Automotive Industry, Vehicle October 11, 2021 Tax Help for Fleet Owner There is never a bad time to start thinking and planning about your taxes. If you are self-employed then it is all the more crucial to start thinking about the taxes. For a good amount of tax saving, you need to carefully plan your tax strategies. Fleet owners are considered self-employed. This fact alone changes the tax situation and can lead to mistakes and errors while filing your taxes. Before getting any help in taxes fleet owners need to understand their tax liabilities. Read More 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. 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. 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. 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. 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. 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 What Fleets Need to Know About Fleet Taxable Benefits Read 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. 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. 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. 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. 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. Parking Fees : if you have to pay a parking fee to park your cars then you can claim that as a tax deductible. 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. Tweet Share Pin Share Share: Post navigation Previous Previous post Fuel Management Systems: A Modern Way of Controlling Fuel Usage and Costs Next Next post 9 Powerful Secrets That Ensure Success in the Trucking Business Related Posts Automotive Industry October 12, 2021 What Fleets Need to Know About Fleet Taxable Benefits Operating a fleet company is a very complex endeavor, there are various key elements to consider while running a fleet of vehicles smoothly. One ... Read More Automotive Industry October 10, 2021 Fuel Management Systems: A Modern Way of Controlling Fuel Usage and Costs A fuel management system hands over the control of fuel and fleet in the managers’ hands and helps them note the fuel used by ... Read More Leave a Comment Cancel reply Your email address will not be published. Comment Name Email Website Save my name, email, and website in this browser for the next time I comment.