parking spots, as well as other private companies, like Big Rig Parking, creating paid parking lots so truckers can reserve a spot in advance. While there’s not much any of us can do to immediately solve the parking shortage, there are a few things that you do have control over. Here are some things that you can do to have the best parking experience possible. Parking Etiquette Practicing parking etiquette might seem tedious, but it’s the right thing to do. By being a courteous parker, you’ll make it easier for companies to provide and maintain safe parking for drivers. Follow these tips the next time you park your truck: Be tidy : Take your trash to the trash cans, and don’t leave a mess for a fellow trucker or truckstop/shipping dock employee to deal with. Back your trailer in : Don’t park in the spot headfirst as this eliminates road space for others. Make sure the front of the truck is facing outwards. Check the spot you’re backing into : Before you back into a spot, make sure it’s not already marked as reserved. A poorly marked spot will be harder to see, so double-check it to avoid getting woken up in the middle of the night by an employee asking you to move. Be mindful of other drivers: Avoid making loud noises when parked, we’ve all had a noisy neighbor at some point - don’t be a nuisance to others. Leave no trace : If there’s any grass around the parking spot, don’t drive on it - be respectful of the surrounding land and environment and leave no trace behind. Don’t stay parked in fuel islands : Get your fuel, and get moving. Parking Safety With so few spots available, sometimes parking in a less-than-desirable area is the only choice, so safety must always be your top priority. No one wants to think about a burglary, or worse, but the reality is that you need to be prepared if something does happen. Here are some tips to help keep you safe when you park: Avoid parking on the shoulder. Try to park in areas that are well-lit. Trust your instincts - if something doesn’t feel right in a certain area, leave immediately. Make sure your trailer is locked and secured, and avoid discussing what you’re hauling with anyone to prevent yourself from becoming a target. Invest in a good lock for your trailer, like this one: The Enforcer Lock . Close the curtains, and lock your doors. Strap your doors shut and set up a makeshift alarm system. Consider taking your dog on the road with you. Not only are they wonderful companions, they’re also great at notifying you of an intruder. These furry friends are also a tax deduction ! Be prepared to defend yourself. Keep items like pepper spray or a baseball bat within reach in case someone breaks in. Parking Solutions Free parking is always ideal, however, it’s not always possible to do so in a safe manner. Paid parking is controversial, some drivers like it, while others don’t. However you feel about it, there are tools available that can help you book and reserve spots in advance, if you choose to do so. We’ve listed some free and paid parking resources below that you can take advantage of: Free Parking Solutions Trucker Path helps you find free parking by providing real-time updates, or you can reserve paid parking in advance. Dock411 has a free version of the app that provides information on whether or not shippers allow overnight parking, restrooms, wifi, etc. DAT One also helps you find free parking or reserved parking. Paid Parking Solutions Truck Parking Club : reserve an hourly, daily, weekly, or monthly truck parking space at 1400+ locations across the US. Trucker Tools is a free app that allows you to reserve paid parking in advance. Pilot Flying J will enable you to reserve a parking spot at one of their locations. Truck Smart by TA Petro helps you reserve a paid parking spot at one of their locations up to 30 days in advance. Conclusion While truck parking is a complicated issue that has no easy solution, there are wheels in motion for long-term solutions, and more importantly, there are things that you can do today to enhance your parking experience. Remember to be mindful, try to plan ahead, and use the tools you have at your disposal. Park safely!

Tax season is here which means it’s time to start thinking about filing your 2024 taxes. Before you start, we’re here to make sure you’re up to date on some of the significant changes that have happened over the past year that could affect your tax return . In this article, we’re going to provide you with a list of a few things that have changed and a few things that are carrying over from the previous tax season. Are you an owner-operator that needs help with your 2024 taxes? Click here! Here’s a list of a few IRS updates and recent congressional acts and their tax implications affecting your taxes in 2024 and beyond: IRS Increases the Per Diem Rates for the Transportation Industry The per diem deduction for meals and incidental expenses increased to $80 per full day and $60 per partial day as of October 1st, 2024. The rate for January 1st, 2024 through September 30th, 2024 remains unchanged at $69 per full day and $51.75 per partial day. The IRS allows for an 80% deduction of the above amounts. If you are tracking per diem this means under the new rules the deduction for a full day has increased to $64 and the deduction for a partial day has increased to $48. IMPORTANT NOTICE: You will need to calculate your total Per Diem deduction using the two different Per Diem rates . You need to keep this in mind when you are filing your 2024 taxes. IRS Grants Disaster Relief to Victims of Hurricanes Helene and Milton Taxpayers living in Alabama, Florida, Georgia, North Carolina, South Carolina, and parts of Tennessee and Virginia who filed extensions for their 2023 returns now have until May 1st, 2025 to file. Taxpayers living in the above disaster zones also have until May 1st, 2025 to file their 2024 returns and pay any taxes due. The IRS automatically grants disaster relief to affected taxpayers, if you suffered a loss due to any natural disaster in 2024 ask your tax professional if relief is available to you. The Inflation Reduction Act The Inflation Reduction Act was signed into law on August 16, 2022, and still applies in 2024. To the average self-employed truck driver, this act in many ways will have little to no effect on the way you conduct your business currently. However, it does provide new opportunities for tax savings and things to watch out for over the next 10 years. Climate-Related Tax Credits The Inflation Reduction Act provides roughly $369 billion in incentives for energy and climate-related programs. Many of the incentives will be seen in the form of tax credits. If a trucker or fleet has been on the fence about purchasing electric vehicles, these tax credits could push them to do so. However, does this mean you should go out and purchase an electric vehicle solely for the tax credit? Not necessarily. If you are considering a purchase of an electric tractor be sure to get all the facts first. The act also extended The Residential Clean Energy Credit. As a result, homeowners who install solar panels can still reduce their current year's taxes by up to 30% of the total cost of the system, including installation. If the credit reduces your tax liability to zero, any remaining credit can be carried forward to the next year through 2034. The credit is limited to 26% in 2033 and to 22% in 2034. The tax credit becomes available to taxpayers in the year installation is complete. Health Insurance and Care The Inflation Reduction Act will extend some of the subsidies brought on by the Affordable Care Act. Specifically, it extends the subsidies for health insurance premiums available through the federal marketplace or exchange. These subsidies had been set to expire in 2023 but the Inflation Reduction Act has extended these subsidies through the end of 2025. Owner-operators in need of health insurance can search the Federal Marketplace to see if they qualify for a subsidy. Be careful when applying for a subsidy to make sure your income levels qualify. Additionally, a goal of the Inflation Reduction Act is to lower some healthcare costs overall. As a result, for those covered under Medicare Part D, out-of-pocket drugs will be capped at $2,000 in 2025. More private plans and Affordable Care Act plans also offer a $2,000 cap on prescription drugs in 2025 than in prior years. For our complete Inflation Reduction Act article: Click Here Bonus Depreciation Beginning in 2018, the IRS allowed your business to take an immediate first-year deduction on any asset purchased during the year. This is because any qualified property purchased and placed in service between September 27, 2017, and December 31, 2022, was able to be depreciated by 100% of the cost of the property. In 2023 the bonus depreciation goes down by an additional 20% each year. This means in 2024 bonus depreciation was available at 60% , in 2025 it will be 40%, in 2026 it will be 20%, and in 2027 there will be no bonus depreciation. The cost of the depreciated piece of property will be recognized as an expense and lower your taxable income. Student Loan Interest Deduction Adjusted for Inflation You may be able to deduct up to $2,500 of student loan interest paid. The deduction is subject to income limitations which have gone up for 2024. For joint filers, the deduction begins to phase out with a modified AGI of $165,000 and reduces to zero at $195,000. For single and head of household filers, the phaseout begins at $80,000 and reduces to zero at $95,000. For those married filing separately, the deduction is not allowed. Key Changes for Retirement Income For those in, or approaching, retirement, the age for taking required minimum distributions (RMDs) has increased to 73. RMDs are required for retirement plans like 401(k), 403(b), 457(b), traditional IRAs, SEP, and SIMPLE IRAs. For those who turn 73 in 2024, you must take your first RMD by April 1, 2025, and you must take your second RMD by December 31st, 2025. The penalty for failing to take the RMD has decreased from 50% to 25%, and that penalty is decreased to 10% for timely corrections. 1099-K The 1099-K is likely not going to affect the trucking business per se, but if your spouse has a business or you have a side business you may see one this year. Many platforms such as eBay, Venmo, and Etsy, to name a few, will potentially be issuing these forms. The threshold for issuing 1099-Ks has changed from $20,000 and 200 transactions in 2023 and prior years to $5,000 in 2024 and future years. While the 1099-K should only be issued for business transactions, given the recent change, it is possible you could get one for reimbursing your friend for concert tickets or similar transactions. This can be corrected by contacting the issuer of the 1099-K, or, if all else fails, it can be corrected on the tax return at the time of filing. The bottom line is that being aware of these changes can potentially save you money on your taxes. Many of these changes could be temporary, so make sure you’re taking advantage of them now while they are available. If you have any questions, feel free to give us a call at (866) 920-2827 or email us at info@atbs.com. Taxes for truckers is what we do.

Every year there are changes to tax laws that may go under the radar for some 1099 truck drivers. Not knowing what these changes are may cause people to miss out on significant savings when it comes time to file their taxes . That's why we wanted to provide a few pieces of advice to make sure you aren't making the same common mistakes other owner-operators are making. Are you a self-employed truck driver who needs help with your taxes? Click here! 1. The Standard Deduction increased again, make sure to take it if it’s greater than your Itemized Deduction An estimated 90% of taxpayers use the Standard Deduction. This percentage is not expected to change due to the Standard Deduction increasing to $14,600 for single taxpayers, up from $13,850, $29,200 for married couples filing jointly, up from $27,700, and $21,900 for head of household, up from $20,800. 2. Student Loan Phase-Out Increased You may be able to deduct $2,500 of student loan interest paid. The deduction is subject to income limitations which have gone up for 2024. For joint filers, the deduction begins to phase out with a modified AGI of $165,000 and reduces to zero at $195,000. For single and head of household filers, the phaseout begins at $80,000 and reduces to zero at $95,000. For married filing separately filers, the deduction is not allowed. 3. 1099-K The 1099-K is not likely to affect the trucking business per se, but if your spouse has a business or you have a side business you may see one this year. Many platforms such as eBay, Venmo, Zelle, Etsy, PayPal to name a few, will potentially be issuing these forms. The threshold for issuing 1099-Ks has changed from $20,000 and 200 transactions in 2023 and prior years to $5000 in 2024, $2,500 in 2025, and $600 in 2026 and future years. While the 1099-K should only be issued for business transactions, given the recent change, it is possible you could get one for reimbursing your friend for concert tickets or similar transactions. This can be corrected by contacting the issuer of the 1099-K, or, if all else fails, it can be corrected on the tax return at the time of filing. 4. Key Change for Retirement Income For those in, or approaching, retirement, the age for taking required minimum distributions (RMDs) has increased to 73. RMDs are required for retirement plans like 401(k), 403(b), 457(b), traditional IRAs, SEP, and SIMPLE IRAs. For those who turn 73 in 2024, you must take your first RMD by April 1, 2025. You must also take your 2nd RMD by December 31st, 2025. The penalty for failing to take the RMD has decreased from 50% to 25%, and that penalty is decreased to 10% for timely corrections. 5. Don’t miss out on the QBI Deduction 77% of owner-operators received a QBI Deduction for 2023 because they had a net profit. If a business operates at a loss for the year, a QBI Deduction can't be claimed. The average deduction received was $7,700. As an owner-operator, chances are you will qualify for this deduction, so if you didn't take this deduction last year make sure you look into it this year. 6. Don’t Wait The most important aspect of tax time is paying tax due by April 15th. For self-employed individuals, quarterly tax payments are critical to the process of paying tax in full by April 15th. Paying Estimated taxes throughout the year greatly reduces the chances of being assessed penalties and interest. Extensions can be provided for additional time to file, however, extensions are not available for deadlines to pay your taxes. Organize and send all your tax documents as early as possible to get a head start on filing.

Generally, as a rule, I have made it a habit to track many of my business’s numbers. I do this for several reasons: To benchmark against my peers To identify problem areas and To measure improvements I have made in my operation The fact is that, if you want to change anything, you first must be able to measure it. One of the simplest things is to track fuel consumption on paper. Tracking fuel mileage is something I do, because I remember the figures and notations better when I write them down. I also make little notations, so that if my actions while driving improve my fuel efficiency, I know that it’s a practice that should be continued. By the same token, if I tried something different and the results lowered my efficiency, that information will be used to ensure the practice doesn’t continue. My friend Yunsu Park recently put together an initiative using Geotab telematics to see how my practices during driving influenced the productivity and efficiency of our trucking operation. We’re not only tracking fuel mileage, but also use of time. This is important because it doesn’t matter how efficient an operation is, if it can’t complete the assigned task of delivering the freight to its destination. So far, the only numbers that have been tracked are things that can be controlled such as speed, cruise control usage, and the amount of time the equipment is being utilized. However, using the hours of service to its full extent and planning the time of day to avoid high-density traffic is greatly beneficial. The benefits of avoiding high-density traffic are better fuel efficiency, better use of available operating hours, and reduced exposure to risk. Herein is the information that we have compiled so far. In the future, there will be items that will be added such as precipitation, temperature, wind direction, and percentage of grade change on the road. Tracking your financials to gauge how your business is doing, is also important. With a service like ATBS, you’ll have easier access to know where your numbers stand, identify problems with your operation, and keep your records in good order and up to date.

Everyone wants to have a successful tax filing season and we’re here to help you with the steps to take now to ensure a smooth process. Here are a few simple steps we require to ensure everything moves as smoothly and efficiently as possible. Step 1 - Don’t Delay in Sending in Business Income and Expenses Let ATBS do the heavy lifting on your bookkeeping now before the busy season arrives! We need the full picture of your income and deductions before the tax preparation process can begin. Stay diligent in sending receipts each month and if you need to catch up in sending ATBS your receipts from prior months, now is the time for action. Don’t spend time on things that aren’t necessary. Per diem is a large deduction for self-employed truck drivers. You can save time by not having to send ATBS your E-logs and food receipts because we’ll calculate your per diem deduction based on the number of days you spent on the road. Also, see our ATBS Hub Mobile App for our per diem tracking tool to make per diem tracking even easier. Step 2 - Complete the Annual Tax Questionnaire (Tax Organizer) You’ll want to be prepared to send the below documents submitted to ATBS as soon as possible as the new year rolls over. Some of the below documents won't be available in January but that doesn't stop you from preparing and being ready for when these documents are available. A great first step is to complete and submit the tax organizer that ATBS sends in January. The tax organizer is used to kick off the whole tax process . Without a completed tax organizer, we won’t be able to get things moving. The tax organizer allows us to find every possible deduction to reduce your tax liability and this year we’re simplifying tax season with our new digital Tax Organizer, available exclusively in the ATBS Hub. Tax forms are also important. When your tax forms are available make sure you send a copy to ATBS. Forms such as: W-2 (Wages from employee jobs) 1099’s (Compensation from self-employed activity or other types of compensation) If you do not receive a 1099 look for a similar replacement document that verifies annual revenue such as a year to date (YTD), factoring statement, or other similar statements. 1095-A, 1095-B, or 1095-C (Health Insurance) Bill of Sales for purchased or sold pieces of equipment A copy of your prior-year tax return if ATBS did not file the return If you need help or have questions, please give us a call. Each year, incomplete tax organizers result in a significant slow-down in the tax return process. The sooner we receive your completed tax organizer, the sooner we can begin your tax return. Step 3 - Make Sure You’ve Paid in Full for Services Before we can get started on the tax preparation process, make sure you’ve paid your ATBS service fees in full. If you didn’t have one of our Rumblestrip full-service packages for twelve full months and you haven’t yet made the accounting completion fee payment, then it’s likely that you have outstanding tax service fees. If you are unsure about your current balance or would like to discuss payment options, please call us at 866-920-2827. Step 4 - Be Available We often have follow-up questions as we work through specific tax situations for clients. One of the most important things we ask of our clients is that you’re available to promptly respond to emails and voicemails from ATBS employees. The number one reason why the tax process is delayed is because we are unable to reach a client for answers to critical questions we need to complete their tax return. The sooner we can get things answered, the sooner we can move you along in the tax preparation process. Bonus Tip - Pay Your Quarterly Tax Estimates The purpose of filing a tax return is to report tax liability due to the IRS or file a claim for a refund. The IRS can’t assess penalties and interest if you don’t have a balance due. One of the top reasons that businesses fail is tax debt. To prepare and get ahead of any surprises you want to make all of your quarterly estimated tax payments throughout the year. Doing so will help you avoid penalties and interest from the IRS. ATBS is here to help take the burden and stress off your shoulders. Give us a call at 866-920-2827 and let one of our experienced tax professionals help you prepare your tax return.

As an owner-operator truck driver, your tax situation is unique. You file and pay taxes like a business owner while also being eligible for deductions that are specific to truck drivers. If you’re looking for more information on how to file and pay taxes as an owner-operator truck driver, we’re here to help. Below is a brief overview of how to handle and manage owner-operator taxes. Are you a self-employed truck driver that needs help with your taxes, accounting, or bookkeeping? Click here! Estimated Tax Payments As an independent contractor, the Internal Revenue Service (IRS) requires you to make quarterly estimated tax payments based on your business profits. Your quarterly estimated tax payments include: Self-employment tax: The self-employment tax rate is 15.3%. It consists of Social Security (12.4%) and Medicare (2.9%) taxes. Federal Income Tax and State Income Tax: This is calculated on your tax return. Those who expect to owe at least $1,000 in taxes are required to make quarterly payments of self-employment and income taxes. When you are self-employed the payment of Social Security and Medicare taxes is your responsibility. This is unlike those individuals who are classified as an employee as these taxes would be withheld from a paycheck and paid by an employer. How can you estimate your taxes owed each quarter? There are two common methods for estimating tax: Safe harbor: Slightly simplified, this method is calculated by dividing your prior year's tax liability by four to arrive at the amount to pay for each quarterly tax estimate. Actual estimate: This method is a far more useful method to calculate quarterly tax estimates for those with fluctuating income. This method uses the business’ current year profit each quarter to calculate the amount to pay during each quarter. This ensures that you are keeping current with tax payments during your business’ growth throughout the year and prevents any surprises during tax filing. For new independent contractors, it is recommended to use the actual income method for estimating quarterly taxes. Put time aside on your calendar each quarter to work through tax estimates. Do not wait until the last minute as penalties can apply. Tax Deductions and Credits Lower Tax Liability When it comes time to file your taxes, you can minimize your tax liability by claiming every legal tax deduction and credit available. Understanding and recording all the deductions and credits appropriately will help you avoid penalties, reduce the risk of an audit, and minimize the amount you have to pay in taxes. Tax Deductions A tax deduction occurs when you have a reduction of taxable income, like an expense. The reduction of your taxable income results in less tax due. As an owner-operator truck driver, you have numerous tax deductions for your business including: Your truck payment Fuel Accounting and bookkeeping fees Office supplies Maintenance fees Uniforms Licenses and permits Communication Fees Insurance Any expense that you have record of and is “ordinary and necessary” for your business can be considered tax deductible. For our list of commonly missed owner-operator truck driver tax deductions, check out our Tax Deductions for Truck Drivers List . Tax Credits Tax credits work very differently than tax deductions. Tax credits will reduce your tax liability dollar-for-dollar while tax deductions reduce your taxable income. This means if you owe $5,000 in taxes and receive a $4,000 tax credit, you will only be responsible for paying $1,000 in taxes. A few common examples of tax credits are: Child tax credit Earned income credit Child and dependent care tax credit American opportunity credit Reduce the Risk of Audit on Your Business The IRS is tasked with selecting taxpayers for audit in two ways: The first is if they suspect dishonesty or practices that do not adhere to tax law; the second is a random selection of tax returns for audit to check tax compliance. To reduce the likelihood of a tax audit and reply to a random audit, it is important to claim tax deductions and tax credits for which you have documentation and support. Without supporting documents, the IRS may disallow the deductions or credits and charge interest and penalties. Keep receipts, canceled checks, electronic log books, and other valid proofs of payment documentation for a minimum of three years. Per Diem Per Diem (per day) is one of your largest tax deductions as an owner-operator, but what is it exactly? In its simplest terms, the Per Diem deduction is a tax deduction that the IRS allows to substantiate ordinary and necessary business meal and incidental expenses paid or incurred while traveling away from home. The IRS allows transportation workers, subject to the hours of service regulations that travel for business, to deduct their meal expenses from their income. The per diem rate is set by the IRS. The current rate (as of October 1, 2024) has been increased to $80 per day in the Continental US. You may hear the amount of the deduction quoted as $64. That is because the IRS only allows you to deduct 80% of the Per Diem rate. IMPORTANT NOTICE: The Per Diem rate from January 1, 2024 - September 30, 2024, was $69 per day in the Continental United States. This means you will need to calculate your total Per Diem deduction using two different Per Diem rates. You need to keep this in mind when you are filing your 2024 taxes. If you are an owner-operator, the rule is simple, you get to claim the tax deduction for each day that you are away from your “tax home”. On the days that you depart and the days that you arrive at home, you must claim a partial day allowance instead of a full day allowance. That is ¾ of the standard allowance. To learn more about Per Diem, click here . Depreciation and Section 179 Section 179 doesn’t increase the total amount you can deduct, but it allows you to get your entire depreciation deduction in one year, rather than taking it a little at a time over the term of an asset’s useful life. This is called first-year expensing or Section 179 expensing. (Expensing is an accounting term that means currently deducting a long-term asset.) You qualify for the Section 179 deduction only if you buy long-term, tangible personal property that you use in your business more than 50% of the time. Under Section 179, you can deduct the cost of tangible personal property (new or used) that you buy for your business. There is a limit on the total amount of business property expenses that you can deduct each year under Section 179. The maximum was increased in 2024 to $1,220,000. The phase-out threshold was also increased to $3,050,000. You don’t have to claim the full amount, it’s up to you to decide how much to deduct under Section 179. Whatever amount you don’t claim under Section 179 must be depreciated instead over the life of the asset. The main advantage of Section 179 is it lets you take a higher deduction immediately. By receiving a higher depreciation deduction today, a business will reduce its current tax bill. This deduction is especially helpful for new businesses that may be having cash-flow troubles. Two of the major disadvantages are as your income increases, it will move into a higher tax rate. By accelerating your business's deductions, you will have fewer options in the future to reduce your taxes when your business may be in a higher tax bracket. Another disadvantage of the accelerated method is that it has a greater risk of recaptured depreciation. You may decide to sell a long-term asset before it is considered worthless according to its depreciation schedule. Proper planning can help you make the best possible decision on depreciation. Additional Taxes Employee Tax Do you have employees working for your business? If so, you must collect taxes on behalf of your employees including: Social Security Medicare Federal and state income tax The amount of taxes to withhold from each employee’s wages starts with a calculation that begins with the employee’s Form W-4. The Form W-4 is prepared by the employee and provided to the employer. The taxes calculated and withheld from an employee’s paycheck must be sent to the federal and state government based on their specific rules. Excise Tax Excise tax is considered an indirect form of taxation because the government does not directly apply the tax during the income tax filing process. An intermediary, either the producer or merchant, is charged and then must pay the tax to the government. Excise tax can apply to businesses in a variety of ways based on your industry, the product or service you provide, and where you operate your business. A couple of common excise taxes that apply to trucking are: Form 2290 Federal Highway Use Tax (FHUT) Diesel Fuel Tires Purchases made on specific types of consumables or goods (such as fuel) and certain activities (such as a truck using a highway) are subject to excise taxes. Franchise Tax Franchise taxes are paid by certain entities (corporations, partnerships, and limited liability companies) that do business in certain states. These may be considered “privilege” taxes as they allow a business the right to operate in a certain state or locality. Property Tax Property taxes are due if you own property or real estate and it must be paid to the local government. Gross Receipts Tax Gross receipts taxes are imposed by some states on businesses instead of a state income tax. In these states, gross receipts (revenues) of the business are taxed. Some states allow deductions for gross receipts tax and some states exempt certain types of businesses. ATBS can help you determine if you are responsible for this tax and if a deduction is applicable. Common Tax Questions Q: How much should I set aside for business taxes? A: It is recommended to set aside 25-28% of your weekly net income for quarterly taxes. Q: I cannot get my taxes done on time. What should I do? A: If you can’t get your taxes done in time, file a one-time 6 month extension. However please keep in mind, It is an extension to file not an extension to pay. Q: Will I receive a tax refund? A: This is very dependent on your individual situation, however, it’s not likely if you are an owner-operator. You should work hard to being owed as little as possible. Remember, if you are getting a refund, you have given the government an interest free loan. Q: Will my tax preparer send me my 1099-NEC form? A: No, your carrier will send you your 1099-NEC form. Q: I did not pay my quarterly tax estimates this year. What is going to happen? A: The IRS will charge underpayment penalties and interest for the tax not paid. For more common tax questions that we’ve answered, click here . Lease vs. Purchase If you’re leasing your truck, you can deduct each month’s payment from your taxes. This means if you purchased your truck, you’ll typically see a higher deduction in the first two years due to depreciation. However, because of the depreciation schedule, by the fourth year, you’ll have very little depreciation left. That means the driver who is leasing their truck will see a tax benefit compared to the driver who purchased. Additionally, the driver who purchased their truck will see a tax delay. This is because the tax will still have to be paid in later years, as it’s not eliminated by depreciation. Preparing and Filing Taxes Who is currently preparing and filing the taxes for your business? A non-specialized provider? A family member or yourself? A local accountant? If you are using any of the options above, you may be paying more tax than you need to. Continuously changing tax laws make it hard for any business owner to understand and accurately file and pay taxes. Filing accurately and maximizing deductions to reduce the tax burden starts with choosing a specialized business provider for your industry. Using ATBS to prepare your federal, state, and local taxes can translate to an easy and seamless tax preparation process. With ATBS, there are just three easy steps to file your taxes: Send ATBS all your business receipts Complete our tax organizer Be available for follow-up questions ATBS will take this information and make sure you receive every tax deduction you deserve while remaining in compliance with the IRS. We give each return personalized attention, including an extensive review process by a tax professional, to make sure it’s done right. Throughout the year, we’ll also provide you with your tax estimate amounts so you know how much to pay. Tax estimates are calculated on “actual profit” and can be accessed on a secure online portal anytime, anywhere. At ATBS, we have helped more than 150,000 owner-operators over the past 20 years run a better business. We offer a variety of services including bookkeeping, accounting, and tax preparation, which will provide you with the best outcome when filing your tax return. We also offer unlimited business consulting for our RumbleStrip Professional clients. A dedicated business consultant will help you keep your business “between the lines” just like rumblestrips on the highway keep your truck between the lines. If you’d like to learn more about ATBS services or want to get started today, give us a call at 866-920-2827 .

Section 179 doesn’t increase the total amount you can deduct, but it allows you to get your entire depreciation deduction in one year, rather than taking it a little at a time over the term of an asset’s useful life. This is called first-year expensing or Section 179 expensing. (Expensing is an accounting term that means currently deducting a long-term asset.) Example In 2024, Bill buys a $25,000 van for his delivery business. Under the regular depreciation rules, Bill would have to deduct a portion of the cost each year over its five-year useful life. By deducting the van under Section 179, Bill can deduct the entire $25,000 expense from his income taxes in 2024. So he gets a $25,000 deduction in 2024 under Section 179, instead of the normal deduction he would get using regular depreciation methods. The maximum Section 179 deduction in 2024 for vehicles 6,000-14,000 pounds is $30,500. What Property Qualifies You qualify for the Section 179 deduction only if you buy long-term, tangible personal property that you use in your business more than 50% of the time. Under Section 179, you can deduct the cost of tangible personal property (new or used) that you buy for your business. Examples of tangible personal property include computers, business equipment and machinery, cell phones, etc. Property Used Primarily (51%) for Business To deduct the cost of property under Section 179, you must use the property primarily for your business. The deduction is not available for property you use solely for personal purposes or to manage investments or otherwise produce non-business income. You can take a Section 179 deduction for property you use for both personal and business purposes, as long as you use it for business more than half of the time. The amount of your deduction is reduced by the percentage of your personal use. You’ll need to keep records showing your business use of the property. If you use an item for business less than half the time, you will have to use regular depreciation instead and deduct the cost of the item over several years. Another limitation regarding the business use of property is that you must use the property over half the time for business in the year in which you buy it. You can’t convert property you previously used for personal use to business use and claim a Section 179 deduction for the cost. Annual Deduction Limit There is a limit on the total amount of business property expenses that you can deduct each year under Section 179. The maximum in 2024 is $1,220,000 with a phase out threshold beginning at $3,050,000. Once you're above $4,270,000, no Section 179 deduction is allowed. You don’t have to claim the full amount, it’s up to you to decide how much to deduct under Section 179. Whatever amount you don’t claim under Section 179 must be depreciated instead over the life of the asset. Advantages and Disadvantages of Taking Section 179 The main advantage of Section 179 is it lets you take a higher deduction immediately. By receiving a higher depreciation deduction today, a business will reduce its current tax bill. This deduction is especially helpful for new businesses that may be having cash-flow troubles. Section 179 lets businesses maximize deductions today and avoid delaying deductions to the future when the business may no longer exist. Two of the major disadvantages are as your income increases, it will move into a higher tax rate. By accelerating your business's deductions, you will have fewer options in the future to reduce your taxes when your business may be in a higher tax bracket. Another disadvantage of the accelerated method is that it has a greater risk of recaptured depreciation. You may decide to sell a long-term asset before it is considered worthless according to its depreciation schedule. If you sell the asset for more than its current accounting value, your profit will be considered recaptured depreciation. The IRS will take back your depreciation deductions as the asset did not lose as much value as planned. Your recaptured depreciation profits will be taxed as income. Accelerated depreciation systems have a higher cost of recaptured depreciation because they recognize more depreciation upfront. Proper planning can help you make the best possible decision on depreciation. Call your business service provider today to discuss your current situation and your future business plans in order to make a sound decision on depreciating your business assets.

If you’re an owner-operator truck driver, paying quarterly taxes can be a big change from the days when taxes were withheld from your paycheck as a W2 company driver . In fact, unpaid taxes is one of the leading causes of businesses failing. For this reason, it’s important to be diligent about how much money you set aside throughout the year for taxes. How much should you set aside for quarterly tax payments? Typically, January through March are often the slowest months of the year for freight cycles. This means that having a big tax payment due at the end of March can be a huge burden. Therefore, ATBS recommends that drivers set aside between 25 and 30 percent of their weekly net income for quarterly taxes. That way you aren’t caught off guard when you have to pay your quarterly taxes after a slow month. Let’s quickly break down where this 25-30% comes from. Many individuals will fall into the 10-12% income tax bracket. However, self-employed individuals will also need to set aside taxes for self-employment tax (Social Security and Medicare also known as FICA). Self-employment tax is roughly calculated as 15.3% of your business net income. So when you take 12% income tax, plus 15.3% self-employment tax, plus your state income tax, you get approximately 25-30%. ATBS recommends that you create an organizational system for setting aside money for tax payments throughout the year. At the beginning of the year, get all of your paperwork, tax documents, and finances in order to start the year off right. Then, set up an automated system for money to be transferred every week or every month into an account specifically for quarterly tax payments. It may seem like a big change at first, but setting aside money with each paycheck can quickly become part of your routine. Why is it important to pay your quarterly taxes? If you fail to pay your quarterly estimated taxes, you may be charged a late payment penalty. If you also fail to timely file your tax return , that’s another penalty tacked onto what you owe. Additionally, the IRS can apply their current interest rate of six percent to your balance due after all the penalties have been added on. All of this can add up quickly and put you and your business in a financial hole. This is why failing to pay your taxes accurately and on time is one of the leading causes for a business to fail. How much do you pay? It is recommended that owner-operators estimate taxes based on actual income since their income can vary significantly each month. Calculating and paying estimated tax payments based on your actual business income will help you avoid overpayment or underpayment of your taxes due. If you can't pay your entire estimated tax payment all at once, ensure you are at least paying what you can afford. For example, the IRS uses a safe harbor calculation to calculate a minimum quarterly tax payment due to avoid penalties. For simplicity, the safe harbor estimate is your tax liability from last year divided by four equal payments. Each quarter you would pay in one installment of the minimum amount. While this method may leave you with either an underpayment or overpayment come tax filing time, at least you won’t be penalized for not paying your quarterly estimated tax payments at all. How do you pay your quarterly taxes? You can pay your federal quarterly tax estimates online at www.irs.gov/payments or even on the IRS mobile app, IRS2go . ATBS recommends paying directly from your bank account as there is no fee. You will owe a percentage fee if you decide to pay with your credit card. Many states also allow you to make tax payments online. Each state may be a little different, so we recommend visiting your state’s Department of Revenue website to see how you can make a tax payment online. You also have the option of applying the tax refund you receive after filing your taxes to the quarterly taxes that will be due in the future. Many owner-operators want their refund right away, but this could be a good way of getting a head start on your upcoming estimated tax payments. So, should you pay your taxes quarterly? Technically you have the right to wait and pay your taxes once a year, but is it really worth it? When it comes to taxes, you should be taking small steps towards doing it right rather than handing over more of your hard-earned money by doing it incorrectly. If you have any questions about paying estimated taxes, call ATBS at 888-640-4829. One of our business consultants or tax professionals would be more than happy to assist you. Not an ATBS client? Give us a call at 866-920-2827 to enroll in our services!