• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Sozo Fire

A Hot Spot of Knowledge

  • Home
  • Topics
    • Business
    • Construction
    • Family
    • Health
    • Swimming Pools
    • Technology
  • Ask a Question
  • Contact Us

Top 5 Tax Mistakes that Trucking Business Owners Make

April 2, 2012 By Sozo Staff

It’s common for businesses owners to look at taxes as a quarterly or annual obligation. But the most successful entrepreneurs know that taxes should be in the back of an owner’s mind all year-round, not just before deadlines – especially in an industry as complex as the trucking business. Avoiding some of the most widespread tax mistakes can help business owners maximize deductions and minimize audit risk, make important business decisions, and even enhance trucking company valuation.

Poor Record-Keeping

Sloppy record-keeping is the most common tax mistake by businesses of all sizes, according to the Internal Revenue Service. Owners will often make a purchase on a personal credit card, make a note on a napkin to record the transaction later, and promptly forget all about it. Sound familiar? Failure to track and report money going in and out can deprive owners of the ability to take important business deductions and put companies at elevated risk for costly and time-consuming audits. Remember, the IRS is looking for real numbers, not estimates. Not surprisingly, poor bookkeeping is one of the No. 1 turnoffs for buyers. If you don’t understand the value of a business, how can you expect a buyer to understand it?

Misclassifying Workers

Pop quiz: Are your workers independent contractors or employees? It sounds like a straightforward question, yet thousands of transportation companies improperly classify drivers and other workers on their taxes. If you’re listing your contractors as employees, you’re putting yourself subject to unnecessary payroll taxes. Contrarily, if you’re classifying real employees as contractors in order to avoid withholding and paying FICA taxes, you’re putting the company at risk for hefty fines and penalties. If you’re truly not sure, filling out a Form W-8, or consulting with a tax professional who understands the trucking business, can set things straight.

Getting Excited About a Tax Refund

Everyone likes getting a check in the mail. But if you’re a small business owner and that fat check is from the IRS, it’s a sign you need to reevaluate your tax situation. If you’re self-employed and paying quarterly taxes, receiving money back means you’re overpaying – in other words, you’re giving a free loan to the government. You’d be better off keeping those dollars invested in your company. If you’re having a hard time gauging how much to pay, a tax professional can help.

Mixing Business and Personal

Business owners sometimes commingle business and personal accounts, writing business checks for personal reasons or withdrawing from a business account to cover a personal expense. Mixing funds makes it difficult or impossible to track income and expenses, affecting your ability to make deductions and to attract potential buyers should you decide to put your trucking business for sale. It’s also a surefire invite for IRS scrutiny. Do yourself a favor and keep a clear separation between business and personal accounts.

Not Seeking an Industry Professional

The trucking industry is one of the most complicated and highly-regulated sectors in the market. General business accountants are even less likely to understand the business than a truck business owner. Whether it’s identifying trucking-related deductions or correctly classifying employees, a tax specialist familiar with transportation businesses is often your best bet. Properly prepared taxes increase deductions, minimize mistakes and penalties, and put a company in an ideal position for the future – whether the plan is to seek financing or put up your truck business for sale.

Filed Under: Transportation

Additional Articles

Selling a Business: How to Package Your Business for Sale
Is Your Business Ready to Grow?


Primary Sidebar

Lyon Financial

Popular Posts

  • Berg Furniture Children’s Furniture Lines: Options and Space Savings, Galore
  • Dream Furniture for Your Child, Part 2
  • Tropical Decking and Ipe Alternatives
  • Dream Furniture for Your Child, Part 1
  • Benefits of Going on a Mission Trip
  • Why Walnut Gets Special Treatment, Part 2
  • Business Flash Drives
  • Septic System Pumping in the Charlotte, NC Area
  • Custom Wire Oven Racks by Three M Tool for Bakeries
X10 Home Automation

Recent Posts

  • Setting Up Your X10 System: Beginner’s Guide to Home Automation
  • Options for Home Automation: What Makes X10 Different?
  • Benefits of Aquatic Exercises, Part 2
  • Benefits of Aquatic Exercises, Part 1
  • Black Algae in Your Pool? Here’s What to Do, Part 2
  • Black Algae in Your Pool? Here’s What to Do, Part 1
  • How the X10 HUB Advances Already Incredible Technology
  • What Makes X10 Home Security Systems Unique
  • Should You Think About a Pool & Hot Tub Combination?
  • Drowning Prevention in Swimming Pools
Lyon Financial

Recent Comments

  • Alice Carroll on Pool Choices: Pool Fences
  • Zachary Tomlinson on Swimming Pool Cover Advantages
  • Hannah on X10 GSM Home Security Systems
  • Michael Cobb on X10 GSM Home Security Systems

Copyright © 2023 Sozo Firm Inc · Privacy Policy · Disclaimer · Sitemap