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What it Means for Your Small Business Starting January 1, 2024, a new reporting requirement went into effect requiring millions of small businesses in the US to file a Beneficial Ownership Information (BOI) Report with the US Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). The IRS has been tasked with communicating the new reporting requirement. Congress imposed this requirement with the passing of the Corporate Transparency Act. Every small business owner needs to know about this reporting requirement as non-compliance can result in severe penalties. UPDATE: As you may know, some business owners have brought suit against the U.S. Secretary of the Treasury challenging the authority they have to enforce BOI requirements under the Corporate Transparency Act. In these specific court cases, the named business has challenged the legality or constitutional authority of the BOI requirement, however, at this time there has been no ruling suspending the BOI reporting requirement for the majority of small businesses. ATBS will continue to keep an eye on any further updates and make announcements when applicable; however, for the time being, our advice to our clients is to adhere, where appropriate, to the new reporting rules in order to avoid all fees that may be assessed for not doing so. Purpose Every corporation, LLC, or other entity created under state law is required to file a BOI report, even if that entity is not required to file a separate tax return with the IRS. This means that for all clients of ATBS who have an EIN, even if you only report that income on a Schedule C on your individual return, you are required to file a BOI report. There are a few exemptions but unfortunately, none of the industry exemptions apply to transportation except for the “large operating company” exemption. A “large operating company” is an entity that (1) employs more than 20 full-time employees in the US, (2) has an operating presence at a physical office in the US, and (3) has filed a federal income tax or informational return in the US for the previous year with greater than $5 million in gross receipts. The exemption for inactive entities is still in process and more information will be communicated as it becomes available. For now, anyone with an inactive entity should await further guidance before filing a BOI report. Company information that has to be reported The BOI report must provide the company’s full legal name, any trade or “doing business as” name, the complete current street address of the principal place of business, jurisdiction of formation, and employer identification number. Beneficial Owner and Company Applicant information that has to be reported The report must include the legal name, date of birth, complete current residential address, unique identifying number, and the issuing jurisdiction from either a current US Passport or State Driver’s License and an image of the document from which the identifying number was obtained, for each person who is required to report. Definition of Beneficial Owner A beneficial owner is an individual who, directly or indirectly, either exercises substantial control over a reporting company (business entity) or who owns or controls at least 25 percent of the ownership interests of a reporting company. Definition of Company Applicant Each reporting company that is required to report company applicants will have to identify and report at least one company applicant and at most two. All company applicants must be individuals. Companies or legal entities cannot be company applicants. When should a company file its initial BOI report If your company was created prior to January 1, 2024, it must file its initial BOI report by January 1, 2025. If your company is created or registered to do business in the United States on or after January 1, 2024, then it must file its initial BOI report within 90 days of receiving actual or public notice that its creation or registration is effective. What if there are any changes to the reported information? If there is any change to the required information about your company or its beneficial owners in a BOI report that your company filed, your company must file an updated BOI report no later than 30 days after the date on which the change occurred. This includes any change to the information initially reported such as a change of address or an initial reporting error. How are BOI reports filed? The initial BOI report is filed online through FinCEN’s website at https://boiefiling.fincen.gov/fileboir We will continue to share more about this legislation as we receive more information. In the meantime, please reach out to your ATBS Business Consultant with any questions.

So you want to take advantage of home office tax deductions on your tax filing? With more and more Americans conducting work from home, this is a method for lowering your tax liability. If you are a self-employed individual, and you use a portion of your home for work-related activities, you could deduct home office expenses. While this is an available deduction, it is one that brings some risk and could flag the Internal Revenue Service to audit your tax return. You will want to understand the IRS requirements before you claim a home office deduction. Standard Home Office Requirements Before you claim any home office deduction, you must have an area inside your home used regularly and exclusively for work-related activities. In other words, a fax and computer in the corner of a bedroom used occasionally for sending out marketing pieces will not qualify as a home office in the eyes of the IRS. Another key word in this requirement is “exclusive”. The area designated as a home office must have exclusive use as a home office. It is a principal place of business or a location designated to “meet or deal with patients, clients or customers in the normal course of your business”, according to the IRS. On the other hand, a “separate structure not attached to your home” may also qualify as your home office. Not long ago, the IRS expanded its definition of business activities that can be considered in determining whether a taxpayer’s home office is their principal place of business. Today, if a home office is used “exclusively and regularly for the administrative or management activities of your business”, it does qualify. In addition, administrative activities such as billing operations, managing your books and business records, ordering office supplies, or setting up business meetings and appointments also qualify. Just be sure these activities are ones taking place in this location. Employees or Schedule C Taxpayers In the past, Independent Contractors, and employees who work from home could claim the deduction. With 2017’s Tax Cuts and Jobs Act, the deduction is no longer available for employees. This change affected all employee business expenses but was offset by a significant increase in the standard deduction. Limits on Write-offs The law places caps on the amount you can deduct from the business use of your home. Generally, your home office deductions can’t exceed your home-based business income. Also, if you have to pay Alternative Minimum Tax (AMT) when you itemize deductions, the home office deduction may be a contributing factor. Finally, if you depreciate a portion of your home as part of your home office deduction and later sell your home at a profit, you will pay a capital gains tax on the total amount of the depreciable deductions. Home Office Deductions Once you meet the IRS requirements, there is a long list of items you can deduct including: Office equipment A portion of real estate taxes paid Mortgage interest Rent Home utilities Insurance Depreciation Painting and general upkeep expenses Repairs Landscaping, only if you receive clients or customers at your home for business Note: These apply proportionally to the size of the office in relation to the size of the home. If you are self-employed, a good reference to use is IRS Form 8829, which is called, “Expenses for Business Use of Your Home” to compile and calculate all home office deductions. Furthermore, you will need to report these deductions on Form 1040 Schedule C, Profit or Loss From Business. In 2013, an alternate, Simplified Method, was put in place making it easier to claim the deduction. You must still meet the “regular’ and 'exclusive” requirement for Expenses for Business Use of Your Home, but you don’t need to depreciate the home or keep track of the various expenses. Instead, you merely list the square footage of your space and you will receive a $5 per square foot deduction up to 300 sq ft or $1,500. This amount often exceeds the actual expense method, and you don’t have to pay capital gains due to depreciation when you sell your home. Tread Carefully As a taxpayer, you want to be sure to get every tax deduction you deserve. But there is some risk to this endeavor which is an increase in the likelihood of an IRS audit. In fact, the IRS has increased its vigilance in identifying home office deduction fraud, so you will want to be sure and remain compliant. ATBS has been filing on behalf of self-employed contractors and employees of companies since 1998. Every year our trained staff is judicious in ensuring you get every legal tax deduction you deserve. Our excellent relationship with the federal government, our team of tax resolution specialists, and our staff of CPAs and Registered Tax Return Preparers translate to knowing more than any other firm how to file for the most tax deductions you legally deserve. Let ATBS help you with your taxes – call us today at (866) 920-2827.

2023 proved to be a difficult year with low freight volumes and rates in both the spot and contract markets. The question now is… where do we go from here? In this article, we'll give a recap of the year and answer questions including: The difficult market has certainly washed out some capacity, why haven’t we seen rates improve? What are the latest trends with miles, rates, fuel costs, and maintenance? Are ICs making enough to survive? What has happened to the IC population during this downturn? What's in store for 2024? Interested in learning more? Check out our full Independent Contractor Benchmarks and Trends Webinar, where we give a more in-depth recap of how owner-operators have performed in 2023! Freight Rates From May 2020 through April 2022, we saw one of the biggest increases in spot market load volumes and rates in the history of trucking. But in April 2022, while contract rates remained somewhat stable, spot market rates and load volumes began falling dramatically. Here are some numbers to illustrate this shift in the market: Peak- November of 2021 Loads: 240 loads per 1 truck looking for a load Rates: $2.49 per mile (without fuel surcharge) February 2023 Loads: 55 loads per 1 truck looking for a load Rates: $1.80 per mile (without fuel surcharge) September 2023 Loads: 60 loads per 1 truck looking for a load Rates: $1.93 per mile (without fuel surcharge) Today - February 2024 Loads: 61 loads per 1 truck looking for a load Rates: $1.88 per mile (without fuel surcharge) While we saw a 77% drop in the number of loads available and a 28% drop in rate per mile (net of fuel surcharge) from February 2023 to September 2023, we have started to find stability in the spot market. Both the amount of loads per truck and the rate per mile (net of the FSC) have remained stable over the last six months. We also continue to see signs of the spot market building momentum towards better rates and load availability. This didn’t come without pain. Those that remained in the spot market have likely seen cash reserves depleted due to increased fixed costs and a longer than normal difficult market. Miles In the beginning of 2023, we finally saw drivers begin to run more miles. We expected to see this sooner, as drivers tend to drive more miles during challenging times. Now, with a prolonged difficult market both in the spot market and with contract rates, we have seen miles increase more on a year-over-year basis in 2023 since the great recession hit us in 2008-2009. ICs started running more miles, and it’s already positively impacting net income! However, drivers running more miles have had a direct correlation to more capacity, which means the down market has likely been extended by running harder! Overall, miles have dropped significantly over the past 20 years. In 2003, owner-operators averaged about 140,000 miles per year. At the minimum, in a booming freight market, it dropped to 85,000 miles per year. Today it is up to 91,400 per year. As long as the market stays difficult, miles should continue to trend higher. Revenue Owner-operator revenue per mile is down 9.4%, or 20 cents per mile on a year-over-year basis. A significant portion of that has come from the reduced cost of fuel resulting in a lower fuel surcharge. True rates have also fallen simultaneously. However, due to the increase in miles, total revenue is only down 2.4%. We expect net rates to remain stable through the first half of the year, with the hope that we see a rebound in rates for the second half of 2024. Fuel From the middle of 2020 until the middle of 2022, a booming freight market enabled owner-operators to make good money and save up cash while not having to worry about costs. We are now almost two years into the opposite cycle with decreasing freight rates and quickly changing fuel costs. Owner-operators started to focus more on fuel mileage to earn more money. During the summer of 2023, we saw fuel prices dip significantly. In the last few months, we have seen that price continue to rise again and we could see fuel over $5 per gallon. With this in mind, if you haven't begun making changes to your driving habits to improve MPG, now would be the time to start. Luckily we just recently launched 25 ways for owner-operators to do just this. Maintenance Despite miles being up 7.5%, we only saw a 0.3% increase in maintenance. Generally speaking, when we see miles go up, we should also see maintenance go up at a similar rate. We believe there are two main reasons for this. First, owner-operators have been able to upgrade their equipment more so than at any time in the last three years. Trucks are now plentiful and prices have gone down. Newer trucks mean lower maintenance costs. Second, we often see deferred maintenance in a down market. When owner-operators are strapped for cash, they put off mechanical issues. This is a recipe for disaster because the number 1 cause of owner-operator failure is a major mechanical issue. The average IC is paying $1,000 per month for maintenance. This cost depends on the age of your truck, the routes you run, and the mileage you drive. You need a custom maintenance plan to make sure you are covered for the repair, the fixed costs when you are down, and your home bills while not generating revenue. Fixed Costs One of the most surprising figures at the end of this year was the 7.8% increase in fixed costs. These costs include items like truck payments and insurance. Last year we barely saw any increases in fixed costs. This is likely due to people upgrading their equipment as we discussed earlier, but also the ever-increasing costs of insurance. The average truck payment is up roughly $200 per month to $2,900. The inflationary costs we saw in 2023 hit fixed costs for owner-operators. Net Income Overall, owner-operator net income is down 2.1% to $62,932. While this might be a tough pill to swallow, net income has actually flattened out over the last six months. Not only that, but we saw net income rise on a year-over-year basis during every month of Q4. We believe we are at the bottom, but it is still difficult everywhere. That means the grass is not greener on the other side and now is the best time to dig in, earn more revenue, and cut costs where you can! Average net income is now lower than it was before the pandemic, However, the best owner-operators have not lost much at all. This is because when times got tough, they started to run more and focus on fuel efficiency. We're finally starting to see more owner-operators follow this same strategy. +1/-10 Incremental and small changes are the best thing you can do today. The two charts above illustrate the top two things the average IC can do to dramatically increase their income, increase their revenue, and decrease their costs. Increasing your revenue could just mean one more load a month, which is illustrated above. There are many ways to decrease your costs, but fuel is your biggest cost and the one you can control the most. Just one mpg better means taking home $8,000 or more in profit! If you do one of the two things above, you’ll increase your net income by $150 a week or $8,000 per year. If you do both, you’ll take home nearly $300 more per week, or $15,000 a year. It might not be possible to run 500 more miles a month or get one mpg better, but if you do a little bit of each, you’ll see drastic improvements to your net income. 2024 Outlook Revenue per mile slipped almost everywhere but seems to have bottomed out. However, it may not start going up for a while. Miles are finally trending upward. Increasing your miles can dramatically improve your take-home pay. Fuel MPG has started to improve. We can do better - slow it down! The best owner-operators have run more miles and increased their MPG. Their net income hasn’t gone down, and actually is starting to go back up! Save for maintenance & downtime, it’s the number 1 cause of IC failure. The best businesses and owner-operators are still doing well. The increased cost of fuel gives drivers the chance to improve fuel efficiency, run a little harder, and continue to succeed in trucking! The bottom line is that owner-operators control their own destiny, and they can make changes today to ensure profitability and success!

Back on March 31st, 2023, representatives Mike Gallagher (R-Wisconsin) and Abigail Spanberger (D-Virginia) reintroduced legislation to establish a refundable income tax credit for qualified commercial drivers. First introduced in April 2022, the bipartisan Strengthening Supply Chains Through Truck Driver Incentives Act would provide short-term incentives to try and attract and retain, new drivers. The lawmakers expect the bill to do three things: Create a new refundable tax credit of up to $7,500 for truck drivers holding a valid Class A CDL who drive at least 1,900 hours in the year. This tax credit would last for two years. Create a new refundable tax credit of up to $10,000 for new truck drivers or individuals enrolled in a registered trucking apprenticeship. This tax credit would also last for two years. Allow new truck drivers to be eligible for the credit if they did not drive a commercial truck in the previous year or drive for at least 1,420 hours in the current year. They may receive a proportion of the credit if they drive less than 1,420 hours in the year, but drove at least an average of 40 hours a week upon starting to drive. The Gallagher-Spanberger legislation is endorsed by several associations including the American Trucking Association, American Loggers Council, National Grocers Association, International Foodservice Distributors Association, American Building Materials Alliance, Forest Resources Association, Hardwood Federation, Wood Machinery Manufacturers of America, Third Way, and National Pork Producers Council. Also in 2023, Reps. Dusty Johnson (R-South Dakota) and Jim Costa (D-California) introduced the Safer Highways and Increased Performance for Interstate Trucking (SHIP IT) Act, a bill that, among other things, also called for a temporary $7,500 tax credit for eligible drivers. That bill puts a cap on eligibility linked to adjusted gross income for the taxable year not exceeding $135,000 for couples filing jointly; $112,500 as head of household; or $90,000 individually. New truck drivers who did not drive a truck during the preceding tax year would also be eligible for $10,000 under the same rules. Since these bills were reintroduced in the house early in 2023, there have been no further updates. So at this time truck drivers will not be eligible for any new “truck driver tax credits”. However, there are still plenty of tax credits and deductions truck drivers are eligible for. If you would like to learn more about these and make sure you’re paying as little as possible to the IRS, feel free to contact us. We will continue to keep an eye on any developments when it comes to this legislation and update this article as necessary.

Owing taxes to the Federal Government is never intended to be part of the plan, yet we can find ourselves in this position for a number of reasons. Whether a truck broke down, a mortgage needed to be paid, or an unexpected health emergency occurred, it is not uncommon to be placed in a position where you are choosing to sacrifice the funds you would have otherwise paid towards your tax bill just to stay afloat personally. In 2022, nearly 58.2 million taxpayers were in a position where they needed to interact with Internal Revenue Service (IRS) collections in some way. So, while it can feel scary, intimidating, or lonely to owe the IRS money, it is not a unique circumstance and there are a myriad of ways to tackle the problem to be sure you get back on track with them. Many people reach out to Tax Resolution Firms (or, are hounded by them in the other direction) when looking for direction on how best to address a tax debt. The same way we seek help from a doctor, lawyer, or CPA for certain and specific advice, it can be very helpful to track down help when looking to address tax debt. With that said, it is equally, if not more important, to really research, vet, and ask questions of the people you would be entrusting with this process. Choosing the wrong representative can lead to long delays with the IRS, avoidable IRS penalties, and very costly fees for work that ultimately never gets completed. Having worked for 4-different companies in my 11-year career, and knowing folks who work (or who have worked) for many other companies, I take great pride in keeping a finger on the pulse of the industry so that I can serve people in the most effective way possible. The industry has changed significantly over the years and there are many options when it comes to finding someone to help you. While I never make a point of speaking ill for the sake of it and I believe there are very good firms out there to work with, I think it is time to shine light on some of the more predatory practices I’ve seen so as to help people avoid falling into these traps themselves. I will outline here some of the more egregious practices I’ve seen and some tips and tricks to choosing a representative. The first thing to always remember is that if something sounds too good to be true, it probably is. Firms will sell you an Offer in Compromise (part of the Fresh Start Initiative) without even properly qualifying you for this type of strategy. While there are a number of IRS programs designed to help taxpayers resolve their debts in a way tailored to their specific needs, the idea of settlements (Offers in Compromise) should not be a first thought. 1 in 1,124 Offers in Compromise are accepted by the IRS. They are becoming more and more rare as the years go on. The bar to qualify for this type of resolution has become so high that unless you have a truly ironclad case, it is highly unlikely this type of resolution strategy would be effective. Firms often charge between $5,000-$20,000 to submit this type of resolution. The process can take up to two years and then when the IRS rejects the offer, the firm will charge you again to reach the payment plan you probably should have been set up on in the first place. Be sure that any company you choose to engage with is not charging you for this type of service up front without ever having talked to the IRS. Furthermore, you will want to be sure they have truly qualified you for this and have outlined clearly the reasons why they believe this would be successful for you, specifically. A second thing to pay attention to is the use of fear tactics. Is a firm attempting to scare you into letting them represent you? Firms will often try to scare folks into hiring them by threatening that the IRS can seize all of their assets and garnish all of their wages. They will make tax liens sound like they are going to ruin you financially. They will tell you that you are open to enforcement and that if you pay them today, their team of experts will put an immediate stop to this type of action just by virtue of you signing a Power of Attorney. These types of marketing tactics are misleading, unfair to the consumer, and are often factually untrue. Keep in mind that the IRS does not just seize property. It takes a long time for that to even be on the table and you would have had to neglect your debt for a long time. Even if you’ve received notices from the IRS that state, “Notice of Intent to Seize or Levy,” you typically still have time to address it with them before that action takes place. Additionally, the IRS does not just throw people in jail; they don’t freeze driver's licenses (though some States can if you owe a State Tax); and, they don’t stop you from traveling if you hold a currently valid passport (they can keep you from renewing or obtaining a new passport, but as soon as you are in a resolution with them, that action is reversed). The bottom line is, if someone is trying to scare you into letting them “help” you, they are likely not worried about your best interests. While you will not always hear what you want to hear, a good representative should always lead with providing answers to your questions and outlining all available options so you can make the best and most educated decision for yourself specifically. Instilling fear for the sake of forcing you to engage in representation has no place in that process. The last predatory type of action I’m going to address here is a newer tactic that I’ve seen arise in the last year. This is where a Tax Resolution Firm will “partner with” or “suggest” a specific lender who can issue you a loan to cover your fee with the firm and then you are paying back this lender for the work you hope the Tax Resolution Firm will complete for you. This might be the most insidious behavior I’ve seen in my experience. These firms often rely on scare tactics and over-promise you results - the two prior items discussed in this article. They quote you a fee for services without ever having talked to the IRS on your behalf and they’ve scared you so much that you feel you have no other option, but to go along with what they are selling you. They then offer a “quick and easy” solution to your problem of not having the full fee to get started with them when they set you up with this lender who can help. The lender approves the loan and issues the funds on your behalf to the Tax Resolution Firm. Now, the firm has been paid in full and you are now stuck with a bill owed to the lender who paid them for you. This makes it so much more difficult to hold your new representatives accountable to what they promised you. You can’t ask for a refund. You can’t stop payments. You are hog tied to that debt regardless of whether that firm delivers or not. If a firm is offering to set you up with a lender, my suggestion is to RUN AWAY. While there are many things to look out for when considering hiring a firm to represent you, the biggest thing is to remember that self-advocacy is the most important part of your process. You should feel like you understand the process, that you can ask questions and be heard, that you can reach someone when you need to speak with them, and that you feel you are still in the driver’s seat when it comes to the financial well being of your household and family. If you feel you have questions about any of the above or have experienced these types of tactics, feel free to reach out to our team at ATBS. Regardless of whether you are currently using us for services, it is important to us that taxpayers have access to resources that can help them navigate the complexities of the IRS collections system without falling prey to nefarious firms who over-promise, over-charge, and under-deliver.

As an owner-operator, you are responsible for paying taxes and calculating the net profit for your business. You can minimize tax liability by claiming every legal deduction and credit available. If you are a parent, you are entitled to numerous tax benefits. Having children qualifies you for some specific tax deductions that can significantly lower your liability. We have compiled a list of these deductions that will reduce the amount of taxes you owe. Here are some tax deductions specific to parents: Claiming dependents This is the most commonly known tax deduction for parents and a very important claim to significantly lower your liability. Claim your child as a dependent on your tax return, even if your child was born during the tax year. This will be shown as a certain amount and will reduce your taxable income. The dependent in question must be a US citizen and must have lived with you for more than half of the year in question. Your tax professional can help you determine if you qualify or you can use the resources on www.IRS.gov to determine your eligibility. Child Tax Credit For a child to be eligible, they must be 16 years old or younger and a relative. Also, they must not have provided more than half of their own support, and you must be claiming them as a dependent on your return. The Child Tax Credit could reduce your income up to $2,000. If you have children that are under the age of 17, you may be able to receive a $2,000 child tax credit. That means if you have two kids, you will be able to lower your tax liability by $4,000. There are income restrictions that will cause the credit to phase out. This happens when single filers earn $200,000 or more. Or if you’re filing jointly this will happen once you earn $400,000. For many people, this credit will be nonrefundable. However, for some lower income filers you might be able to get a refund if the credit is greater than your tax liability. The formula for calculating this amount is fairly complex, so it’s best to speak with a tax professional to see if you are eligible. Child and Dependent Care Credit To qualify for this credit, a child must be less than 13 years old and someone other than a spouse or a dependent is paid to care for them. Both parents must be working to qualify. If both you and your spouse are working parents, then you probably use some form of childcare. Depending on your location, this can be quite the expense each month. Luckily, you may qualify for a tax credit of 35 percent for the first $3,000 paid for one child or $6,000 when paying for two. Just like other tax credits, the amount you can claim will decrease as your income goes up. For every $2,000 above an AGI of $15,000, the credit will be reduced by one percent until it reaches 20 percent. Earned Income Tax Credit This is a tax benefit for people who make less than $63,698 a year. There are several specific qualifications, but you can easily find out if you qualify by using the EITC assistant. The amount you will receive depends on income, family size, etc. If you have qualifying children, you could get up to $7,430 extra back when you claim this credit. Be prepared to answer several questions with your tax professional for this fantastic credit that could save you thousands of dollars. Depending on your income and the number of children you have, you might qualify for the earned income credit. This was created so that lower-to-middle income families would be able to make ends meet. In order to qualify, your adjustable gross income (AGI) must fall below the following amounts. $17,640 ($24,210 when filing jointly) for zero qualifying children $46,560 ($53,120 when filing jointly) for one qualifying child $52,918 ($59,478 when filing jointly) for two qualifying children $56,838 ($63,698 when filing jointly) for three or more qualifying children Adoption Credit If you adopted a child, there are tax benefits available regarding some expenses incurred during the adoption process. The Adoption Credit includes both a credit for the adoption expenses and exclusion for employer-provided adoption assistance. For foreign adoptions, you must wait until the adoption is finalized to claim these credits. For domestic adoptions, you can claim the credit for expenses paid before the year the adoption becomes final or you can claim the credit for the tax year following the year of payment. If your family made the decision to adopt a child in 2023, you may be eligible for a tax credit of up to $15,950. If your AGI is greater than $239,230, the credit will begin to phase out. If your AGI was greater than $279,230 the credit won’t be applicable. Higher Education Credits If you paid for your child’s higher education, you may qualify for either the American Opportunity Credit or the Lifetime Learning Credit. The American Opportunity Credit can reduce tax liability up to $2,500 for each child in college as long as the adjusted gross income is less than $80,000 if single, and $160,000 if filing jointly. The Lifetime Learning Credit can also reduce the amount of tax liability by up to $2,000. Talk to your tax professional for more details on how to qualify for these credits. American Opportunity Credit If you have a child in college, then you’re nearing the end of your financial responsibility. But now is probably also the most costly time for you. College expenses are increasing each year, but with the American Opportunity credit, you’ll receive a small reprieve. You will receive a 100 percent credit on the first $2,000 paid toward qualified education expenses, and 25 percent for the next $2,000 spent per student, per year for up to four years. Plus, up to $1,000 of this credit is refundable. The American Opportunity credit will begin to phase out for anyone that has an AGI greater than $80,000 ($160,000 when filing jointly). You will no longer be eligible when above $90,000 ($180,000 when filing jointly). Lifetime Learning Credit This credit helps parents and students pay for post-secondary education (grad school and night school tuition). You may be able to claim a Lifetime Learning Credit of up to $2,000 per qualified individual on the tax return at a rate of 20% of the funds spent on qualified college tuition expenses. There is no limit on the number of years the Lifetime Learning Credit can be claimed for each student. Student Loan Interest If you are paying student loans, you may be able to deduct the interest you paid from your income. This is applicable even if you do not itemize your deductions, however, the loan must have been taken out only to pay for education costs. This deduction is available when you are paying off a student loan. You are eligible to deduct up to $2,500 of interest per tax return. The student loan interest deduction is taken as an adjustment to income. This deduction has limitations and will begin to phase out at a Modified AGI of $75,000 ($150,000 when filing jointly) and ends at $90,000 ($180,000 when filing jointly). Self-Employed Health Insurance Deduction If you are paying for your child’s health insurance under your company health care plan, generally your company can deduct the insurance costs. Ask your tax professional for more details on how to use this deduction. Child Wages Deduction Hiring your children to do easy tasks will give your business a tax deduction for their wages. Pay children with a check, issue them the appropriate tax form, and create a job description for them to claim this deduction. As an owner-operator and a parent, it is important to the success of your business and your family’s future to take advantage of these great tax credits. If you would like more information on any of these tax credits for parents, contact ATBS at 866-920-2827 (ATBS) or visit the IRS website. 529 Plans This program allows you to either prepay or contribute to an account to pay for a student’s qualified higher education expense at an eligible educational institution. Tax-free as long as they are used to pay for qualified higher education expenses. Distributions can be used for tuition, required fees, books, supplies, and room and board. There are no income limit contributions. No age limits. Open to adults and children. The contributor of the account has control, not the student. There is no federal limit on the number of changes you make if you replace the student’s account with another qualifying family member at the same time. Distributions from 529 Plans can be used to pay $10,000 of tuition per beneficiary each year. K-12 in public schools, private or religious schools. Be aware that your investment options may be limited when making changes to them. Kiddie Tax Part of a child’s 2023 unearned income more than $2,500, such as dividends and interest, may be taxed at the parent’s tax rate. This is for children under the age of 19 or a full-time student under the age of 24 who do not earn any income. As an owner-operator and a parent, it is important to the success of your business and your family’s future to take advantage of these great tax credits. If you would like more information on any of these tax credits for parents, contact ATBS at 866-920-2827 (ATBS) or visit the IRS website.

Historically, the Internal Revenue Service has always seemed a little bit scary, slightly out of reach, and shrouded in a sense of secrecy. It’s not been an easy system to navigate or interact with and that feeling only worsened during the COVID years and beyond. The purpose of this article is to shed some light on what the IRS has been up to and what changes to their collections process we anticipate in the coming year. Throughout 2021, 2022 & 2023, we saw a significant decrease in issuance of collections notices from the IRS. This was largely in response to the strain that the COVID pandemic put on taxpayers across the country. Further, the IRS shut down their automated collection functions in its entirety. They’ve been instructed to reopen all of those functions in 2024. This means there will be a large increase in enforcement on all cases where untended back tax exists. The IRS slowly reopened collections functions throughout 2023 and we anticipate a return to more “normal” - pre 2020 - collection efforts throughout this year and beyond. So, what does this mean for you? If you are missing tax returns for the last few years, it is important to remember: The IRS can require that we file the most recent 6-years’ worth of returns if we have not done so; The IRS can (and, will) file on our behalf if we do not file. This protects the IRS' interest in taxes that may be due for that year. When they do this, they are not taking into account any deductions you would otherwise be eligible for and this typically results in much higher balances than would be due if you filed an original return. If you owe back tax and have noticed a softening in the IRS corresponding or enforcing against those balances due, we would suggest you prepare for a reversal of those more lenient practices. If you are in a position where you owe the IRS on prior year taxes and are NOT in a payment plan with them, you should anticipate: A resurgence of collections notices in the mail; A higher likelihood of wage or income garnishments - yes, they can issue levies to 1099 income sources; A higher likelihood of bank levies; A higher likelihood of lien issuance when you owe greater than $10,000. If you do owe back tax, you should contact the IRS to discuss resolution options. If you wish for assistance in this aim, our team of experts is happy to talk to you. On the heels of a time period where the IRS was not enforcing at levels consistent prior to the year 2020, it is also understandable that you may not know, entirely, where you stand with them. If you are in this camp, and wish to get an overview of your IRS account with a roadmap of steps that should be taken to address any outstanding issues, we can help. If you are unsure of where you sit with the IRS, our team of licensed Enrolled Agents can contact the IRS for you in an effort to: Get a big picture overview of your account with the IRS; Obtain a breakdown of all balances due with an understanding of collection statutes for any balances and how long the IRS has to collect; Obtain an accounting of which returns may be missing and need to be filed; Obtain Wage and Income Transcripts for any unfiled years. These will show any income reported to your Social Security Number for any years that have not yet been filed; Obtain Account Transcripts for each year that there is a balance due to the IRS - these will show transactional detail; Outline a roadmap with all available options to reach an amicable resolution with the IRS. Our desire is to be sure you are set up for success. Understanding where you, and your business, stand with the IRS is an important component to that. If you’re a truck driver who is behind on filing multiple years of tax returns and may owe thousands of dollars to the IRS, click here to learn more about how we can help, or give us a call at (866) 920-2827.

We wanted to take a moment to thank clients for the valuable feedback you've shared with us regarding the new ATBS Hub. Your insights have been instrumental in shaping the user experience, and we are thrilled to announce some exciting new features that have been added based on your suggestions. Here's a brief overview of the enhancements we've made so far: 04/02/24 Updates Added "What If" sections to Profit Plan 02/23/24 Updates The 2023 Personal Tax Organizer is now available to clients as a DocuSign Powerform that clients can launch themselves directly from their client Hub. 02/06/24 Updates Links will now open in the app if it is installed on your device Fixed multi-page navigation on small screen sizes Fixed Per Diem calendar auto-returning to the current month Fixed "Upload File" button not working on first tap in mobile on Safari 01/22/24 Updates Fixed P&L / Balance sheet table scroll Added P&L / Balance sheet download Updated language on the home page Updated login page language Added the app version number to home page menu 12/21/23 Updates Login Experience The Hub now includes a “keep me logged in” feature so that the user can choose to stay logged in on trusted devices for an extended period of time. Username and Password can be saved. This is dependent upon the OS, device, browser, and user settings/options. Documents Increased file size limits. Access your device’s Camera Roll from directly within the Hub. Share documents/files to the Hub from other apps on your device. For example, share a PDF file in your device’s Email app directly to the ATBS Hub. Improved usability of the cropping tool. Profit & Loss Statements and Balance Sheets Added charts for YTD Miles and YTD Expenses. P&L and Balance Sheet drill-downs now show images of documents sent from any source (app, email, and physical documents). Previously, only documents that originated from the mobile app were displayed in the drill-downs. Fixed bugs related to the display of some P&L information, including Fuel Surcharge Revenue displaying correctly in the YTD Charts and some categories that errored for certain clients. Per Diem Added a “Year” option that allows clients to view/update the per diem for any year. When the “Year” is selected, the Per Diem Summary tile and the Calendar automatically display the selected year. Profit Plan Personal Obligations section added. Tax Updated language on the Quarterly Tax Estimates to make it easier to pay estimates. Added Tax Returns for clients who have multiple Returns in a single year. For example, business entity and personal returns, and married filing single returns for husband and wife. General Fixed numerous back-end items to improve stability, speed, usability, security, reporting, automations, and various other items. We believe these additions will greatly enhance your overall experience with the ATBS Hub and provide solutions to the challenges you've shared with us. We will continue to update this page as new updates continue to be rolled out. Thank you once again for being an integral part of our user community. Your feedback is invaluable to us, and we look forward to continuously improving our services to meet your expectations.

Section 179 doesn’t increase the total amount you can deduct, but it allows you to get your entire depreciation deduction in one year, rather than taking it a little at a time over the term of an asset’s useful life. This is called first-year expensing or Section 179 expensing. (Expensing is an accounting term that means currently deducting a long-term asset.) Example In 2023, Bill buys a $25,000 van for his delivery business. Under the regular depreciation rules, Bill would have to deduct a portion of the cost each year over its five-year useful life. By deducting the van under Section 179, Bill can deduct the entire $25,000 expense from his income taxes in 2023. So he gets a $25,000 deduction in 2023 under Section 179, instead of the normal deduction he would get using regular depreciation methods. The maximum Section 179 deduction in 2023 for vehicles 6,000-14,000 pounds is $28,900. What Property Qualifies You qualify for the Section 179 deduction only if you buy long-term, tangible personal property that you use in your business more than 50% of the time. Under Section 179, you can deduct the cost of tangible personal property (new or used) that you buy for your business. Examples of tangible personal property include computers, business equipment and machinery, cell phones, etc. Property Used Primarily (51%) for Business To deduct the cost of property under Section 179, you must use the property primarily for your business. The deduction is not available for property you use solely for personal purposes or to manage investments or otherwise produce non-business income. You can take a Section 179 deduction for property you use for both personal and business purposes, as long as you use it for business more than half of the time. The amount of your deduction is reduced by the percentage of your personal use. You’ll need to keep records showing your business use of the property. If you use an item for business less than half the time, you will have to use regular depreciation instead and deduct the cost of the item over several years. Another limitation regarding the business use of property is that you must use the property over half the time for business in the year in which you buy it. You can’t convert property you previously used for personal use to business use and claim a Section 179 deduction for the cost. Annual Deduction Limit There is a limit on the total amount of business property expenses that you can deduct each year under Section 179. The maximum in 2023 is $1,160,000 with a phase out threshold beginning at $2,890,000. Once you're above $4,050,000, no Section 179 deduction is allowed. You don’t have to claim the full amount, it’s up to you to decide how much to deduct under Section 179. Whatever amount you don’t claim under Section 179 must be depreciated instead over the life of the asset. Advantages and Disadvantages of Taking Section 179 The main advantage of Section 179 is it lets you take a higher deduction immediately. By receiving a higher depreciation deduction today, a business will reduce its current tax bill. This deduction is especially helpful for new businesses that may be having cash-flow troubles. Section 179 lets businesses maximize deductions today and avoid delaying deductions to the future when the business may no longer exist. Two of the major disadvantages are as your income increases, it will move into a higher tax rate. By accelerating your business's deductions, you will have fewer options in the future to reduce your taxes when your business may be in a higher tax bracket. Another disadvantage of the accelerated method is that it has a greater risk of recaptured depreciation. You may decide to sell a long-term asset before it is considered worthless according to its depreciation schedule. If you sell the asset for more than its current accounting value, your profit will be considered recaptured depreciation. The IRS will take back your depreciation deductions as the asset did not lose as much value as planned. Your recaptured depreciation profits will be taxed as income. Accelerated depreciation systems have a higher cost of recaptured depreciation because they recognize more depreciation upfront. Proper planning can help you make the best possible decision on depreciation. Call your business service provider today to discuss your current situation and your future business plans in order to make a sound decision on depreciating your business assets.

If you are a company driver, you probably receive a paycheck every two weeks. From that paycheck, certain payroll taxes are withheld. These include Social Security, Medicare, as well as state and federal taxes. However, when you make the move to becoming an owner-operator, you become entirely responsible for calculating and paying your own taxes. What is Self-Employment Tax? In 1935, the United States government passed the Federal Insurance Contribution Act, which most of us know as FICA. This tax was created so that there would be funding for both Social Security and Medicare. This tax amounts to 15.3% of taxable income. Half of the tax is paid by the employer and the other half is paid by the employee. So what happens when someone is self-employed and there is no employer contribution? In 1954 the Self-Employment Contributions Act (SECA) was passed. What is now referred to as the self-employment tax, made it so that anyone who is self-employed would be solely responsible for the entire 15.3% tax payment. What makes up the Self-Employment Tax? We have already established that the self-employment tax will be made up of 15.3% of your taxable income, but let’s break it down a little further. This tax is made up of two different parts. The first is for Social Security which is 12.4%. What many people might not know is that there is a maximum income that can actually be taxed for Social Security. In 2024, the limit is $168,600, which is up from $160,200 during the 2023 tax year. The second part of the self-employment tax covers Medicare. This is made up of 2.9% of your taxable income. Unlike Social Security, there is no limit to the amount of income that can be taxed by Medicare. In fact, Obamacare actually added an additional 0.9% Medicare surtax to any income over a certain amount. If you are a single filer, the surtax would start at any income over $200,000. If you are married filing jointly, the added surtax would be applied on anything over $250,000. How to File Self-Employment Taxes? Anyone that claims self-employed income on their tax return will be required to file a Schedule C on Form 1040. This is how you will calculate your net self-employment income. Once you have determined your net income (or loss), if your net income is over $400, you will use this number on Schedule SE of your Form 1040. This will allow you to find out how much self-employment tax you will be required to pay for the year. If you file a joint tax return with your spouse, and they are self-employed as well, then you will both need to calculate self-employment taxes separately. Some of the rules can get a little tricky, so it’s best to call a tax expert to help guide you through the entire process. Filing Estimated Taxes When Self-Employed As a self-employed owner-operator, you’re not only responsible for paying your self-employment taxes, but you’re also responsible for paying estimated taxes each quarter. If you are an ATBS client, then we do most of this legwork for you. We will calculate the amount you owe based on your actual income or with a safe harbor estimate. Then, all you need to do is make your payment each quarter. This helps to simplify your life, allowing you to spend less time figuring out how much you owe, and more time getting back to doing what you love. The Bottom Line Deciding to make the jump from life as a company driver to becoming an owner-operator is a big step. While the rewards can be great, it also comes with more responsibility. Instead of having your taxes automatically deducted, you’re now responsible for making sure they’re fully paid. If you find the process a little overwhelming, give us a call at 866-920-2827 and let us do the work for you!

Tax scams can happen any day of the year, but are especially prevalent during tax season. Criminals can attempt to steal your money or personal information in a variety of ways including over the phone, through email, and with text messages. Read the following tips to find out how to stay safe from tax scammers. How can I tell if I am getting scammed? Scammers often use many of the same tactics in their attempts to steal from people. Being aware of these common tactics can help you determine if you’re dealing with a scammer. Common scamming techniques include the following: Asking for information through email, text message, or social media One of the first things you should remember is that the IRS will never ask for information via email, text, or social media. Keeping this in mind will eliminate the possibility of falling victim to a scam. If you receive an online message asking for information from somebody saying they are the IRS, assume it came from a scammer and ignore their request. If given the option to block or report the scammer, do so. Demanding Immediate Payment When it comes to tax scammers, a big red flag will be if they demand that you make a payment immediately. The IRS will never call you demanding immediate payment without first sending you a notice in the mail. The IRS would also allow you to question or appeal the payment prior to making it. Requiring Payments a Certain Way Another sign that you may be dealing with a scammer is if you’re asked to make a payment a specific way. Many scammers will ask you to make payments only with a prepaid debit card or by wiring the money. The IRS will never force you to pay a certain way and will allow you to decide which method of payment works best for you. Asking for credit or debit card numbers over the phone The IRS will never ask you to provide credit or debit card information over the phone. If you’re being asked to provide credit or debit card numbers over the phone to make a tax payment, you are likely dealing with a scammer. Threatening to bring in police to arrest you for not paying If you refuse to make a tax payment and are threatened with arrest, then you are dealing with a tax scammer. The IRS will not make threats of arrest for not making a payment. Don’t allow these threats to scare you into making the mistake of providing personal information to a scammer. What are the most common scams? Identity Theft Identity theft occurs when someone uses your personal information, such as your name, Social Security number (SSN), or other identifying information, without your permission, to commit fraud or other crimes. In many cases, an identity thief uses a legitimate taxpayer’s identity to fraudulently file a tax return and claim a refund. Pervasive Telephone Scams The IRS has seen a recent increase in local phone scams across the country, with callers pretending to be from the IRS in hopes of stealing money or identities from victims. These phone scams include many variations, ranging from instances where callers say the victims owe money or are entitled to a huge refund. Some calls can threaten arrest and threaten a driver’s license revocation. Sometimes these calls are paired with follow-up calls from people saying they are from the local police department or the state motor vehicle department. Phishing Phishing is a scam typically carried out with the help of unsolicited email or a fake website that poses as a legitimate site to lure in potential victims and prompt them to provide valuable personal and financial information. The IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. False Promises of “Free Money” from Inflated Refunds Scam artists routinely pose as tax preparers during tax time, luring victims in by promising large federal tax refunds or refunds that people never dreamed they were due in the first place. While honest tax preparers provide their customers a copy of the tax return they’ve prepared, victims of scams frequently are not given a copy of what was filed. Taxpayers should take care when choosing an individual or firm to prepare their taxes. Honest return preparers generally: ask for proof of income and eligibility for credits and deductions, sign returns as the preparer, enter their IRS Preparer Tax Identification Number (PTIN), and provide the taxpayer a copy of the return. What should I do if somebody is attempting to scam me? Over the phone If you get a phone call from someone claiming to be the IRS and you think you might owe taxes, call the IRS at (800) 829-1040. This way you know you are talking with somebody from the IRS and they will be able to help with the payment issue. If you know you don’t owe payments, or have no reason to believe you do, report the incident to the Treasury Inspector General for Tax Administration at (800) 366-4484 or at http://www.tigta.gov. Also, you can contact the Federal Trade Commission and use the FTC Complaint Assistant at FTC.gov if you believe you have been specifically targeted by a scammer. Email If you receive an email from somebody claiming to be the IRS, and they are requesting personal or financial information, you should not reply. Also, make sure not to open any of the attachments or click on any of the links. Next, forward the email to the IRS at phishing@irs.gov. Finally, mark the original email as spam and delete it. Text Message If you receive a text message from somebody claiming to be the IRS, you should treat it like you would an email. Do not reply or click on any of the links. Forward the text to the IRS at 202-552-1226, and if possible, include the number in a separate message. Finally, make sure you delete the original text and block the number if you can. Website If you come across a website that claims to be the IRS that you believe is a scam, you can email the URL to phishing@irs.gov. When you send the email, make sure to include “suspicious website” in the subject line. How can I further protect my private information? Online Even if a scammer isn’t attempting to communicate with you directly, it’s still possible for your personal and financial information to be compromised. In order to further protect your private information, make sure you keep your computer protected and are smart online. One thing you can do is take advantage of security software that updates automatically. This includes a firewall, virus protection, and file encryption for important data. Also, don’t give out any personal information unless it is through trusted websites. Treat your information like cash and don’t be careless with it. This includes posting about past addresses, a new home, a new car, and other life events on social media. Finally, make sure you’re using strong, random passwords that you keep to yourself. Offline There are simple things you can do offline to make sure your personal information stays safe. One thing you can do is avoid carrying around your Social Security card, or other documents that have your Social Security number included. Also, keep old tax records safely protected at your home in a safe that is under lock and key. These are records that you don’t want lying around for people to easily look at. Finally, if there are tax records that you don’t plan on keeping, make sure you shred the documents before you throw them in the trash. What should I do if I believe I have been scammed? If you believe you have fallen victim to a tax scam, follow these steps to limit the effect of the theft: First, you should determine what information the thieves compromised. This includes emails, passwords, and more personal information like your Social Security number. Next, you should place a freeze on your credit or debit card accounts. This will allow you to stop the scammers from taking any more money or records from your account. You should also place a fraud alert on your account which forces a business to verify your identity before issuing credit. Finally, reset your passwords on any online accounts. This includes email, social media, and financial sites. You should try to keep a different password for each of your accounts to make it more difficult for the scammer to access your information. If possible, take advantage of multi-factor authentication which requires a security code to log in to your account that is usually sent to your phone number. Having the right knowledge and knowing what to look out for will help protect your business and personal finances from scammers, keeping you safe throughout the year.

Every year there are changes to tax laws that may go under the radar for some 1099 truck drivers. Not knowing what these changes are may cause people to miss out on significant savings when it comes time to file their taxes. That's why we wanted to provide a few pieces of advice to make sure you aren't making the same common mistakes other owner-operators are making. Are you a self-employed truck driver that needs help with your taxes? Click here! 1. The Standard Deduction increased again, make sure to take it if it’s greater than your Itemized Deduction An estimated 90% of taxpayers use the Standard Deduction. This percentage is not expected to change due to the Standard Deduction increasing to $13,850 for single taxpayers, up from $12,950, $27,700 for married couples filing jointly, up from $25,900, and $20,800 for head of household, up from $19,400. 2. The Student Loan Payment Moratorium has been lifted Beginning September 1, 2023, payment of student loans resumed. You may be able to deduct $2,500 of student loan interest paid. The deduction is subject to income limitations which have gone up for 2023. For joint filers, the deduction begins to phase out with a modified AGI of $155,000 and reduces to zero at $185,000. For single and head of household filers, the phaseout begins at $75,000 and reduces to zero at $90,000. For married filing separately filers, the deduction is not allowed. 3. You may receive Form 1099-K The 1099-K is not likely to affect the trucking business per se, but if your spouse has a business or you have a side business you may see one this year. Many platforms such as eBay, Venmo, Zelle, Etsy, PayPal to name a few, will potentially be issuing these forms. The threshold for issuing 1099-Ks has changed from $20,000 and 200 transactions in 2022 and prior years to $600 in 2023 and future years. While the 1099-K should only be issued for business transactions, given the recent change, it is possible you could get one for reimbursing your friend for concert tickets or similar transactions. This can be corrected by contacting the issuer of the 1099-K, or, if all else fails, it can be corrected on the tax return at the time of filing. 4. There's been a key change for Retirement Income For those in, or approaching, retirement, the age for taking required minimum distributions (RMDs) has increased to 73. RMDs are required for retirement plans like 401(k), 403(b), 457(b), traditional IRAs, SEP, and SIMPLE IRAs. For those who turn 73 in 2023, you must take your first RMD by April 1, 2024. The penalty for failing to take the RMD has decreased from 50% to 25%, and that penalty is decreased to 10% for timely corrections. 5. Don’t miss out on the QBI Deduction 77% of owner-operators received a QBI Deduction for 2022 because they had a net profit. If a business operates at a loss for the year, a QBI Deduction can't be claimed. The average amount of deduction received was $7,700. As an owner-operator, chances are you will qualify for this deduction, so if you didn't take this deduction last year make sure you look into it this year. 6. Don’t Wait The most important aspect of tax time is paying tax due by April 15th. For self-employed individuals, quarterly tax payments are critical to the process of paying tax in full by April 15th. Extensions can be provided for additional time to file, however, extensions are not available for deadlines to pay your taxes. Organize and send all your tax documents as early as possible to get a head start on filing. filing.