Your most important plan is not how you’ll purchase your next tractor or trailer, or house, or investments. It’s your income tax plan. Yet most truckers spend more time planning the next two days off than learning how to get their taxes under control.
 
The words “tax planning” have become associated with the wealthy but certainly not for truckers, right? Wrong! If you pay taxes, you need tax planning. If you only visit your tax advisor in April to get your taxes prepared, what can he really do for you? Once the tax year has closed, you can’t spend or shuffle money around then for tax advantages. Tax preparation is the final step in a quality tax plan; tax planning is how you reduce the amount you pay.
 
You should have both a short-term (12 months) and a long-term (3-5 years) plan developed by a professional tax planner. A superior tax advisor will save you much more than his fee - which of course is tax deductible.
 
There is a difference between a ‘tax preparer’ and a ‘tax advisor’ or expert:
·         A ‘tax preparer’ receives payment for professionally preparing income tax returns. Anyone can become a ‘tax preparer’ by taking a course and passing a test. This type of ‘tax preparer’ is not qualified to interpret the tax code.
 
·         There are three types of professional tax advisors: CPAs, Enrolled Agents, and Tax Attorneys. As a professional trucker, it's very important for you to locate an expert in trucking business tax issues and regulations. 
 
What to look for in a sharp Tax Expert:

1. Experience—How long has he worked with truckers? What’s his background in accounting and taxes?
2. Full–Time—Does he have a 12-month practice? You need advice all year from the person who’s going to prepare your tax returns.
3. Audit Experience—How often does he represent a client before the IRS, and does he back up the returns he’s prepared? When was the last audit in which he represented a client?
4. Creativity—Does he understand the tax code so he can push the envelope, but not create a tax penalty risk for his clients?
5. Aggressiveness—Is he willing to argue his interpretations of the tax code before an Auditor?
6. Continuing Education—Does he take several hours of tax-code classes annually to be sure he understand all changes made that year?
7. Stability—Where is he working from? How many clients does he have? How many long-term clients are truckers? Does he have a Dunn and Bradstreet® rating?

 
It’s not just the letters that follow a tax advisor’s name that qualify him to be your tax expert; it’s his knowledge of the trucking industry and how it relates to the tax code. Finally, you can have the most qualified trucking tax expert in the country; but unless you provide him with complete expense and income records, no talent, knowledge and skill can produce the results you need.
 
Bottom line: If you haven’t sat down and gone over your tax plan with your tax expert, or worse, you don’t have a tax expert, remember after December 31, it’ll be too late to do any changes which can reduce your tax bite for this year. So what’s your tax plan?
 
 
Join Brady in the Trucking Business Community at TruckersU.com www.truckersu.com.  It’s where you can achieve business and financial success. Be a part of the solution.
 
Timothy D. Brady is
·          A 20 + year trucking veteran.
·         The Trucking Business Expert on Sirius Road Dog Trucking Radio.
·         Heard in podcasts on http://AmericanRigRadio.com
·         Author of best-selling trucking business books; business editor and columnist for top trucking industry publications.
 
Contact him at www.truckersu.com or call (731) 749-8567.