Published on March 7, 2014
HOW TO PAY LESS TAXES Owner-operators will discover important deductions and commonly overlooked expenses that can lower liability.
WELCOME Todd Amen President & CEO of ATBS ATBSshow.com | teamrunsmart.com
ATBS Trusted Tax & Accounting Experts for Independent Contractors • Prepare more than 14,000 tax returns/year • Consult with owner-operators year-round ATBSshow.com | teamrunsmart.com
INTRODUCTION Are you handing over too much money to the IRS? Almost all owner-operators can significantly reduce the amount of money they hand over to the IRS every year. ATBSshow.com | teamrunsmart.com
AGENDA • • • • • • Your Tax Liability Mis-understood Deductions Must-Have Tax Credits Successful Bookkeeping Successful Tax Strategies Conclusion & Questions ATBSshow.com | teamrunsmart.com
WHAT TAXES ARE YOU SUBJECT TO? • Income taxes – Fed and State • Employment taxes – SE taxes if IC • • • Social Security Medicare FUTA & SUTA • Sales & Excise Taxes • Property Taxes • Fuel Taxes ATBSshow.com | teamrunsmart.com
HOW ARE THE TAXES REPORTED AND PAID? • Income taxes – Fed and State (W2 or 1099) • Employment taxes – SE taxes if IC (1040) • • • Social Security Medicare FUTA & SUTA • Sales & Excise Taxes • Property Taxes • Fuel Taxes ATBSshow.com | teamrunsmart.com
QUARTERLY TAX ESTIMATES Set aside 25-28% of your weekly net income for quarterly taxes. Quarterly payments include: • Self-employment tax • Federal income tax • State income tax ATBSshow.com | teamrunsmart.com
ESTIMATING QUARTERLY TAXES • Safe harbor - divide prior year tax liability by four to calculate the quarterly tax estimate. • Actual income - useful for those with a fluctuating income. Calculate your quarterly income and pay based on this amount. ATBSshow.com | teamrunsmart.com
EMPLOYEE TAXES Do you have employees for your business? Collect taxes on their behalf including: • Social security • Medicare • Federal and state income tax ATBSshow.com | teamrunsmart.com
TAX CALENDAR Put time on your calendar each quarter to pay tax estimates. • Do not wait until April 15th - penalties can apply • Download the ATBS tax calendar at www.atbsshow.com/2014taxcalendar ATBSshow.com | teamrunsmart.com
COMMON TAX DEDUCTIONS • • • • Minimize tax liability by claiming every legal deduction and credit available: Truck Lease or Depreciation & Interest Fuel, Maintenance, & Insurance Costs Any expense incurred in normal course of business Download a list of tax deductible items www.atbsshow.com/tax-and-tax-resolution ATBSshow.com | teamrunsmart.com
OFTEN MIS-UNDERSTOOD TAX DEDUCTIONS • • • • Home Office Out Of Route Miles Guard Dog Personal vehicle miles – 56 Cents/mile if used for business purposes • Medical Expenses • Per Diem ATBSshow.com | teamrunsmart.com
OFTEN MIS-UNDERSTOOD TAX DEDUCTIONS Per Diem • For meals on the days you are working away from home. The current rate is 80% of $59/day. • Partial Day Per Diem is 75% • E-log records to count Per Diem days – these can be used ONLY if you have the full year of e-log records • Download the FREE 2014 ATBS Per Diem Tracking Calendar www.atbsshow.com/freeowneroperatortools ATBSshow.com | teamrunsmart.com
MUST HAVE TAX CREDITS Tax credits can make a significant impact on your bottom line: • American opportunity credit - can reduce tax liability up to $2,500 for each child in college • Earned income tax credit (EITC) - supplements wages for low-to-moderate income workers • Child-care and dependent tax credit - a child must be less than 13 years old or a disabled dependent ATBSshow.com | teamrunsmart.com
SUCCESSFUL BOOKKEEPING Bookkeeping is Important for adhering to tax deadlines and employing successful tax filing. Records should include all financial transactions • Track Revenue – helps determine profit and taxes due • Record and calculate expenses - save all business receipts and record business expenses regularly ATBSshow.com | teamrunsmart.com
SUCCESSFUL BOOKKEEPING • Know your profit - determines tax liability. (Gross income - allowable business expenses = net profit) • Know the IRS statute of limitations - the IRS usually grants three years to challenge a deduction or income on your return. ATBS recommends saving bookkeeping records for 5-6 years ATBSshow.com | teamrunsmart.com
TRACK BUSINESS PROGRESS • Business goals are set when preparing a profit plan (a.k.a. budget) • A P&L Statement can be used to compare goals to actual performance ATBS prepares monthly P&L as well as state and federal taxes - which translates to an easy and seamless tax preparation process. ATBSshow.com | teamrunsmart.com
AUDIT PROOF YOUR BUSINESS Tax deductions are only allowed if documentation can be provided to support the claims on the return. Keep receipts, cancelled checks, log books, and other valid proof of payments for a minimum of three years. ATBSshow.com | teamrunsmart.com
SUCCESSFUL TAX STRATEGIES Employee Family Members • Retirement contribution deduction • Travel expenses • Child wages deduction ATBSshow.com | teamrunsmart.com
CHOOSING A BUSINESS STRUCTURE Setting up a business structure could result in significant tax savings. Here are the options: • Sole Proprietor • Partnership • C Corp. or S Corp. • LLC or LLP ATBS recommends setting up an LLC and filing taxes as an S Corp. ATBSshow.com | teamrunsmart.com
CONCLUSION Paying Less Taxes Starts with You! • Tax burden can make or break your business. Good planning and record keeping can help reduce tax liability. • With the help of a tax professional you will be able to lower your tax liability and meet business goals. ATBSshow.com | teamrunsmart.com
RESOURCES Ready to start your 2013 Tax Return? • Download the Free 2013 ATBS Tax Organizer www.ATBSshow.com/2013TO • Send tax documents to ATBS by March 7th • If you cannot get your taxes done on time, ATBS can file an extension for you ATBSshow.com | teamrunsmart.com
PENALTIES • Not filing penalty – 5% per month • Filing but not paying penalty - .5% per month ATBSshow.com | teamrunsmart.com
RESOURCES Thank You! Call ATBS at 866-920-2827 or go to www.ATBSshow.com for more information. Team Run Smart members (www.teamrunsmart.com) receive a 5% discount on ATBS Services. ATBSshow.com | teamrunsmart.com
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