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Hiring an employee, even a team of employees, is exciting for your business. As an employer, it’s important to be aware of your new responsibilities. In this article, we identify the key steps when hiring a new employee, setting up payroll and the necessary tax withholdings. Step 1: Forms. On the first day of employment, you will want the employee to complete form W-4. This form helps the employer determine the accurate federal income tax to withhold from their paycheck. Be sure to indicate whether you are hiring an employee or an independent contractor. This status clarifies how you withhold earnings and pay employee taxes. If you hire an employee, taxes are withheld from their paycheck. The employer provides a W-2 each January to its employees. On the other hand, if you hire independent contactors, you do not withhold tax from their earnings. The contractor is responsible for calculating and paying their own tax. Step 2: Payroll Process. There are decisions to make when it comes to payroll operations. The first thing to consider is how often you will provide a paycheck. Second, you need to determine how much you will pay in terms of employee wages. Finally, you will need to work through the taxes to withhold for W-2 employees. This process requires that you set-up an Employer Identification Number [EIN] with the IRS. Click here to learn more about the EIN. Payroll is an extremely important process and a big responsibility so you will want to find a process that makes sense for you whether it’s in-house, off-the-shelf software, or a payroll service. If you choose to manage payroll, this will require your time and a detail-oriented mentality. If you don’t have much time, you might consider outsourcing the process to a payroll company. At ATBS, we offer high quality payroll services at a competitive price. We partner with the nation’s largest payroll company giving our clients peace of mind that their payroll service will be impeccable and all filing deadlines will be met. With so many clients using our payroll services, ATBS can provide payroll services at a tremendous discount. Step 3: Payroll Taxes. When hiring a W-2 employee, you must remember the federal, state and other local laws surrounding payroll tax. As the hiring entity, you will be responsible for this. A Payroll Service can walk you through this part of the equation and ensure you are compliant. In addition to taxes, you will need to withhold a portion of the paycheck in order to cover income tax, social security, unemployment taxes and Medicare. For information on each withholding, you can speak to your ATBS business consultant. Step 4: Reporting. The earnings and withholdings need to be reported and you will want to be sure and report the following: 1. Quarterly Payroll Tax Return [Form 941] 2. Form W-2 provided to your employee[s] 3. Federal Tax Deposits 4. Form 940 or 940EZ, the annual Federal Unemployment [FUTA] Tax Return 5. Form 945, Annual Withheld Federal Income Tax Step 5: Maintaining Records. Proper record keeping is fairly straightforward and you will want to retain the W-4s and W-2s for three years on all current employees and any employee who has left. All tax filings and records of tax deposits should be stored in a safe manner and accessible by the employer for a minimum of four years. When you partner with a Payroll Service company, you can ask about record keeping as part of the service. At ATBS we partner with small business owners at every stage of their business growth, from sole proprietor to small business owner. Payroll is a natural element of business growth and can play a key role in providing your clients with the best product or service possible. Source: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Payroll-Professionals-Tax-Center-Information-for-Payroll-Professionals-and-Their-Clients

Electronic Logging Devices (ELDs) have been a heated topic lately among drivers, carriers, and the FMCSA. There are positives and negatives to each side, but the bottom line is that times are changing. Adapting to that change can be difficult, but it’s certainly possible. ELD Basics If the regulation is passed, ELDs will be mandatory for all drivers that are currently required to complete paper Records of Duty Status (RODS). Your carrier will be responsible for making sure the ELDs they provide have been registered with the FMCSA. Carriers will have 2-years from the date the mandate is passed to get ELDs installed in their trucks and ready to go. They may install them sooner rather than later to account for the extra training required for drivers during transition. Some notes about ELD and driver interaction: Driver should only log when the vehicle is stopped. Driver does not have to be prompted by the device when approaching a time limit. Driver will be prompted for entry if: If stopped for 5 minutes (will request duty status – the system will default to “on duty” if there is no driver entry). If no position is fixed at duty change (will request location). System must have a mute setting to be used when the driver is in the sleeper berth. ELDs can be programmed to alert the driver if the vehicle stops moving after 5 minutes (to confirm driving). Other automatic duty-status settings are prohibited. Roadside processes: You must be capable of producing a graph grid at a roadside inspection, or be able to print a copy of your log. There should be a one-step process for data transfer (either by web, Bluetooth, or email). The Upside of ELDs ELDs have the potential to make a driver feel as though they are constantly being watched. One positive side of this is that the driver will no longer have to fill out paper logs and worry about whether or not they are right, accurate, etc. This means less stress with tracking, and less chances for error. There will be an adjustment period, and maybe some initial frustration with flexibility. However, after a little time it could end up increasing the opportunity for a more stress-free work environment. Most importantly we have had many drivers and companies tell us that they ultimately became more productive, and drivers have made more money after ELDs were implemented. A great way to help adjust to this change is to make ELDs work for you, instead of against you. Some good advice comes from Jeff Clark – a Team Run Smart Pro with Freightliner. “Be smart and plan. If you can take your 10-hour break at a shipper, then do it. The ELogs don’t start until you start them, either with a pre-trip or by moving the vehicle. Some regular customers might even allow you to open the doors and back into a dock overnight. Do whatever you can. With ELogs you become wary of starting your day too early. You don’t want to start your clock by driving to a shipper 2 hours before your appointment and waiting. Because of the 14-hour rule I now try to be there just 30 minutes early, instead of as early as possible.” You may have to change the way you handle your day and your schedule, but it is possible to make it work! Important Reminders Be sure to download your ELDs at the end of every month and save it to your computer. Create a folder on your desktop labeled “E-Logs”, then a new folder inside that for each year. Make a habit of saving each month of your E-Logs in that folder! Carriers are only required to save your logs for the past 6-months, so it’s important to maintain these records for yourself in case of a tax audit to verify and calculate your per diem days. The ELD change is inevitably coming, but how you choose to adapt to it will truly be what affects the outcome. Go into the change with an open mind, and make the effort to think positively. It will be an adjustment, and may be difficult at times. But working on it and making the effort to be flexible will make the change a little easier. Additional information and resources: http://www.regulations.gov (docket number FMCSA-2010-0167), here is a direct link to the rule where you can comment: http://www.regulations.gov/#!documentDetail;D=FMCSA-2010-0167-0972

Losing weight can seem like a huge challenge when you look at how far you have to go to reach your goals. However, little steps will get you closer than you think, and create permanent change along the way. Here are seven small changes you can make to see big results! Eliminate one bottle of soda per day. At 240 calories/65 grams sugar(16.25 tsps) x 365 days/year = 87,600 calories/23,725 grams sugar(5931 tsps). This adds up to 25 lbs worth of calories! Walk one mile a day. You’ll burn about 110 calories, lower stress and gain energy! This adds up to 37,960 additional calories worth about 11 lbs. while also working your entire body and cardio respiratory system. Eliminate one unhealthy carbohydrate snack per day. Some examples: candy bar, chips, cookies, cake, etc. You’ll save at least 210 calories adding up to at least 6 lbs. and a lot of sugar! Do 20 push-ups a day (any kind). You will do 7,300 in a year! This is an excellent exercise working the entire upper body and abdominals. And, of course it burns a few more calories. Eliminate one high sodium food a day. At approximately 800 mg, this adds up to 292,000 mg/year. This drastically reduces your risk for high blood pressure and heart disease. Ex: soups and gravies, soy sauce and other sauces, salad dressings, salami, bacon and other cured meats, cheese, pretzels, cheese puffs, popcorn, chips and other snacks, pickled foods, fast foods, table salt, etc. Stretch for 5 minutes a day. This increases blood flow, reduces back pain, reduces stress, increase energy, reduces risk of injury, etc. Add one high fiber food a day. This will reduce your risk of diabetes, help control blood sugar, assist in weight control, clean out the digestive tract, reduce risk of stroke, IBS issues, and heal skin problems. Ex: Beans, peas and legumes, broccoli, brussels sprouts, 100% whole grain products, apples and pears w/peel, berries, dries prunes, etc. Remember, you can always get to where you’re going, you just have to take the first small step. Even choosing just two items from this list to work on each week will get you closer to your goals! For more motivation and tips, check out Rolling Strong!

As an independent contractor you are not only the CEO of your company, but the face of your business. How you come across to the people you meet on a daily basis is critical to your success. You are constantly meeting new people, making first impressions, and creating a level of trust with your clients. Whether you’re brushing up for a new business endeavor, or you’re new to the game – these tips will help you put your best foot forward! Focus on your stance. Standing tall with your shoulders pulled back will actually raise your levels of testosterone (increasing confidence), and lower your levels of cortisol (the stress hormone). Standing with your arms folded can signal that you are closed off and disinterested. Slouching or hunching your shoulders make you look defensive and lacking in confidence, so remember to stand tall! Don’t fidget. Fidgeting, from playing with your hair or bouncing your knee, can come off as though you have low confidence. I tend to pick at my fingernails or bite them when I get nervous. I now get into the habit of consciously folding my hands in my lap to still them, so that I’m not tempted to fidget. Be honest – with your words and behavior. Tell-tale body language signs of someone who is lying: hand touching, face touching, crossed arms, and leaning away. These behaviors do not instill trust, and should be avoided when meeting with a potential business partner or client. Bring it down a notch. If you tend to be enthusiastic or excite easily, you probably already make a good first impression. However, your excitement could overwhelm a client. Instead, take a deep breath and focus on bringing your gestures and excitement down a notch. Keep the enthusiasm in your voice, but stay calm and contained. This will make you look more powerful and in control. Make eye contact. Feeling overwhelmed can cause you to drop your eyes to the ground. This can convey signs of weakness and lack of respect – two things you certainly do not want to emanate when you’re speaking with a client. If you’re unsure of something and need to buy some time, smile, nod, and take a breath while you think about it. Even if you shift your glance away for a moment, just remember to shift it back before you start speaking again. This will show thoughtfulness and insight, rather than nervousness. Give a good handshake. A good handshake can leave a lasting impression on your client, just as a bad one can. It’s a great thing to start off strong with! You don’t want to give someone a limp hand (sign of weakness), or squeeze so hard you crush them (sign of over-compensation for insecurities). Smile! A smile is not only seen, but also heard. When you talk to someone on the phone be sure to smile! The person on the other end of the line will hear it in your voice. Even if you aren’t feeling terribly peppy that day, a forced smile will still sound as though you’re excited to hear from that person. They will reflect your happy outlook. Be a mirror. Studies have shown that mirroring someone’s stance or sitting position can help to establish trust. It can also create a feeling of comfort and stability. Do the lean. If you’re listening to a client when they are speaking, lean slightly forward. In contrast, if you are talking to your team and you want them to participate in the conversation, lean backwards. Your physical direction can convey either intense or open listening. Take your time. Instead of stumbling over your words or filling sentences with “um” and “uh”, pause and take a moment to decide what you’re trying to say. Take a deep breath, then speak slowly and clearly. This will sound more confident than backtracking over something you said quickly without thinking ahead. Most importantly, don’t stress yourself out by trying to remember all of these steps in the moment! Practice makes perfect, so try out each tactic during a casual social situation and see how they work. After a little while, they’ll become second nature. Sources: http://www.lifehack.org/articles/work/here-are-shocking-facts-why-your-body-language-isnt-helping-you-get-ahead-your-career.html http://www.forbes.com/sites/carolkinseygoman/2013/01/07/10-simple-and-powerful-body-language-tips-for-2013/ http://www.etiquetteinternational.com/Tips/handshake.aspx

As an owner-operator you are not only the CEO of your company, but the face of your business. How you come across to your dispatcher, your customers, and carriers is critical to your success. You are constantly meeting new people, making first impressions, and creating a level of trust. Whether you’re brushing up for a new business endeavor, or you’re new to the game – these tips will help you put your best foot forward! Focus on your stance. Standing tall with your shoulders pulled back will actually raise your levels of testosterone (increasing confidence), and lower your levels of cortisol (the stress hormone). Standing with your arms folded can signal that you are closed off and disinterested. Slouching or hunching your shoulders make you look defensive and lacking in confidence. So remember when you aren’t sitting in your truck, stand tall! Don’t fidget. Fidgeting, from playing with your hair or bouncing your knee, can come off as though you have low confidence. I tend to pick at my fingernails or bite them when I get nervous. I now get into the habit of consciously folding my hands in my lap to still them, so that I’m not tempted to fidget. Be honest – with your words and behavior. Tell-tale body language signs of someone who is lying: hand touching, face touching, crossed arms, and leaning away. These behaviors do not instill trust, and should be avoided when meeting with a potential customer. Bring it down a notch. If you tend to be enthusiastic or excite easily, you probably already make a good first impression. However, your excitement could overwhelm a customer. Instead, take a deep breath and focus on bringing your gestures and excitement down a notch. Keep the enthusiasm in your voice, but stay calm and contained. This will make you look more powerful and in control. Make eye contact. Feeling overwhelmed can cause you to drop your eyes to the ground. This can convey signs of weakness and lack of respect – two things you certainly do not want to emanate. If you’re unsure of something and need to buy some time, smile, nod, and take a breath while you think about it. Even if you shift your glance away for a moment, just remember to shift it back before you start speaking again. This will show thoughtfulness and insight, rather than nervousness. Give a good handshake. A good handshake can leave a lasting impression on a customer, just as a bad one can. It’s a great thing to start off strong with! You don’t want to give someone a limp hand (sign of weakness), or squeeze so hard you crush them (sign of over-compensation for insecurities). Here are some quick tips for having a great handshake: Reach out with your fingers together, and the thumb up and open. Slide your hand into the other person’s so that each person’s web of skin between thumb and forefingers touch the other’s. Squeeze firmly (be firm, not bone-crushing). Let the handshake last about three seconds. Remember to include eye contact and a smile! Smile! A smile is not only seen, but also heard. When you talk to your dispatcher on the phone be sure to smile! The person on the other end of the line will hear it in your voice. Even if you aren’t feeling terribly peppy that day, a forced smile will still sound as though you’re excited to hear from that person. They will reflect your happy outlook. Be a mirror. Studies have shown that mirroring someone’s stance or sitting position can help to establish trust. It can also create a feeling of comfort and stability. Do the lean. If you’re listening to someone when they are speaking, lean slightly forward. In contrast, if you are talking to your team and you want them to participate in the conversation, lean backwards. Your physical direction can convey either intense or open listening. Take your time. Instead of stumbling over your words or filling sentences with “um” and “uh”, pause and take a moment to decide what you’re trying to say. Take a deep breath, then speak slowly and clearly. This will sound more confident than backtracking over something you said quickly without thinking ahead. Most importantly, don’t stress yourself out by trying to remember all of these steps in the moment! Practice makes perfect, so try out each tactic during a casual social situation and see how they work. After a little while, they’ll become second nature. Sources: http://www.lifehack.org/articles/work/here-are-shocking-facts-why-your-body-language-isnt-helping-you-get-ahead-your-career.html http://www.forbes.com/sites/carolkinseygoman/2013/01/07/10-simple-and-powerful-body-language-tips-for-2013/ http://www.etiquetteinternational.com/Tips/handshake.aspx

Owner-operators are challenged daily with being a reliable driver and a competent business owner. For new owner-operators, owning your business and the managing the responsibilities that come with the business can be overwhelming. Take a moment to review our strategies for owner-operators to achieve and maintain business success. Being a responsible driver is not a new concept. Safety rules and regulations are always changing and even the seasoned owner-operator needs to stay informed. Here are some essential tips to stay safe and lucrative while on the road: Pre-Trip Inspections Doing this before every trip will make you immediately aware of any potential issues, and will help ensure the safety of your rig and the safety of others on the road. Logbook It’s important to keep your logbooks up to date and in compliance. It’s a DOT requirement that you keep a logbook of your driving. Your receipts and toll fees are used to corroborate your logbook so keep it as accurate as possible. Practice Safe Driving Habits Safe driving habits are essential to the performance of your truck and your business. You should always be aware and willing to stop driving when driving conditions are unsafe due to traffic, weather, etc. Getting enough rest is especially important so you are alert while driving. Choose Loads Wisely Make wise decisions regarding what loads to carry. You know your schedule and your ability better than anyone else. Never take more loads than you can reasonably handle, and always be certain the profit is worth the drive. CSA Compliance Ensure you and your rig are in compliance with all the rules and regulations –federal, state, county, and city. CSA can shut down your business and have your license revoked if you do not meet their safety standards. You can find more information on the CSA’s requirements and repercussions in these Team Run Smart articles. Personal Health Maintaining personal health is not only beneficial to you, it’s also important for your business. The CSA has a list of physical qualifications you must meet to qualify as a fit driver. You may need to be able to lift and carry on a regular basis for your business. Also, a sickness or injury could put you out of commission for awhile. Therefore, staying healthy and injury-free is an essential aspect of your long-term success. Being organized and financially responsible is imperative for success. This can be a big change for company drivers who did not have to take on the additional responsibilities listed below: Calculate Your Profit Potential Getting the most profit and operating with the lowest costs are the main priorities for any business owner. Stay educated and informed on your business performance. A company like ATBS can be a great resource to help you calculate and understand your profit potential. ATBS can provide you a monthly Profit & Loss Statement to show fixed and variable costs. They also benchmark your data against others in the industry to help you understand how your business is doing compared to your peers and highlight areas for improvement. Communicate Effectively Your customers should be kept informed of your schedule, especially if there are any changes. Unsafe conditions, mechanical problems, or other factors that can affect timing should be communicated in a forthright and professional manner. Be On Time Making all of your pickups and deliveries on time is important to your customers. A reliable reputation could make or break your business and can always influence the loads offered. Control Costs Monitor fuel usage to get the most reasonable mileage. Take care of your equipment and do regular maintenance and repairs as they arise. This can help prevent major mechanical expenses in the future. Pay Your Taxes As a company driver, your carrier was responsible for paying your taxes. As an owner-operator, you are now responsible for determining the correct amount and sending it to the IRS every quarter. To receive your maximum tax return, accurate records must be kept of estimated tax payments and to prepare your taxes. Having accurate financial records and setting money aside for taxes is an invaluable practice that will alleviate stress come tax season. Be Productive Be aware of the freight schedule and plan accordingly. Just because you can take time off, doesn’t mean you should. So when you schedule your days off, make sure you’re taking your business’ needs into account. It’s important to know what your breakeven miles are to understand how best to manage your time and schedule. Your breakeven mileage is the minimum number of miles you need to run each month to cover your expenses; everything after that number is profit. You do a lot more than drive a truck down the highway. With so many responsibilities, the role of a driver can be complicated and, at times, overwhelming. But once you learn to manage the many different responsibilities of an owner-operator it can be a very enjoyable and rewarding profession.

Working hard and doing your job the best you can are good practices to follow. However, is that all you need to do to succeed in your trucking business? There are more general business practices that should be followed to achieve success. Have a plan. A business plan is a solid foundation for any business owner. You don’t have to spend long hours and a lot of money to develop your plan, but it should contain the basics: What is the feasibility of the business idea? What can you reasonably expect in revenue and what is your cost to operate? Then determine what profit margin to expect. Know your breakeven point (or breakeven miles). Your business typically has to pay for its own costs and support your personal needs. Your business plan should communicate at what revenue point (daily, weekly, monthly, or at how many miles) you have covered all these costs, known as the breakeven point or breakeven miles. Factor in your personal costs as part of your business plan and re-evaluate costs at least every six months or whenever there is a significant change in your business or personal life. For example, consultants at ATBS work with small business owners on this process regularly and help customize their client’s plans to become their personal “profit plan.” Manage time and produce efficiently. Simply generating more business or running more miles and producing more top line revenue does not always translate to more money in your pocket. Managing your time according to business cycles will help you to predict when a slow time is approaching so you be prepared with savings to back up your business. Slow times are also good to know for personal time and vacation. Taking a vacation during a busy season is probably not a smart business decision. Keep good records and have an accounting system. Record keeping is not only vital for a less stressful tax time, but provides a good base of information to make informed business management decisions. Basic accounting statements, like a Profit and Loss Statement (P&L), compile revenue records and business expense receipts into an easy to read snapshot of your business operations. This accounting report should not only communicate the gross revenue and net income of the business but also identify strengths and weaknesses of your operation as compared to your business plan. This will allow you to place your efforts where they will have the most impact on the bottom line. Respect your customers. As a small business owner, you have complete control over your relationship with the customer. Trust is an essential element for business success. Develop trust early to watch your business flourish. Do a good job for your customers and don’t make excuses. Comply with laws and regulations. Even the most well run and profitable business can fail if its run outside of established industry laws and regulations. Many of the laws and regulations, especially in the transportation industry, seem cumbersome and can even be annoying, but they are part of every industry. Ignoring laws and regulations will affect your bottom line and possibly put you out of business quick. Work with industry experts. Seek the professional advice of business consultants and counselors within your industry. This is the best way to improve your company’s chances of success. You may be the best trucker in industry, with many years of experience, but the chances of being successful are improved dramatically when you also utilize good basic business practices.

Preparing for winter starts with a maintenance policy Fleets and drivers should always have a well-written maintenance policy in place. This policy should be specific to their vehicles, equipment, geography, distance they travel, loads they carry, time on the road and other pertinent facts. Conditions for winter travel can obviously be more challenging and safety is the top priority. In general, drivers should follow this checklist prior to any trip: Maintain proper tire pressure Monitor tread depths Watch for irregular wear Inspect suspension components A pre-trip inspection is not only important to improving safety, it is also critical to ensuring the most efficient performance from the trucks. The advantages of a pre-trip inspection include improved highway safety, reduced downtime, increased productivity and better on-time load delivery. Cold weather tire pressure requirements Tire pressure monitoring is a key component of a complete tire maintenance program. The number of tire related issues and roadside events will be significantly reduced by maintaining proper tire pressure. This ultimately results in less downtime on the side of the road. With the onset of cold weather, tire pressures will drop. It's believed that for every 10 degrees Fahrenheit the temperature falls, tire pressure is also falling between two and three psi. It's imperative to set the tire pressure prior to operating the vehicle at the onset of the trip while the tires are at ambient temperature. The ideal time to check tire pressures is during the pre-trip inspection prior to departure. Driving, even for a short distance, causes tires to heat up and pressure to increase. Drivers should always use a properly calibrated gauge when verifying the pressure of a tire and should not rely on the aspect of the tire. If the tire is 20% below the recommended pressure, it must be considered flat. It should then be removed and inspected for punctures or other damage. Failure to do so may lead to unwanted downtime. Winter treads Fleets and owner-operators know their specific operating and delivery conditions. If the fleet is located or operates in conditions that are likely to experience winter conditions (such as the Northeast, northern Plains, upper Midwest, Pacific mountains or Canada) they may want to consider a specific tire tread or a retread for those conditions. Michelin offers specific products for these conditions. The MICHELIN XDN 2 tire and the pre-mold retread, all-weather, non-directional, drive selection are optimized for exceptional traction on slippery surfaces. The MICHELIN XDS 2 tire and pre-mold retread are designed for year-round drive axle traction optimized for challenging winter conditions. Inappropriate tires in winter weather applications If during the tire inspections the driver starts to notice circumferential cutting, chunking, spin damage or tearing, these could be signs the tires are experiencing low traction conditions. The fleet operator needs to have a dialogue with the driver about the specific conditions that he is experiencing. The fleet operator should work with the dealer to discuss the appropriate tire selections for their operations. The use of tire chains in severe winter weather conditions Tire chains are often necessary in certain regions and with challenging winter conditions. Chains are often required as determined by local law enforcement. Operators should also make sure to follow the chain manufacturers’ instructions for properly mounting the chains with the correct type and size to ensure safe operations. They should also refer to the tire manufacturers’ service manual for recommended directions for both speed and duration of use. For new drivers and drivers new to a fleet, it may be beneficial for the driver to be trained on the equipment specific to the vehicle and be sure the equipment is correct for the season. This can be done in the yard when the weather conditions are fair, well before they are experiencing the challenging conditions with the weather elements. The end goal is for the driver to be comfortable with the process.

Being on time is an important part of being an Owner-Operator. After all, you are building a reputation and creating trust that you are a reliable business person. It is tempting to drive faster to get to your destination, but as a business owner and an Owner-Operator, fuel is your highest cost and something you should be watching daily. Speed is still the number one driver of high fuel consumption. You want to be on time, but you also need to know the true cost of driving faster. Example A: Here is the cost for driving 120,000 miles and sacrificing one mile per gallon by driving fast. If you get 6.0 miles per gallon = 20,000 gallons of fuel to purchase and pump into the tanks. If you get 7.0 miles per gallon = 17,143 gallons of fuel to purchase and pump into the tanks. This is based on the average of $4.15 per gallon x 2,857 extra gallons of fuel= $11,856 extra costs for getting 6 mpg instead of 7 mpg. Driving fast does not just burn more money in fuel. Below are the additional costs for driving fast. Maintenance. Increasing your speed means increasing your cost for maintenance. As speed increases, you automatically increase wear on the brakes, tires, engine and suspension, plus the cost of downtime for repairs and maintenance. The cost of this extra maintenance could easily be one cent per mile for a total of $1,200. Given the increased fuel cost, plus increased maintenance costs, the total additional cost is $13,056. Engine. You can only run so much fuel through an engine before it wears out. The life of an engine is limited by the amount of fuel it will burn. And it’s proven that the faster you drive the more fuel the engine will consume on a per-mile basis. So the faster you drive, the faster you wear-out your engine and this one thing alone could exceed one cent per mile in costs. Tires and Suspension. Sometimes you can find a smooth road, but very few of our roads and highways are without bumps, potholes, cracks, and seams in the surface. Higher speed means a greater impact on tires and suspension when rolling over bumps, cracks, and seams in the pavement. More impact = more or faster wear on a per-mile basis. More impact = shorter life for tires and suspension. The main enemies of a tire are heat and impact damage, and you will have more of this damage with higher speed. Heat from under-inflation is probably the single biggest hazard to a tire. Brakes. The higher the speed, the more brakes have to be used. The more often brakes are applied and for a longer duration will mean the brake pads need to be replaced more often. Lower speed = lower brake usage. Also, it’s more likely that a “hard stop” or “panic stop” will occur at higher speeds. Only one or two hard stops are going to cost money in tires and brakes and it’s not uncommon for aggressive drivers to have one or two hard stops per day. There might be a time when you must drive fast to be on time, but what is the true impact? Fill-ups. The average fill-up is 101 gallons, according to a study conducted of ATBS’ Owner-Operators. The average time needed to fill-up is 1 hour. Twenty-eight extra fuel stops are required x 1 hour each = 28 extra hours to replace the extra fuel burned. So the faster you burn fuel, the faster you have to replace it. Talk about diminishing returns! How much speed does it take to replace $13,056 and 28 hours? The faster you drive, the faster you have to replace the fuel and the faster the wear on your tractor and tires. There’s no argument that driving faster can save time, but what’s the trade-off? Example B: If you drive 450 miles at 75 mph, you will save about 1.5 hours of time versus driving at 60 mph. However, fuel economy will suffer at the higher speed and the difference is usually about 1.5 MPG when comparing 75 mph and 60 mph. The engine burns an extra 1/10 of a gallon of fuel for every mile driven over 55 mph. The difference between 60 and 75 mph would then equal 1.5 mpg. This would cost you 20 gallons of extra fuel or $83 of extra cost when fuel is at $4.15 per gallon. This calculation is an industry standard and is set by engine manufacturers. This formula is also found in the “Cummins MPG Guide.” Add the extra maintenance cost of a penny per mile and the total cost is now $87.50. Is the 1.5 hours worth $87.50 to you? You’re the best person to decide, of course, but don’t think speed is free. The extra time saved will cost you something for driving faster. How do you spend the extra time gained by driving fast? Did you get repaid for the extra $87.50 you spent? Is it ever more cost effective to drive faster? If you are on a “loose” schedule by all means slow down to the optimum road speed to conserve fuel. There is a balance between speed and the cost but speed isn’t cheap and it’s not free! Example C: Suppose you have a pick up in Chicago on Thursday afternoon to be in Omaha Friday morning. That’s 500 miles basically overnight. Very doable but the driver cannot be late because the consequences of a late delivery (or being at the back of the line for trucks delivering) are too great. Consequences like laying over from Friday to Monday will cost you about $300 in just fixed expense alone. The layover cost in this case is more than ALL of the fuel cost for the entire trip. There are other financial penalties beyond layover cost so the driver would be wise to operate at the higher but less fuel efficient speed to safely insure delivery with no chance of layover in Omaha. The speed limit across Iowa on I-80 is 70 mph while the most fuel efficient speed might be around 62 mph. Driving at 70 mph would cost the driver about 8/10 of a gallon of MPG for the trip or about 10 gallons of extra fuel consumed between Chicago and Omaha. Ten gallons of fuel is probably a good trade-off to make in some circumstances. You control your truck’s consumption of fuel. There may be special circumstances that will be more cost effective for you to drive faster, but this is not common. Carefully manage the balance between your speed and the many costs of increasing your speed so you save the most money possible.

If you’re bringing in a lot of revenue, yet at the end of each month there is little money left in the bank, you’re simply spending too much. Every expense should be subjected to this simple test: Is this purchase something that’s truly necessary and do I need it? Or is it something I want? Think back to a few years ago when your income was probably a lot less than it is now. If you got by then, you can certainly do it again. The first step is creating a budget and it is important to include your personal expenses. If you aren’t currently tracking your personal expenses, this could be a great New Year’s Resolution for 2014! At ATBS, we think of a budget as a profit plan, the best tool to keep expenses from exceeding your income. A profit plan should show a full picture of your spending history. Really diving into your personal spending habits could show that little things like eating out everyday is cutting into your total net cash, or big items like vacations, holiday shopping, or a new car is the issue. Personal expenses must be included in your profit plan. When all of your truck expenses are paid you should spend no more than 60% of your net income on these things. For example, look at the chart to the left showing “Joe Trucker’s” Profit Plan. If your monthly income is $4,200 after you’ve paid your business expenses, then the most you should spend on personal expenses is $2,520. 40% or $1,680 should be divided into a retirement fund, a savings account for taxes, and finally some should be used for fun! ATBS recommends dividing the leftover amount into four amounts ($420). Every month, put $420 into retirement, half ($840) into taxes, and spend $420 at your leisure. If there’s a big gap between your net income and your lifestyle, consider changing some things in your lifestyle: Quit smoking. The American Lung Association says that the average cost of a pack of cigarettes in America is $5.51. If you smoke a pack a day, that’s about $2,200 a year wasted on something that is bad for your health and will likely cost you much more in medical bills down the road. Sell unused vehicles. If your family can get by with one personal vehicle when you are back home from on the road, sell your extra vehicle that sits in the driveway most of the year. Eliminating a $500 a month car payment can save you $6,000 a year, not to mention the insurance costs! Housing expenses. Many people are switching from an expensive cable or satellite package to watching Netflix or Hulu. Spending $10/month for one of these online services is a lot cheaper than a $100/month Comcast bill. Find the cheapest insurance . Get competitive bids on home and auto insurance at least once a year. Insurance rates tend to creep higher without being noticed. Try to diminish credit card debt. Credit cards should be used as cash management tools, not borrowing tools. The average American household owes about $15,000 in credit card debt. The national credit card interest rate is 14.95%. That’s about $2,240 wasted every year in interest. To lower your debt, you can temporarily use some of that retirement fund or leisure money. Every dollar you don’t pay in interest is like a guaranteed risk-free and tax-free return on your money. There is a wide range in how much people at the same income level can save. It simply comes down to your spending choices. As a client of ATBS, you already have a profit plan created for you! Call your business consultant at (866) 920-2827 if you would like to review your personal expenses and receive advice on how you can cut back on personal expenses. Increasing your total net cash in 2014 is a great New Years Resolution that will help you and your trucking business long term. Remember, it’s not how much you make, it’s how much you can save that counts!

Traveling for business can be exhausting and traveling for pleasure can be expensive. Knowing the rules that affect tax deductibility can help you combine business with pleasure and maintain the tax deduction of your trip expenses. Travel expenses are deductible when business needs require you to leave home for business or investment purposes as long as the expenses are ordinary and necessary. The cost of transportation, meals, gratuities and lodging are examples of allowable deductions. Meals and entertainment are subject to a 50% limitation as a tax deduction. Expenses relating to the management of an investment are deductible. Keep in mind, the deduction for investment seminars and conventions on a personal return has been eliminated. Additionally, travel as a form of education is not deductible. When you have to travel for business you have a unique opportunity to wrap some leisure time in with your business travel and still deduct much of the cost of your trip. You can wrap personal days around business travel or vice versa. As long as the primary reason for the trip is business, transportation costs are deductible. Transportation costs include airfare, train, taxis and shuttle costs. These costs are always deductible as long as the primary reason for the trip is a business purpose even if personal interests are pursued while on the trip. The key to deductibility is to be sure that your records support that the time spent was primarily spent conducting business. What is the criteria for defining a trip as primarily business? The IRS will look at the length of time spent conducting business versus time spent on personal endeavors. While there is not a hard and fast rule established by the IRS, one week working and three weeks playing would not pass the test. Traveling for a business meeting that lasts a couple of days and includes a couple of days leisure time however would. In the event you take a trip that is more personal than business you may still deduct auto mileage rental car for the days of the meeting, lodging the night before the meeting and subsequent night stays while still attending meetings. Meals are also deductible during that time frame subject to the 50% limitation on the meals. There are ways to write off the entire cost of your trip if you can show that by extending your stay actually saved you money. The easiest way to accomplish this is to wrap in a Saturday night stay as this usually reduces airfare significantly. As long as the expenses for the personal days are less than the airfare savings achieved by lengthening your stay you can justify writing off all of the travel, meals and lodging. Expenses for your spouse or companion are not deductible including any additional charge for a double room. Purely personal items such as entertainment and cab fares over the weekend stay are also excluded. Travel costs for your spouse or companion generally are not deductible unless the spouse or companion is an employee of the firm. The cost may still be deductible however by the companion or spouse if they have a legitimate business purpose for their trip. In the situation where the companion or spouse is self employed they may be able to conduct a legitimate business activity during the trip that would allow for them to take the deduction for their portion of the travel and related costs. Who can be entertained and when is entertainment deductible? Generally you can deduct the cost (subject to the 50% limitation) of entertaining customers, prospective customers, employees, agents, partners or professional advisors if your records are adequate. How can you ensure that your entertainment expenses are legitimately deductible? If you follow these simple rules you can ensure that your entertainment expenses are in fact legitimately deductible: The entertainment expenses are “directly related” to the taxpayers trade or business—meaning, they occurred in a business setting. The expenses are “associated with” the taxpayers trade or business—meaning, the entertainment was preceded or followed by a bona fide business discussion that occurred on the same day as the entertainment. The taxpayer had more than a general expectation of deriving income or other specific benefit from the activity. The taxpayer engaged in business during the entertainment period. The principal aspect of combined business and entertainment was business. I am an employee—when can I write off travel costs? If you are not reimbursed by your employer for your travel costs you can deduct meals subject to the 50% and the remaining travel expenses will be subject to 2% of your AGI. What records do you need to keep to support your tax deductions for travel and entertainment? In order to maintain and support the deductibility of travel costs you must maintain adequate records: Travel records must detail the amount of each separate expenditure Notate the dates of the trip and the number of days spent on business Notate all travel destinations Substantiate the business reasons for the travel In addition, entertainment deductions must also be supported with adequate records: Detail of each separate expenditure Date of entertainment Location and type of entertainment Business purpose of entertainment Names and occupations of individuals being entertained, showing the business relationship These general guidelines can help most taxpayers determine the deductibility of travel expenses. If these guidelines do not address your unique situation, contact your ATBS tax professional to get more specific advice.

Did you know that almost everything you own, whether it is personal or business, is considered a capital asset? Examples of personal capital assets are: home, recreational vehicles, stocks and bonds. Business assets include but are not limited to: buildings, tractors, trailers, and other business equipment. When a capital asset is sold, the difference between the original cost basis and the sale price may be a taxable gain and reported on the year-end tax return. Remember all capital gains must be reported. However, personal property losses cannot be deducted, only investment property (i.e. stocks, bonds, rental property, etc.). When thinking about selling a capital asset the taxpayer should determine what the tax implications will be. The following are some tax strategies that may help you in planning for the tax year. 3.8% Net Investment Income Tax (NIIT): In 2010, under the Health Care and Education Reconciliation Act, high income taxpayers will be subject to an additional 3.8% Medicare tax beginning in 2013. Taxpayers with Modified Adjusted Gross income (MAGI) over $200,000 ($250,000 for married filing jointly and $125,000 for those filing married filing separate) per year may owe the new Medicare tax. Many of the strategies that can help you save capital gains taxes can also help you save the on the additional Medicare tax. Use losses: Capital losses can offset capital gains. Consider selling any assets that are currently at a loss and are unlikely to appreciate, in order to use the loss(es) against any capital gains you had during the tax year. If your capital losses exceed your capital gains, then your capital loss is capped at $3,000 and the remaining loss is carried over to subsequent years. Hold onto the asset: Short-term assets are any assets that have been held for one year or less. Conversely, long-term assets are any asset held for more than one year. If you consider selling your short-term assets, keep in mind the gain from the sale will be subject to ordinary income tax rates and not capital gain rates. The current maximum ordinary tax rate is 39.6%. The long-term capital gain tax rates are 15% or 20%. Increasing the holding period of an asset from short-term to long-term will reduce the taxes imposed on any gain from the sale of that asset. 0% tax rate: Lower income individuals may have a 0% tax rate on long-term capital gains. If your taxable income falls within the 10% or 15% tax bracket, it may make sense to sell the long-term capital assets you’ve been on the fence about. Like kind exchange: If you’re debating selling a business asset, consider instead to trade the asset for a like-kind asset. Generally, the capital gain from the sale of an asset will be deferred if the asset is traded for another asset in a like-kind exchange. Tax planning is about looking at the big picture. It’s about looking at all your investments personal and business and adjusting the treatment of each business or investment property. Remember to make your investments work for you not against you.