Fleet Taxable Benefits

While operating a fleet of vehicles, you are already habitual of paying a lot of taxes. Therefore it is crucial to understand each and every fleet taxable benefit you can get. Understanding the tax benefits and liabilities are equally important for the fleet operators and the employees.

As a fleet operator, if you don’t follow the rules and regulations of the IRS, you might end up paying too much in taxes and penalties while ending up losing your taxable benefits.

Simultaneously, your employees are also required to pay taxes for their income. If they receive the payment in form of cash or any other way of compensation, they might end up paying less taxes. This will impact the benefits they enjoy from the government, because they need to pay a certain amount of tax to enjoy all the benefits offered by the government. Most of the time employees are less aware of the tax implications, therefore it is the employer’s job to educate them about their tax benefits and liabilities.

So what kind of benefits are there for the fleet operator and the employees of the company?

Vehicle Loan Tax Benefits

It is of your best interest to get your vehicle financed when the tax benefits are concerned. Loaned vehicles are exempted from the taxes. Therefore, you don’t need to spend your precious revenue on purchasing a vehicle by paying full from your pocket.

Fuel Benefit Tax

Most of the time the fleet companies provide many benefits to their employees and fuel allowance is one of them as long as they provide them the proper log of the miles driven for official work and the receipts of the fuel purchased by them. Every employee enjoys these fuel allowances with the help of an ifta tax calculator but very few are aware of the tax benefits of the fuel allowance.

Situation 1 : Vehicle is used exclusively for official purposes

In this situation there are no tax liabilities, irrespective of who is the owner of the vehicle. To keep this without tax liabilities, the employer needs to maintain the proper records and details of the trip taken by the employee for official purposes. Employers also have to provide a certificate that the vehicle is solely used for official purposes.

Situation 2 : Vehicle is used for personal purposes.

In this situation, fuel expense, vehicle maintenance charges and the driver’s salary are fully taxable irrespective of who owns the vehicle.

Situation 3 : Vehicle is used for both personal and official purposes and is owned by the company.

If the vehicle’s expenses are solely paid by the employee then he has to pay a flat amount of tax to the IRS. In case a driver is also provided then he has to pay additional tax on top of the flat rate.

If the vehicle’s expenses are provided by the employer, then the taxable amount is equal to the total expenditure incurred by the company minus the fixed amount of fuel and maintenance charges minus fixed amount for driver’s salary minus the amount of tax collected from the employee.

Situation 4 : Vehicle is used for both personal and official purposes but owned by the employee.

If the vehicle is owned by the employee and all the expenses are met by the employer then the taxable amount is the difference between the total expenditure incurred by the employer and the flat tax rate plus driver’s salary discount.

The basic idea behind the fleet taxable software is to decrease taxable income and help your employees save more money. Fuel allowance is the best way to do this.

From the taxable benefits point of view, it is very important that your employees keep a proper record of each mile traveled for official and personal purposes. The best software for small business also keeps all the fuel purchase receipts and maintenance records.

From the employer’s point of view, they need to do proper payroll tax remittances. As your business grows, you have to be on your heels to pay the payroll taxes on time and properly. The most important thing is knowing the tax implications of your actions. It is good to provide benefits to your employees but also equally important to educate him about the tax benefits of the allowances given to him.

Tax Liabilities for Fleet Owners

The first and foremost thing fleet owners need to understand is that any income they generate while operating a fleet is subject to income tax. But how to pay your taxes to the IRS changes completely. Now there is no employer holding taxes and paying on your behalf. There are few things you need to have a grasp on while operating a fleet.

1. You need to pay estimated taxes quarterly. Estimated taxes only need to be paid if expected to owe more than $1000 in taxes in a quarter. You can pay these taxes online in a very convenient fashion.
2. You also need to pay self-employed taxes. This amount basically makes up your part and the employer part of social security and medicare taxes.
3. You need all the tax deductibles to save as much on the taxes as possible. There are a lot of expenses that come under the tax deductibles.
4. As a fleet owner you also need to collect and remit the sales tax on your earnings. This sales tax can vary from state to state and even from city to city. Therefore you need to see a state and local tax expert to get better knowledge about this.
5. It is absolutely necessary to get the tax help because you can be fined heavily for not complying with the tax laws. There are few situations where you need to be extra vigilant about your taxes.

When Does a Tax Audit Happen?

You’re lucky if you haven’t had to go through an ifta audit penalties. It could happen. Let’s not forget about it. To ensure accuracy in the distance accounting process of trucking companies, an IFTA audit is performed. Why? Because it is used to calculate tax obligations for each country along a driver’s route.

Usually, the IFTA conducts audits every three months to verify that there are no discrepancies within the distance accounting system. A 30-day notice will be sent to you by your base state regarding the upcoming audit.

Taxes Incurred on Rental Income

Rental income is subject to taxes and there are seven tax brackets for rental income ranging all the way from 10% to 37%. With more income, you will be charged taxes with a higher tax bracket. But your tax bracket will only depend on the taxable income. Your taxable income is the difference of gross income and all the tax deductibles.

Scaling Your Fleet

In case of a boom in business, a lot of owners added many cars to their fleet and in a short amount of time their business grew significantly. When your business grows, there are few expenses you can keep in mind that can be tax deductible. Vehicle depreciation is the most significant of them. Usually a fleet vehicle’s life span is considered only 5 years. This can reduce your tax liabilities a lot.

Main Tax Deduction for Fleet Owners

Tax deductions are a nice way to reduce your taxes. Tax deductions include the common and necessary expenses related to your business. Here are some main ifta tax reporting deductions for fleet owners.

1. Vehicle Depreciation : usually a fleet vehicle’s useful life is considered only 5 years. You can spread this tax benefit over the course of a vehicle’s useful life.
2. Vehicle Insurance : every vehicle needs to have insurance coverage in order to legally operate. But for fleet operations, you also need additional coverage. Therefore you can charge the insurance as a business expense.
3. Vehicle Maintenance : this is another expense you can deduct from your taxes. Basically this expense is to keep your vehicle in good health to operate smoothly.
4. Marketing Expenses: most of the fleet owners hire photographers to take a few good pictures of their vehicles, which helps them attract more people to rent their cars. You can charge these kinds of expenses as a tax deductible.
5. Parking Fees : if you have to pay a parking fee to park your cars then you can claim that as a tax deductible.
6.  Annual Registration Fee : annual registration fee is also tax deductible.

There are many other deductions you can claim while filing your taxes. Any amount of repair done on your vehicle is tax deductible too. There are some people who save money for retirement and put it in an IRA. This whole amount is tax deductible. You can also deduct your half self-employed tax, basically an employer’s part as a deductible cost.

For additional Tax Assistance

A lot of fleet owners like to file their taxes by themself but it is not wrong to ask for any assistance from trucking company software if you are not 100% sure about your tax situation. When you are operating a decent fleet, it is good to take a professional’s help in doing your taxes. Filing your taxes while understanding them completely is a full time task and if you commit too much to that then you cannot put your mind to focus on your business growth.

You can utilize a tax adviser who specializes in fleet taxes. He will make sure your business is fully compliant and your taxes are prepared accurately and in a timely fashion. Therefore it is very essential to know when you need a professional’s advice or not.

What Do You Understand About a Fuel Management System?

A complete management system contains parts like hardware and software that provide correct information to people. Hardware like ifta mileage tracker provides companies with vehicle data by using telecommunication technology and allows the manager to note the fuel consumed in a single trip. Fleet companies are digitalising themselves to be productive and to increase their work performance. When you do not have time to keep records physically, this thing saves your time and energy. This improves the work coordination and saves the efforts of the workers. All the data provided helps companies to know their fuel costs and ways to control them.

Reasons Why Transportation Companies Need Fuel Management Software:

1. Helpful in Managing Fuel Costs: Companies need to have all the fuel records in hand to analyse the amount of fuel consumed by their vehicles. With mileage calculator software, every aspect of business becomes much. Everything becomes more accessible, and one can find out about the fuel consumed by automobiles and how to optimise it. With better management comes better understanding, and with it comes the knowledge of where your company is losing out on fuel funds. Many softwares allow transportation businesses to know if their vehicles need service, which is why they consume more fuel often.

2. Saves Vehicles From Fuel Thefts: It is essential to monitor your vehicles at all times. If unexpected leakage occurs while operating the vehicle, the software alerts the driver and the manager regarding it. This saves money and helps fleet managers to know if the drivers are using excess fuel while driving.

3. Drivers Become Responsible: Sometimes, drivers drive too rashly and use brakes too frequently, leading to vehicle damage. If the drivers know they are being monitored, they practise safe driving and keep the vehicles in good condition. Apt braking and engine damage can increase fuel intake and increase your expenses. Driving aggressively leads to accidents and can prove dangerous in future.

4. Helpful in Filing Fuel Tax: Manually calculating fuel taxes is a thing of the past; with the development of technology, there is no need to maintain spreadsheets. You can use GPS and a fuel management system to know everything about the amount of fuel burned during one trip. Companies use the information obtained by fuel calculating softwares to file their tax reports.

5. Get Accurate Data: For many fuel cards and mobile applications, drivers can know the fuel consumed by them during one delivery trip. You can use this information to prepare an ifta mileage report and file correct taxes. While this method is not appropriate for large scale fleet businesses, small freight businesses can use it to file their fuel taxes.

6. Track Your Vehicles: All vehicles have some inbuilt technology to know about their whereabouts and live locations. You can use an ELD to see the amount of work put in by your drivers and calculate the amount of work done by them. Some applications allow companies to transfer all the data to their hard drives and email IDs.

7. You Can Use It With Telematics Technology: A telematics system combines hardware and software to provide real-time data to people. You can customise this technology to suit all your needs and receive alerts of the fuel usage and distance travelled by the vehicle.

The Summary: All companies face several problems and issues while managing their fuel costs. Mismanagement of fuel costs means loss of money. With the increase of technology, fuel management has become more accessible, and you can control the use of fuel with smartphones, tabs and laptops from anywhere and everywhere. Fleet management software helps freight companies to save money on fuels and stay ahead of their competitors. Telematics does not refer merely to the tracking of vehicles; it provides the control of the fleet in the owners’ hands. A fuel management system comes with the best fuel control systems and reduces the consumption of fuel.

Nine secrets of the trucking industry:

1. Having all information about your company: Making the right business decisions is essential for people if they want to succeed. One wrong decision can ruin your business and leave you stranded. To make effective decisions, you must have all the essential information at your fingertips. All the data, be it detailed, current, and instant, should be available to the company owners. It will help them to understand their strong points and know where they are lagging. This will help them to make informed decisions which will help them financially. You should know all details like shipped order, payments, salary given and deliveries made. People can do this with the help of automated software for trucking business.

2. You must integrate information at all times: Your transportation company may require different software and tools to maintain all the data. The most important cause of business failure is lack of knowledge. By using this software, you can create coordination between different departments and then allow them to do the business. People can review and update the information to their liking and ensure that no delay takes place. Using a digital platform enables freight companies to check a piece of information when needed.

3. Do everything to ensure your customer satisfaction: Finding customers is easy but retaining them is difficult. Different types of customers want different things. Some people wish for the lowest prices, while some like to get the best service no matter what the cost. Companies make the mistake of providing cheap services to people while reducing the quality of their service. This is why they lose business quickly and have to shut the shop early. People should hire qualified drivers and have the best equipment if they want to retain their customers. This will improve the cash flow and allow you to survive longer in business. Having immediate and relevant information can help you to deal with emergencies and unforeseen circumstances.

4. Keep your driver happy: If you want to succeed in your trucking business, you must take time to hire the best people for the job. Hiring qualified drivers, workers, employees, and mechanics is a critical factor for attaining success. Hiring the best people is not enough; you must work on retaining them and improving their productivity. If they gain job satisfaction while working for you, they will not want to opt for a job change. A company must keep its truck drivers happy as they are the ones doing most work. You should provide them with additional bonuses and additional coverage.

5. Settle your payments on time: The secret of keeping your workers happy is handing payments on time. Many drivers opt for a job change if they do not get their dues on time. This harms a company’s reputation, and people do not want to work with that company in the future. Keep your payments settled at all times if you wish to do your business with ease. While paying, your employees must keep many things in mind like working hours, miles covered, over time, and advance payment, if any. You can pay your drivers by hand or automatically credit the payments to their accounts.

Video Source: Alfa X Logistics

6. Invest in a dispatch system: A sound trucking software forms a trucking company’s backbone. It adds efficiency to peoples’ work and allows them to know their work schedule. Manually maintaining all schedules and records is not possible. Learning the driver’s work schedule in advance will enable you to deal with emergencies and accidents. The company gets easy access to all employee records with a dispatch system. Knowing schedules in advance helps you avoid mistakes and manage your company efficiently.

7. Ensure constant cash flow in your business: Having regular cash flow helps your company to survive with ease. You can take the assistance of many softwares to calculate the payments you have to give to your workers. Companies must pay the drivers after the deliveries are done. You should have full access to income and expense statements to improve your cash flow. Lack of cash flow is the most significant cause of business failures.

8. Generate computerized IFTA tax reports: If companies want to do their business legally, they must pay IFTA taxes in full. You can take the help of many tools and softwares to do the same. You have to file this tax report quarterly. Some companies hire contractors, accountants, and managers to file their taxes for them. The IFTA software calculates the correct mile and fuel consumed and allows you to file an accurate tax report.

9. Invest in truck management solutions: Having a truck management solution eases your workload and allows you to manage your business efficiently. These solutions are designed by people who have experience in the trucking business. They are web-based and store all information in the company’s databases. This information is used to file taxes, give salaries and maintain employee records.

Therefore, to overcome this problem, a lot of companies are optimizing freight logistics costs. In addition to the reason mentioned above, globalization is also responsible for it. The companies are preparing their products for international branding. This, in turn, is taking a heavy toll on the production and manufacturing costs. This is also directly and negatively impacting the logistics cost. Thus, it is highly essential to reduce the freight logistics cost. Here are a few ways by which an organization can optimize freight logistics costs. These are as follows:

Look for Potential Errors

A lot of unwanted errors usually accompany the logistics industry. These errors not only reduce the potential of an organization but also make a substantial financial difference. Hence, the business entity must make a note of mistakes that occur during the logistics process. Proper plans and strategies must be carved out so that one can eliminate them as soon as possible. For instance, sometimes, due to lack of information, deliveries are not made. This makes a significant impact on the supply chain of an organization. Thus, it is essential to remove such errors to do the work efficiently without incurring much cost.

Value-Adding Services

Outsourcing certain activities in the logistics industry are entirely normal. Business organizations often take assistance from other organizations for some of their tasks. For instance, putting a label on a product is more commonly called labelling. This is a simple task that is sometimes completed in assistance with the other company that outsources this service. While on the other hand, sometimes, a few complex tasks, such as product customization, are also finished through outsourcing. However, the logistics manager must look at the cost that is involved in completing these tasks. If high costs are involved, it is best to do that task in-house or get it done through a supplier.

Accommodating the Shipments

While shipping the goods, a lot of shipment costs are involved. Therefore, the best solution that is also cost-effective is one that can accommodate the shipments together. An organization can save a significant amount of money by doing so. The trucks must be arranged according to the capacity. In case if a big truck is selected, then a lot of space is left. This will only increase the shipment cost, ultimately increasing the logistics cost. In such a situation, the company must arrange the transportation based on inbound and outbound. By doing so, a lot of costs can be saved. In addition to this, space is also efficiently utilized without causing a lot of wastage. In this way, the company can effectively use all the available resources.

Internal Working

The supply chain can be run effectively and efficiently when there is proper coordination among different groups. Apart from the external people, internal coordination also plays a vital role in the supply chain. In addition to this, it also has a crucial role to play in decreasing the freight logistics cost. If internal working is not efficient and there is a lack of coordination among various departments, there will be a lot of wastage. Internal departments play a key and essential role in lowering down the freight and logistics cost. It is the duty and responsibility of a logistics manager to maintain a free flow of communication and information among different departments. This is crucial to the entire procedure.

Communication Is the Key

Last but not least is to communicate your goals and objectives to the people working in the organization. By doing so, more and more different plans and strategies can be understood and acknowledged. If a better communication channel exists in an organisation, there are greater chances of it getting successful.

Video Credit – fleetroot

Technology

A lot of organizations are extensively using softwares and various other applications. In addition to this, technology offers modern solutions to all current problems. Thus, the company must invest in good software that is updated, cost-effective, and fulfils the requirements and demands of the business entity.

The Bottom Line

Hence, there are many ways by which one can lower down the huge freight logistics cost. Choose the one that is most appropriate for your company. In this way, a company can reduce the cost to a significant extent.

Every truck software provider claims to offer the best for your fleet, so how do you find which one is the best for you? You might be overwhelmed with the plenty of options that are currently available. So, in order to help you, we have done some groundwork. Here is a list of the best solutions for trucking and freight companies. The software providers of the listed solutions have several years of industry experience and offer the best features that fit your needs and budget.

Axon Dump Truck Software:

With 40 years of experience in serving the trucking industry, Axon is the leading name in transport software. Their dump truck dispatch software comes with customized features, which is incredibly beneficial for dump truck haulers to save time and get paid faster. Dump truck dispatcher is an integrated TMS to optimize the hauling business processes. Being a dispatcher can be a stressful job, and the dump truck software can help access all the information about clients, orders, drivers, and schedules at their fingertips. The dump truck billing software eliminates the need for entering the load data manual and provides you with immediate billing and payroll computation.

If you are taking the big step of becoming a dump truck driver, how to find dump truck work is a crucial factor. The software makes it easy to find a job that fits your qualifications and personal preferences. It also helps you manage your dump truck hauling tickets electronically so that you do not miss out on any hauling entry. The solution can also assist in dump truck load tracking so that the dispatcher knows the status and location of the trucks at any given point in time.

“When the choice is between a demanding relationship and a vintage pickup truck, I’ll choose the truck every time.” – Amy Dickinson

Axon’s dispatch software is a simple and easy-to-use solution that can route, track, and analyze deliveries, communicate with drivers and provide real-time updates to clients. It is the best truck dispatch software you will find in the market today.

eTrucks Mileage Calculator:

eTrucks is the new arm of Axon Software which helps you in IFTA compliance. One can create the required mileage sheets using this IFTA mileage calculator. The solution lets you calculate IFTA miles by tracking receipts, managing mileage logs and recording trip by trip fuel data. It is a state to state mileage calculator that calculates ifta miles with effectiveness. This truck mileage calculator helps you estimate miles for each trip made in a particular state. This IFTA calculator is an easy-to-use tool that provides you with information about stops, trips and fuel purchases. If you are a trucking carrier, this ifta calculator by state is an efficient device that won’t leave you in a financial lurch every quarter. There is no need to file your IFTA taxes the old-fashioned way with this solution. This state to state mileage tracker will prepare an IFTA mileage chart for you based on all the records that you provide.

Dossier Systems:

Fleet management is not an easy task. But, the Dossier fleet management software is here to help you. The software provides you with a detailed overview of your fleet and lets you manage it effectively. The fleet maintenance software provides excellent features with a wealth of information to help you make strategic decisions related to profitability and productivity. The software also enables you to create reports and analyze trends that can help your business improve. With this solution, real-time fleet tracking is also possible.

Detrack:

Detrack is a flexible, affordable and simple platform that provides managers with real-time information about when the orders get delivered. This helps the customers to track their deliveries throughout the order process. The ultimate objective of the software is to minimize the number of customer service calls and keep the customers happy. This delivery management software is best for vehicle tracking and driver management alike. The software can easily be set up on your smartphone and does not require any expensive hardware to run. Also, the customer support team of Detrack works continuously to provide you with the best.

Video Credit – schneiderjobs

Axon Accounting Software:

Accounting is a significant aspect of the trucking business that cannot be taken lightly. It can be difficult to manage receivables and expenses manually. This is why trucking accounting software is the best solution for trucking companies. A trucker can easily manage all freight invoices with a few mouse clicks. There are greater chances of entering wrong invoice details manually. A trucking invoice software is designed in such a manner that you can easily get all the details of the orders instantly without having to do much. It can also help you prepare your data for taxes.

When a trucking company has trucking accounting software for owner operators, it becomes easy to simplify the accounting tasks. The trucker bookkeeping app keeps proper track of your profits and daily expenses. The app allows you to open invoices, bills from anywhere and anytime. This kind of trucking software makes your accounting process faster, thus making your workforce more productive. There is also free trucking software for small fleets that helps carry out bookkeeping and accounting functions, manage customers and verify settlements at zero expense.

Bottom Line

A lot of truck drivers and fleet managers face common fleet-related problems regularly. Due to this, it is vital to select a reliable solution that offers them everything they need and can integrate itself with other applications to create an efficient package for the users. The above-listed trucking software options come with a wide range of features, customizations, and prices; thus, it is easy to pick one that suits your situation best.