Yeah well, now that you put it like that... :lol:

But, at least it makes what she was saying sound more plausible. When I ran it past her, I was thinking, 'you mean I actually come out ahead by staying in motels!? She really was encouraging me, "don't be afraid to stay in motels..." Could it be...nah,...she was wrong, right?

 

If you make money you pay. There are ways to make all your medical insurance and medical bills deductible, even if it comes from your wife's employer.It helps lower the self employment tax.
Ask about irs section 105.

if you pay no taxes, you ain't making money.

 

I think what she was saying is that if you spend $50 on a motel you get roughly a $90 write-off...$50+$40 per diem. That is correct. However, you're getting the per diem anyway, so you certainly don't come out ahead on the deal. There is no magic write-off that allows you to save more money than you spent. The guys that claim to pay minimal taxes are doing so one of two ways; cheating on their taxes or not making any money. In most cases it's the latter. They just don't know enough about accounting or their own business to realize what's really going on.

 

Depreciating large assets = minimal taxes. Beyond that, you are correct.

 

Again, I appreciate the reassurances that (not lying) + (making money) = paying taxes. I don't want either the legal or the moral problems of fraud.

the tweakers, though:

mileage of your personal vehicle in support of your trucking business
home office
mortgage interest
a large asset that depreciates more than it de-values (is that possible?
something else?

I'm just trying to think about what I'm losing out on. Everyone has to do paperwork and taxes, not everyone is going to get a home office deduction.

 

All valid write offs, assuming that you actually have them and use them. I'm sure many who take the first two deductions don't actually have those expenses.

Sure - anyone who owns a truck has one of those. The depreciation takes the entire amount you paid for the vehicle, but the vehicle doesn't devalue down to zero. That's why when you sell the vehicle, you have to pay capital gains tax on it.

 

You can't depreciate out more than you paid for something. You're simply recouping your costs...and not dollar for dollar. Only at your marginal tax rate. The one caveat is if you are able to sell the depreciated asset for significantly more than its residual value. In which case you owe capital gains taxes which will negate most of your excess depreciation.

You might make a little on the vehicle expense depending on what the operating costs of your vehicle are. It's likely to be pretty negligible.

Home office expense can be found money. Just remember that it's probably the single biggest red flag for the IRS when it comes to the self-employed. It also has ramifications down the road when you sell your home in terms of the capital gains benefit.

 

Talked to my tax preparer today. She said I COULD have written off 54cpm for vehicle usage if my last tax preparer hadn't depreciated my truck. Guys, that's maybe $54,000 per year on a truck I original bought for $24,000. :shock: She said that's what postal carriers do, and they end up getting their vehicles for free.

PM if you want her number. 8)

 

FIRE THIS TAX PREPARER. You can only depreciate a vehicle for what you paid for it. You can not write off "vehicle usage" on a CMV. If you do so, then you cannot claim other expenses for that vehicle (like fuel, repairs, etc.). That would be double dipping, and would get you in a boatload of trouble. A truck gets depreciated, plain and simple.

This person sounds like she has no clue as to how a trucking business works.

 

Of course, but for those years that you are depreciating, you have the ability to pay minimal taxes. Once that depreciation is complete, however, the gravy train has left the building.

Rev; sees no other alternative than to buy a brand new truck every 3 years, and throw the old one away. :wink: