As you close the books on 2014, now’s a great time to take stock of what worked, what didn’t, and what you can do to for more successful 2015. But as you go through your tax season checklist, you've got at least one new box to check off, namely the Affordable Care Act – aka ObamaCare.
Even without that new wrinkle, filing fuel taxes and federal income taxes every quarter (and any taxes you have to file to the state in which your business is based) can be intimidating. Plus, you have to maintain all the records that back up your numbers. The best way to make sure you’re filing everything the right way (and not paying more than you have to) is to meet with a CPA.
To prep for that meeting, here are some questions you'll want to make sure get answered.
Am I covered for ObamaCare?
Starting this year, companies with 50 or more full-time employees are required to offer health insurance to their workers or pay a penalty. Small businesses are mostly exempt, so ask if your company qualifies for that exemption. Small carriers that have fewer than 25 employees and offer health insurance benefits may also qualify for tax credits. Those companies can also use the Small Business Health Options Program (SHOP) to get lower costs on group plans and claim tax incentives. SHOP is open to businesses with fewer than 50 full-time employees, and next year it will open to businesses with up to 100 full-time workers.
The healthcare law also includes an individual mandate, which means that if you don’t have health insurance, you could pay a fee for every full month you’re uninsured. If you’re a self-employed owner-operator or don’t otherwise get coverage through an employer, you can purchase a health plan and apply for discounts on healthcare.gov, or you can use the site to apply for one of about 20 different exemptions. Open enrollment ends Feb. 15.
What do I need to file for IFTA?
Interstate carriers operating in any state (except for Alaska and Hawaii) or any of Canada’s 10 provinces are required to file an IFTA return four times a year.
The tax applies to any vehicle that a) regularly crosses state lines for commerce and b) weighs more than 26,000 pounds or has three or more axles. Any vehicle meeting that description is required to display an IFTA decal that expires on Jan. 1. If you haven’t already renewed yours, the grace period lasts through the end of February. After that, you could get fined.
Filing improperly could also lead to fines. You’ll need detailed mileage and fuel records, which includes saving all fuel receipts (or tickets for bulk fuel purchases), odometer readings, dates, and miles/kilometers for the state or province you traveled through. You also have to keep these records for four years. If you send them to us, Getloaded can take care of your IFTA returns and save you some headaches.
How should I organize my company?
Are you better off as a sole proprietor or as a partnership, or would you save money if you filed as an S or C corporation or LLC? There are pros and cons to each, but changing the way your company is organized might be one way to cut your tax bill.
Regardless of how your company is organized, you should get an Employer Identification Number from the IRS, as you’ll often need one to do business with banks and other companies.
What can I write off?
Any business expenses deemed “ordinary and necessary” can be deducted on your income taxes. Some of that is pretty straightforward: buying equipment, paying employees, etc. Expenses like the depreciation of a truck are a little less obvious. There are multiple ways to account for depreciation, so you’ll need to decide with your CPA which way best suits your business.
Will I survive an audit?
|FEDERAL INCOME TAX
|Jan. 1 to March 31
|April 1 to May 31
|June 1 to Aug. 31
|Sept. 1 to Dec. 31
The reason you’re asking all these other questions is to avoid ever getting to this point, not just because an audit could result in fines, but because it costs you time that would be better spent hauling freight. The first step to avoiding an audit is to pay on time: Be sure you know the federal income tax deadlines and have your employment taxes scheduled to deposit either monthly or semi-weekly.
The next step is to have thorough records, but instead of investing even more time into paperwork, invest in a trucking management system like GetloadedOps, which gives you an all-in-one tool for your operations and easy access to the records you need come tax season.