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Whether you're working with first-time lease-purchase independent contractors, or small fleets with their own operating authority, having the right tools in place will make sure your program starts and stays successful. Oftentimes, you hear horror stories about predatory lease-purchase programs or carriers taking advantage of independent contractors (ICs). Throughout our 23 years in business, we’ve found that the most successful carriers with the lowest IC turnover, are the ones that truly set their contractors up for success. Make money from them hauling freight, not from nickel and diming them to death with fees! 1. Communication Communication is the key to success in any business setting. This starts before the prospective contractor is even in the picture with recruiting. Giving false information to get folks in the door is a recipe for disaster. Expectations of miles, take-home pay, and benefits, need to be clearly defined. Any embellishment will quickly be turned into a negative thought, which means everything they’ve been told is now met with skepticism. The next step is having the exact same message in orientation. Orientation is the first live look at the carrier and how things operate. Orientation must be well organized, clean, and to the point. A communication network for support must be very clearly defined and driven into the IC’s mind so that they understand it is there! We also often hear about monthly or quarterly IC calls where folks can express concerns or frustrations to office staff. Sometimes a cure to woes is just having someone listen to the IC’s issues. 2. Successful Partnerships One of the hardest things about IC success is making sure you don’t cross the IC vs employee line. That is where 3rd party vendors and partners can make all the difference! At ATBS, we save contractors time, stress, and money while letting them do what they do best… deliver freight safely! Most ICs aren’t the best business people, that's why we give them: A dedicated Business Consultant for unlimited advice and help A budget that helps them understand daily fixed costs, tax-saving advice, and a break-even point for business and personal expenses Bookkeeping Monthly interactive P&Ls to help make informed decisions Industry Benchmarking Quarterly Tax Estimates Tax Preparation and Filing An app to submit receipts Secure Online Portal You can also look into insurance and retirement partnerships. Benefits are more important than ever right now. With rising healthcare costs and increased cost of living, ICs need to know they have the options to make an investment in retirement and their health. 3. Safety Incentives Safety is a huge cause for turnover, that is often overlooked. Don’t lose the good capacity to unwarranted safety incidents. We often hear of programs that incentivize with safety bonuses. The common ones you hear are paid based on certain intervals without any incidents (Eg. 50k miles, 100k miles, etc). You also hear about safety bonuses based on low percentages of time speeding. Another safety incentive that is being elevated recently is one based on onboard cameras. There have been countless nuclear verdicts in recent years, and onboard cameras can be a huge tool to help in a lot of cases! 4. Pay Full Fuel Surcharge This one is a HUGE topic for ICs. This goes back to the idea that you need to make money off of freight, not from the ICs themselves! We all know our IC’s talk, and one of the most common things they discuss is a carrier, and how they pass on costs and revenue. Not paying 100% of the fuel surcharge has become extremely toxic and ICs will avoid fleets not paying the full amount based on that idea alone. 5. Flexibility The number 1 reason a truck driver takes the next step to become self-employed is FREEDOM. They make this step so that they can control their own destiny, and have the opportunity to make more money. It’s that simple. It seems obvious, but that means you need to give them the chance to have a profit or loss. This means no forced dispatch. No IC wants to be told this is what they have to do. They need load choices, a load board if you can support it, or just the ability to say no. Fleets that do have the ability, should consider a load board for freight choice. This has become significantly more popular over the last few years and continues to expand in this booming freight market. As a fleet, you need the company driver capacity to cover lanes that the ICs tend to not run, so this isn’t for everyone. Lastly, the ability to have riders and pets seems to be a make-or-break for a good portion of the ICs. If you say no to riders and pets, you’re eliminating a big part of your recruitment pool! 6. Discount Networks It feels like we are beating a dead horse, but passing on your fleet discounts to your ICs is a no-brainer! Make money off of freight, not your ICs! Fuel - Your ICs biggest cost. Make sure you pay the full fuel surcharge and you pass on the same discounts your company drivers get! A profitable IC lowers your turnover and runs your freight. Both of those are very important! Maintenance - Your IC's 3rd biggest cost. Make sure they are aware of your network and how to utilize it. Like the driver shortage, there is a maintenance tech shortage and labor rates continue to go through the roof. Use your purchasing power and leverage to help maintain your fleet! This goes for tires as well! 7. Create a Driver Career Path You don’t hear of this as often as you’d think. Some folks come into the industry looking for a clear career path to help better their lives, lower their stress, and keep making more money. Trainee - Not every fleet has this ability, but utilizing the communication idea with a career path from day 1 can help you develop ICs that know your company, your system, and how to be successful. Company Driver - If you couldn’t start as a trainee, start here for developing your IC program. Make it an option as a clear career path opportunity. This should be part of your recruiting pitch and known throughout the organization. Some fleets even require new hires to pull company freight for 3-6 months before they become an IC. This allows both the carrier and the driver to have an extended job interview to make sure all parties are the correct fit. Lease-Purchase - This isn’t for every carrier, but this is often the stepping stone from being a company driver to being an IC. This can be operated in-house, but there are numerous companies that supply trucks for an LP program. The best LP programs make sure the IC has some sort of down payment to have some skin in the game. They also utilize companies, like ATBS, to make sure these first-time business owners get the help they need from day one. Hired Gun - This is a true IC with their own asset who is driving under your authority. Sometimes it’s from paying off their LP truck, sometimes it’s from saving up for a down payment at an outside vendor. Have a network in place where you can refer them to in order to make that purchase! *Please note that any of these changes should be evaluated by a legal team. These are just a few of the things we see from carriers with successful IC programs. If you have any questions or would like to discuss any of these topics in more detail, please feel free to reach out to us.

We often get asked about the most overlooked tax deductions. Because owner-operators are responsible for calculating and paying their own taxes, they are also responsible for deducting expenses, which can significantly lower their tax burden. While the IRS does not conveniently list every deduction possible for an owner-operator, we are here to review and advise clients on their tax returns. In this article, ATBS looks at commonly overlooked tax deductions. One area of commonly overlooked tax deductions is the internet, smartphones and other devices. These gadgets are quickly becoming an integral part of the owner-operator’s world. You now have a license to play around on the Internet and find the tools and apps that are most helpful to owner-operators -- especially now, since you can write-off the costs associated with these tools! Write-Off 1: Smartphone Apps There is a growing list of apps that owner-operators rely on to make their life and business run smoothly. From Cat Scales App to Load Boards and from the Pegasus Smart Phone Scanning to TA Petro’s TruckSmart App, the list is growing! Any and all costs associated with apps can be claimed as a business expense on your tax filing. Just be sure to keep a record of your purchase and the costs associated with them so you can easily write them off at tax time. Write-Off 2: Business Portals Businesses that offer owner-operators a secure, online portal where you can access scanned receipts, review your profit and loss statement, obtain tax estimates, and review your profit plan [aka, your budget!]. The cost to have business at your fingertips is deductible so be sure and consider this when approaching a business partner who can manage your taxes, accounting, and your online portal. Write-Off 3: Internet Costs If you are able to bring Wifi into the cab, this cost is a tax deduction. Consider investing in the ability to have Wifi in your sleeper giving you the chance to be productive at the end of your day or the end of your route. Many owner-operators opt to create an office in their truck’s cab and can offer advice as to the set-up and organization. Write-Off 4: Devices Today’s mobile technology is more affordable than ever and owner-operators are investing in tablets, Smartphones and laptops for their business that takes them on the road. The cost of these business tools are a deduction so you’ll want to save the receipt and send them to your tax preparer who can use this to lower your tax liability. Technology today can be fun and importantly, smart for your business success. Owner-operators are on the road a lot and they are in an excellent position to invest in and write-off technology tools. At ATBS, we analyze our clients' expenses and help drivers take every legal tax deduction they are entitled to. Give us a call at 866-920-2827 to speak with an enrollment specialist who can set you up with tax services from ATBS.

Creating a fleet is no small task. With careful pre-planning and inside knowledge, drivers can grow a fleet and build a successful business. In order to do so they need to prepare their personal and business finances, arrange loads, prepare for maintenance costs, find the right talent, plan a business structure, and get the right truck(s). By taking the proper steps, you too can start to build your own small fleet trucking company. Here are some of the first steps to take: Know your credit score It is important that every business owner understands what their credit score is, especially if they are looking to get a loan to grow their business. Some things that can impact credit scores are the amount of debt you owe, and if your payments have been made in a timely (or not timely) manner. Many businesses have an entity with an Employer Identification Number (EIN) that they have taken time to build credit for the business. One can get a business line of credit or opt to get a business credit card, but keep in mind that the owner’s personal credit will impact the business credit as well. Owners can check credit once a year for free using https://www.annualcreditreport.com, which checks Transunion, Experian, and Equifax. If there is an entity set up, check with Dunn & Bradstreet to see the business credit score. If you need some great tips on how to boost your credit rating, check out this article. Know where to get loads Another thing to be prepared for is where to get your loads. Owners either operate under another carrier's authority, or set up their own authority. Loads can be self-brokered from boards online, but be careful of the pay, as it is often times lower on the online boards compared to brokered loads from carriers, etc. Know how to collect the check When creating their own authority owners will want to make sure that they have the ability to operate for up to ninety days without payment. Many self-brokered loads can have the potential of lengthy time between receiving pay. There are several payment services that will allow you to be paid for loads after completion, but be careful as many of these services will take a percentage of the payment. Know what to do when a truck goes down When operating several trucks, it is a good idea to make sure that fixed costs are covered for the fleet in the event that one or more of the trucks are sidelined due to maintenance or staffing issues. If there are loan or insurance payments, they will have to cover all fixed costs until that truck is back on the road. This is part of the reason that many small fleet owners often decide to have between one and five trucks; because if there are five trucks there is a good chance that any expenses for a downed truck is covered. In order to protect themselves, owners should be sure to plan ahead for covering fixed costs in the case of a sidelined truck. Know how to find drivers Owners can't drive more than one truck at a time, so how do they find another driver that they can trust to take the wheel? How do owners make sure that they are taking care of their investment? Often times it’s best to find a driver before finding a truck, and maybe even bring them on as a co-driver first. This gives them a good idea on how they drive, and what working together will be like. It also gives owners the opportunity to teach and correct any issues, before putting someone behind the wheel of one of their trucks. Know how to pay drivers It is recommended to decide ahead of time if drivers will be independent contractors or employees for tax purposes. Referring to guidelines set by the IRS can help. Publication 1779 outlines what the IRS looks at to determine whether or not a driver is an employee. You can find some great guidelines for how to set up payroll for employees by reading this article. Employee Drivers If your drivers are employees, owners are required to withhold taxes from their paycheck and pay part of their Social Security, Medicare, and FUTA (unemployment taxes). ATBS can assist with handling payroll needs. Independent Sub-Contractor Drivers If the driver is an independent contractor, you will need to issue a Form 1099 and 1096 at the end of the year. Independent contractors will be responsible for their own taxes at the end of the year, and need to pay quarterly tax estimates to avoid penalties. You will want to use voided checks or a handwritten receipt to document payments to these drivers to have accurate records at the end of the year. Consider if you will pay drivers by mile, or percentage of the load – as well as if payment will be calculated before or after truck expenses are taken out. Know how to create an entity Many truck stops have signs about forming an entity, but what does that actually mean, and is it really necessary? Every state has different rules as to how an entity is required to run, but owners are typically better off by forming entities where their permanent home and tax address is located. There are several options as to what type of entity can be formed such as a Partnership, S Corporation, C Corporation, or an LLC. ATBS can assist in forming an entity that is right for your business. This article breaks down the different business structures, and goes into more detail about the benefits each type of entity can provide. Know where to look when buying trucks There are many places to find trucks such as http://www.truckpaper.com, which lists trucks for sale across the nation. This website provides a good idea of what is currently available in the market, and what current prices are. When considering purchasing additional trucks, check that your credit is in order to ensure you have enough money for a down payment. Know what to look for when leasing trucks Often time-leased trucks will come at a premium, but if an owner has poor credit this may be a viable option for expanding their fleet. Be sure to check the terms of the lease, and ask questions. Can you add upgrades to the truck, such as an APU? What type of lease is it? In the event that operations stop, can you walk away from the lease? If so, are there penalties? Overall, there are many questions that will need to be answered when growing a one-truck business into a fleet. Take the time to learn best practices, and ensure you will be able to run the most efficient and profitable fleet possible. A successful business is built on good planning and education.

The following article is an exerpt from Build Your Businesss: An Owner-Operator's Guide to Success PURCHASE A COPY OF THE BOOK Successful owner-operators know that simply running hard is not enough. If it were that easy, anyone could do the job and expect the profits to roll in. Understand it pays to slow down and that there is a trade-off in higher costs, not to mention the increased risk, for driving fast. If driving slower takes time away from you, you can find ways of managing your time to get some of it back. For example, you can take vacation time or plan major work on your tractor during the first week or two of the quarter (early January, April, July and October). Never take time off during the last two weeks of the quarter (or the last week of the month), when freight typically is abundant. Sometimes it works to your advantage to look for loads that take you “through” home rather than “to” home. The latter can interrupt your revenue stream and require additional time to get back up to full speed again. As an owner-operator, you should look at time off differently from a company driver. If a company driver takes a week off, he loses only the opportunity to make a weekly paycheck. When an owner-operator takes a week off, he has fixed expenses to pay and won’t be earning a paycheck. When he returns to work, he not only has to replace the lost income, he also must quickly cover the fixed expenses that were spent during his time off. For example, for an owner-operator with fixed costs of $100 per day, seven days off would cost $700 in payments that still have to be made. Though truly long-haul work remains the bread and butter of many an owner-operator, opportunity in regional- and short-haul work continues to expand. Average length of haul has declined markedly in dry van and, increasingly, in refrigerated. Shorter hauls take more time, and they cost more money on a per-mile, per-load basis. While carrier pay packages adjust to shorter hauls with premium per-mile rates or other compensation tactics, they’re not always quick to follow the freight trends. As freight regionalization continues to hit other segments, close work on the part of owner-operators and their customers and dispatch assumes much greater importance in maximizing income. THE SUCCESSFUL OWNER-OPERATOR’S DAY PLANNER Smart owner-operators make every single week as profitable as possible. One trip is not enough time to be considered profitable or unprofitable, and an entire month may be too much time to manage. One week is the right amount of time to deal with efficiently. To do so, look at the advantages and disadvantages of every day of the week. Match trip length to the optimum day of the week. Plan to deliver on the day you have the best opportunity of getting a load. Plan to drive under a load on days when it typically is harder to get a load. Your plan will vary depending on the weekly delivery/flow cycle of your region, typical length of haul, personal requirements and other factors. The needs of customers and dispatch have to be considered and often will determine how your time is used. What’s important is to have a specific weekly plan that helps you be successful. SUNDAY: It’s like getting in an extra day if you can pick up or deliver on Sunday, since this typically isn’t a day for either task. Being able to make the most of Sunday gives you a good head start on the week. MONDAY: Profitable owner-operators deliver on Monday. Why? Delivering the first load of the week on Monday lets you start your week with miles already generated and leaves time to be profitable during the rest of the week. On Monday you’ll find more load opportunities than Tuesday, too. TUESDAY: Unless it’s a 2,000-mile trip, delivering the first load of the week on Tuesday means the week usually won’t be profitable. Tuesday is the day to take a hard look at how many miles you have driven and how many more you need to have a profitable week. WEDNESDAY: It’s hump day. By now, about half of your gross revenue for the week already should be in hand. THURSDAY: This can be the make-or-break day of the week. A load picked up on Thursday should either be short enough (less than 600 miles) to deliver on Friday, or provide enough miles (at least 1,600) to carry you through the weekend. Try to average 550-600 miles per day for the trip, although on Thursday it’s almost always better to take a 350-mile trip and deliver it on Friday. Turning down a short run just because it would mean laying over until Friday is an expensive mistake. FRIDAY: This usually is the best day of the week for freight. Being under a load with the longest possible miles over the weekend will make the best use of your time. SATURDAY: The week is over, and your work and planning should have resulted in a profitable operation. But like Sunday, Saturday is an extra day if you can pick up or deliver a load. Many an independent owner-operator has realized high freight rates by being the 911 service on the weekend for a trusted broker. If you’re using load boards on the spot market and can make yourself available on Saturday or Sunday by posting your truck, you might be surprised by the good results. A variation on the day planner specifically related to spot market rates is available via Overdrive’s interactive rates tool at OverdriveOnline.com/rates. Find highlights on the adjacent page. Data there is derived from the Truckstop.com load board’s collected rates in year 2014, analyzed by the service and Overdrive. Increasing Efficiency Make the most of your waiting time, such as while loading or unloading, getting your truck washed, stopping at the scale house, etc. Take care of your rig. Check your tires and lights, and clean windows. Review maintenance records. Take care of yourself. Take a walk if you can leave the rig. If you aren’t able to leave, do stretches or exercises in the cab. Answer mail, write letters and pay bills. Cook a healthy meal in your microwave, or read a book. Plan ahead. Wipe off reflective tape while waiting or while doing a pre-trip; you’ll be more visible and invite fewer inspections. Organize any clutter, especially on top of the dashboard; a cluttered dash is an open invitation to be inspected by law enforcement. Update your logs, especially the recap; not maintaining the recap is a major reason why operators unexpectedly run out of hours – a situation that is expensive and frustrating. Otherwise, follow these steps for maximum efficiency. Deliver on time. If you deliver late, the consignee may assign your dock door to another driver and put you last on the list. Delivering 15 minutes late can cost a whole day or even an entire weekend. Deliver as early in the day as possible so that you have a time cushion to get dispatched to your next load. On appointment loads, deliver 30 minutes early. An empty trailer gives you plenty of options, but a load sitting on your trailer gives you only one option – waiting to deliver. You have to manage the cost of fuel and fuel taxes, as well as the cost of time to fuel, which usually is about 45 minutes per stop. The typical owner-operator carries 200 gallons of fuel or more but buys only 100 gallons at a time. Often it saves time to put 175 gallons in the tanks instead of continually topping off with 100 gallons or less. Plan your trip and work out the timing in advance. Ask for directions to every stop, or use mapping software such as ProMiles software or the many truck-specific GPS units now on the market from Rand McNally, ALK Technologies, TomTom, Garmin and others. Use the fuel/route-optimization tools at fuelsurchargeindex.org as well. Try to depart early, especially when winter weather poses potential delays. Leaving late is the major reason for service failures – such as running out of hours on the morning of a delivery. Be prepared to deadhead instead of laying over. The time and money lost to a layover can almost never be made up. If the deadhead can get you to a good load within 24 hours, it might make sense. If you’re leased, don’t surprise your fleet manager. Keep him or her informed of every detail that affects service and your schedule. Set a personal and reasonable goal each week for the miles you want to run and tell your fleet manager or dispatcher. Work with him or her to improve your miles and revenue. WANT TO LEARN MORE? PURCHASE A COPY OF THIS BOOK!

Do you know any truckers whose CPA set up a corporation for them right when they started their business, who then had to close it down a year later because it didn’t make sense for their situation? Or, maybe it made sense to set up the entity - like an S-Corp - but their CPA didn’t tell them they needed to utilize payroll services to take advantage of the tax benefits. Or, maybe their CPA established a partnership for their business without coaching the driver on the importance of a strong operating agreement… and the driver paid the price when their partner left the business and hung them out to dry. These situations are very common in trucking, but they are also very easy to prevent with a little planning and some trucking-specific knowledge. At ATBS, we speak to owner-operators who paid the price for bad advice about setting up an entity for their business nearly every day. Today, we’re going to highlight some of the most common mistakes CPAs make for their owner-operator clients and how those mistakes can hurt a driver’s business and income. We are not lawyers, and so we won’t (and can’t) give any legal advice related to business structure. However, we are a tax company, so we’ll highlight how these mistakes impact the taxes of your business. We’ll also talk about some general, non-legal issues that we tend to see, and we’ll talk about some common solutions for those as well. If you find yourself falling into any of the categories we’re about to discuss, it might be time to think about vetting a different tax professional for your business. The business structure you choose is incredibly important, and it’s also fairly simple to get it done the right way. If your tax professional made a poor decision about your business structure - before they ever even touched your taxes! - that’s a red flag that shouldn’t be ignored. Ready to learn more? Let's discuss some common mistakes CPAs make regarding setting up business structures for owner-operators. First things first, if you are unsure about the differences between LLC’s, Partnerships, C-Corporations, and S-Corporations, please stop reading and go check out our article regarding Owner-Operator Incorporation to learn more about the different structures and which one may be the best fit for your business from a tax standpoint. Mistake 1: CPA sets up an S-Corporation for a driver as soon as they start their business. Why is this a mistake? Simple: You should wait until you get a full 12-months of experience - and 12 months of income - while operating your business before you establish an S-Corporation (or, an LLC elected to be taxed as a Subchapter S-Corporation). We believe it’s critical that you have a full 12-months of income to review prior to making this switch in your business structure. The reason is, it’s expensive to keep an S-Corporation open each year! You have annual State fees, additional annual tax filing fees, and extra fees related to running payroll for your business each month. Those fees add up quickly. Every business has a breakeven point where the money they save in taxes by using this business structure is more than the cost to use this business structure in the first place. Until you know for sure that you will save more than you spend, we recommend waiting to choose this structure! Don’t let a CPA tell you that this structure is right for you unless they can run the numbers based on your actual business income and show you the tax savings! If they push you into this type of business entity without hard data to back it up, that’s a major red flag. For new owner-operators especially, you have enough on your plate just learning how to run your own business in a profitable manner. You don’t need the added stress of an extra level of business structure complexity. Perhaps a sole proprietorship or LLC will fit your exact needs! Mistake 2: CPA sets up an S-Corporation for a driver, but doesn’t help them run Payroll. If you are trying to save money on your taxes by operating your business as an S-Corporation, you must run payroll! If you want to learn more about why, here is an ATBS article that explains why payroll is required. The single biggest risk you can take as an S Corp owner-employee is to take no salary at all! It is relatively simple for the IRS to develop a report of 1120S tax returns with no owner’s compensation that also have net profit or distributions, which means it’s hard to hide from the IRS if you aren’t paying yourself a salary. This is a red flag for the IRS and creates an easy court case for the IRS to win if you happen to get audited. If a CPA recommends a S-Corporation for your business structure but doesn’t educate you on using payroll, it’s another major red flag. They either: A) Don’t know you need to run payroll (lack of knowledge) OR B) Just want you to pay them to setup the S-Corp and aren’t concerned about how you operate it (not concerned with your future success or failure) If you thought filing income taxes annually was an added layer of stress as a business owner, wait until you file quarterly and annual payroll tax filings such as Form 941 and 940. Not to mention State filing requirements that could be as frequent as monthly for unemployment tax. Additionally, the IRS has more authority to seize business and personal assets when payroll taxes remain unpaid or are considered late. If a CPA only offers help setting up an S-Corp, but then doesn’t offer to help with the actual payroll services you need to run afterward, that means they’re probably only interested in earning a quick buck by setting up the entity while leaving all the hard work up to you. At ATBS, we help our clients set up entities (like S-Corps) but we also have payroll services to help our clients stay compliant with the IRS. We’re here to ensure our clients have all the help and resources they need to be successful. We don’t simply disappear after helping our owner-operator clients set up their desired business structure. Mistake 3: CPA sets up a C-Corporation for a driver, usually in an attempt to avoid paying child support. First things first, we know child support is a touchy subject for many adults. We also know that many adults - and many truck drivers - try hard to find ways to avoid paying child support. Whether that’s morally acceptable is a topic for a different conversation. One of the ways people try to avoid paying child support is by setting up a C-Corporation for their business and then paying themselves as an employee of that corporation in an attempt to “shield” some of their income by holding it in the corporation vs. paying it to themselves via payroll. Look, we aren’t lawyers. We aren’t here to talk about the specifics of this or give legal advice, but in practice, we have seen driver... after driver... after driver... fail to make this approach work to avoid paying child support. There are many reasons why this approach fails, and any CPA who would recommend a strategy like this is either misinformed or they’re just trying to get extra money out of you. And, to make this even worse for drivers who are conned into trying it out, it’s extremely expensive. You have annual State fees, additional tax filing fees, payroll fees, and finally, a C-Corporation means you’ll face double taxation!! Any CPA who would recommend a C-Corporation for an owner-operator as a business structure - especially as a way to avoid paying child support - isn’t doing you any favors. In nearly every situation, it’s a waste of time, money, and mental effort. This is another big red flag if you have a CPA recommending using a C-Corporation! Mistake 4: CPA sets up an LLC for an owner-operator in a State they don’t live and file taxes in. A single member, disregarded LLC is what’s called a “pass through” entity. This means the income you earn in the LLC passes through to you on your 1040 (tax return). LLC’s can help offer you legal protection - again, we aren’t lawyers, so talk to an attorney if you need help with risk/liability management! - but they offer no taxable benefit, because they’re a pass through entity. Sometimes - and it can be hard to believe that a tax professional would make this mistake, but they do - a CPA will set up an LLC for an owner-operator in a State that has no State income tax, thinking their client will then avoid paying income taxes. Sadly, this doesn’t provide any benefit because your income passes through to you and you end up paying taxes in the State you live and file taxes in anyway! So, instead, you now have: No taxable benefits Extra costs! Every year you’re going to file an annual fee to the State you have your LLC in, you’ll pay EXTRA fees because it’s considered a “foreign” business entity in that State, and you’ll most likely pay extra fees for someone in that State to be an “agent” for your foreign business entity as well. In the vast majority of situations, this decision by your CPA will result in extra costs with no benefits for your business. Unless your CPA can articulate a solid, beneficial reason for setting up an LLC for your business in a different State, we would recommend avoiding this from a tax standpoint since it provides you no benefit! If they can’t give you a clear explanation for doing this, it’s another red flag! Mistake 5: CPA sets up a partnership for an owner-operator, but doesn’t tell them about operating agreements. Many times, owner-operators want to go into business with another person as they get their business off the ground. This is perfectly reasonable and many people do this! However, there is one core mistake that CPAs make all the time with owner-operators when setting up partnerships for their clients: They don’t explain the importance of Operating Agreements. Again, we aren’t lawyers, but it’s common knowledge that an operating agreement is extremely important for your partnership or S-Corp. An operating agreement outlines roles, responsibilities, and rights of the owners and manager of the partnership. It defines rules and regulations for governing the business, explains voting powers, and also outlines profit and loss distribution. Most important of all, it dictates the terms for a member exiting the business in the event a partner or shareholder wishes or is forced to exit the business. You can do a simple Google search about the dangers of partnerships to learn about why so many of them fail - here are just a few of the common issues partners deal with on a daily basis: One partner works hard, while the other is a ghost and does little to no work at all. One partner tries to keep the business afloat, while the other starts a new venture with someone new and lets the existing business rot. One person takes great care to keep their personal affairs in order, while the other has personal problems that ruin their ability to focus on the business at all. One person is highly professional, while the other doesn’t care about professional image or the business’ brand whatsoever. Beyond some of the things outlined above, which are “interpersonal” issues, there are more structural issues related to partnerships without an operating agreement as well, and these can have huge implications for your business finances. For example, if there’s no operating agreement place, we’ve seen situations where one partner may remove all the funds from a business - without giving any funds to the other partner - and technically be within their rights to do so since it wasn’t explicitly laid out in legal terms how the profits would be shared via the operating agreement. Again, we aren’t lawyers, so we can’t give you advice about how to establish the appropriate operating agreement. Just be sure to discuss this with your CPA and your attorney before you go the route of setting up a partnership. There’s an old phrase that’s a little tongue in cheek “The only ship that won’t sail is a partnership”. Challenges are bound to come up at some point and your rulebook for disputes and disagreements is the operating agreement. If your CPA never mentions the importance of an operating agreement, that means they probably don’t understand the challenges of partnerships very well, which means they might be signing you up for a business structure that isn’t always a great fit. Do your research, this is another red flag! Summary At the end of the day, choosing the right business structure is obviously very important and is specific to a driver’s individual situation. But really, it’s not that hard to get it right! Do your research upfront, find a reliable source for legal and tax advice, and then find someone who knows trucking to set up the entity itself. If your CPA steers you in the wrong direction regarding your business entity, that’s a sign of things to come. If they haven’t taken the time to understand the basics of business structure, that means they probably haven’t taken the time to understand the basics - and the complexities! - of taxes for your business either. Check out our website to learn more about ATBS and how we help owner-operators manage their business and stay compliant with the IRS at the same time. We’d love to help you and your business if there’s a need!

Originally published by TrueNorth Companies. Truck rollovers happen every day in the trucking industry, but they don't have to. Read on to learn about three major rollover myths, the three main causes of rollovers and what you can do to prevent them from happening to you. Three Common Rollover Myths Myth 1: Poor driving conditions lead to most rollovers Facts: Less than 4 percent of single vehicle rollovers are actually caused by roadway and environmental factors. Over half (56 percent) happen on straight roads - not on curves or ramps. Approximately two-thirds of rollovers occur in daylight rather than in the dark. Ninety-three percent of rollovers occur on dry roads. Myth 2: The vast majority of rollovers are caused by reckless maneuvers and excessive speeding. Facts: Speeding certainly increases the risk of rollover accidents, but excessive speed is a contributing factor in less than half of all rollovers. That means that more than 50 percent of rollovers are due to other factors. Drivers often assume their rollover risk is negligible as long as they avoid excessive speeds. That is simply not the case. Avoiding excessive speeds is an important first step in rollover prevention, but there are a host of other factors, including driver fatigue and inattention that can also cause accidents. Evasive maneuvers are a factor in only a small percentage (5 to 10 percent) of rollovers. Myth 3: Rollovers only happen to inexperienced drivers. Facts: Approximately 66 percent of rollovers involve drivers with more than 10 years of driving experience. Most rollovers occur among drivers between the ages of 25 and 55. The Three Main Causes of Rollovers So, if most rollovers aren't caused by external conditions, speed or inexperience, what does cause them? Driver error is responsible for over three-quarters of all rollovers. Rollovers can happen to anyone at any time, so drivers can never be too comfortable behind the wheel. Over 90 percent of the time, the rollover is not the "first" event - in other words, some other dangerous event occurs before the rollover. It maight be drowsiness or inattention, which together contribute to about 20 percent of rollovers, with running off the road due to inattention being the leading cause of serious crashes. The event might be a driver drifting over into a soft shoulder, riding up over a curb or incorrectly making a turn at an intersection. Attentive driving can prevent most rollovers. Vehicle condition plays a role in some rollovers. In a recent Federal Motor Carrier Safety Administration study, 54 percent of the vehicles involved in a rollover accident had a brake defect of some sort. Load size is also a factor in some rollovers. More than 90 percent of cargo tank rollovers occur while carrying partial loads, so if you are hauling liquids, it's important to understand the "slosh and surge" effect of liquid loads. "Slosh" refers to liquid running up the sides of a tanker, which changes the tanker's center of gravity, and "surge" refers to liquid shifting from front to back and then back to front when accelerating or braking. How You Can Prevent Rollovers Since a large majority of rollovers are caused by driver error, most crashes are preventable. Here are several ways you can prevent a rollover and get to your destination safely: Slow it down. Obey the speed limits and take it slow around corners. Stay alert. Falling asleep at the wheel or driving while fatigued is unacceptable. Turning up the radio or rolling down your windows are not effective ways to keep you alert. Hours-of-Service regulations are in place to prevent fatigue-related accidents. Put down the cellphone. Not only is it extremely dangerous to text while driving, it is also illegal for truckers to do so. Ensure your truck is mechanically sound before your trip. You don't want to be involved in a rollover or other accident because your brakes weren't properly checked before a trip. Understand the design and performance of the type of truck you will be driving. For example, tankers handle differently than reefers or flatbeds. Always make sure loads are tied down properly. Shifting loads can easily lead to a rollover. Ultimately, many of the factors that can cause a rollover crash are entirely under the driver's control. Always remember - deadlines are important, but safety is your number one priority.

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.

Despite being the primary system that all income-producing American adults must interact with, the IRS and taxes tend to be something we aren’t very good at educating ourselves about. On top of that, the system can be very convoluted, overcomplicated, and quite frankly, a bit scary. This combination can often lead to the spread of misinformation and fear-based marketing campaigns related to how the IRS operates, and what resolutions are available to taxpayers. For taxpayers who are attempting to address delinquent tax filings or set up arrangements to resolve a debt with the IRS, it is important to know the truth regarding how the IRS operates, what resolution options are available to you, and what the truth behind collection practices is. When setting yourself up for success in regards to resolving your back tax debt, it is important to debunk some heavily circulated myths surrounding the IRS. 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. Myth 1 - IRS Agents One hot-button issue currently is how the IRS is expanding by hiring 87,000 new agents and the myth that these agents will be armed and banging on the doors of taxpayers across the nation. It’s important to keep in mind that just because they are hiring, does not mean it will be a quick switch flipped when it comes to the level of aggression they will use in collections. First, this total number of agents is to be hired progressively over the next 10 years. More agents, however, does mean that the IRS will have greater manpower to enforce the collection of back tax as these folks are trained and assigned to field collections. Second, the IRS announced a major policy change that will end most unannounced visits to taxpayers by agency revenue officers. The change reverses a decades-long practice by IRS Revenue Officers, the unarmed agency employees whose duties include visiting households and businesses to help taxpayers resolve their account balances by collecting unpaid taxes and unfiled tax returns. Unannounced visits have ended except in a few unique circumstances and will be replaced with mailed letters to schedule meetings. So, while more IRS employees do not directly correlate to different or more aggressive collection tactics, it does mean an agent is likely to be assigned to your case sooner than in prior years. Getting on top of the back taxes before someone is assigned to your case is always a best practice and sets you up for greater success in reaching a resolution. Myth 2 - Offer in Compromise Another myth to look out for, and to be sure you are well-educated on prior to jumping into a sales pitch, is the Offer in Compromise or Fresh Start Initiative. Be sure you qualify for these programs prior to hiring anyone to negotiate on your behalf. The Offer in Compromise program allows certain taxpayers to settle their debt with the IRS for less than they owe. While this program can provide great benefits to specific taxpayers, you must meet a very strict list of guidelines. If it were easy to settle our debt with the IRS, everyone would do it! So, be wary of anyone selling you on this type of program, especially if they’ve not already talked to the IRS about your specific account and reviewed your financial situation with you. Myth 3 - Home Seizure Another myth that can be damaging, and is often used as a way to scare folks, is that the IRS will seize your home. The IRS cannot legally make you homeless. While they can ask you to attempt to borrow against the equity in your home, they cannot force you to liquidate your primary residence. With anything pertaining to the IRS, you want to be sure you are receiving reliable information from reliable sources. IRS.gov is the primary place to double-check any claims someone makes to you. Second to that, ATBS’ team of tax and tax resolution experts is here to be of assistance when it comes to any and all questions related to the IRS and your account with them. Need help figuring out what solution might be best for you? Click here to get ahold of us.

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.

No one really wants to live worrying about money from one check to the next. It takes hard work and dedication, but the cycle can be broken. If you find yourself in a similar situation then here are some tips to help you stop living paycheck to paycheck and start living on your own terms. Start Tracking Your Spending The first step that you need to take, and possibly one of the most important, is you need to track your spending. For one month, document everything that you spend money on. It should be everything from how much you paid for a small cup of coffee all the way up to your rent or mortgage payment. If you are married, make sure your spouse joins in on this process. An easy and free way to document everything is with a Google spreadsheet. It can be accessed online which means multiple people can work on the document together. After a couple of months, you will start getting a better picture of what you are spending your money on. From there you can set up a budget that you feel you can live with each month. Begin Cutting Back on Your Spending Now that you know what you are spending your money on each month, it’s time to start cutting back. Maybe you cut out expensive dinners that put you over your per diem amount, or maybe you have your spouse at home downgrade the cable plan. Are you carrying a credit card balance each month? If you are, then you’re spending extra money each month on finance charges. If you can eliminate your credit card debt quickly, then do so. If it’s going to take some time, then it’s important to come up with a plan. As a truck driver, your insurance is a big expenditure each month. Continually shop around to see if there is a lower rate elsewhere. This is a simple way to help reduce your monthly expenses. Finally, do your best to avoid any fees that are not a must. Don’t use ATMs that are not part of your bank’s network. Also if your bank charges a monthly maintenance fee, then you should look at moving to a bank that has completely free checking. Increase Your Household Income This is easier said than done and will require hard work and commitment. If you are an independent owner-operator, work to establish a great relationship with a couple of dedicated clients. By doing this, you could end up being the first call when a load needs to be delivered. Alternatively, if you are driving for a fleet, make sure you have a strong relationship with your dispatcher. Becoming a reliable driver should give you the best loads on the most desirable routes. Living paycheck to paycheck isn’t something that many people want to do. With a little budgeting, some cost-cutting, and a little extra income you can end the cycle and start living the way you really want.

When it comes to making more money or saving on taxes, providing pertinent information to your tax preparer is important. The following are examples of important events that your tax preparer should be aware of and, if not, should be provided during the tax preparation process. Are you an owner-operator that needs help with your taxes? Click here! “I bought a new (or another) truck.” This is vital to know, as the amount of your depreciation deduction may have an impact on your tax liability. “I changed carriers.” We know it is a pain to gather together all of your Form 1099’s, but it’s a red flag to potential IRS auditors if you don’t report all of your income. ATBS also uses this information to make sure we capture every available deduction. “I renegotiated or signed a new lease.” Entering into any new legal documents or renegotiating the terms of previous legal documents may impact your tax situation. It is crucial for ATBS to know this to consult with you on any tax matters that need to be considered. “I took another part-time job to supplement my trucking income.” It’s essential that ATBS is aware of this during the year to make sure your estimated tax payments are properly calculated, and all income is accurately reported to the IRS. “I made a nondeductible contribution to my traditional IRA.” Nondeductible IRA contributions don’t have an impact on your tax liability in the year they are made. However, if these contributions are not reported on your return, it is much more difficult to claim these amounts as they are not taxable when you withdraw them from your IRA years later. “I converted my IRA to a Roth IRA.” Traditional IRA distributions are not taxed until after you take them out of the account. But if you convert an IRA to a Roth IRA, this may trigger a taxable event in the year of the conversion. “I had debt forgiven by a creditor.” If you’ve negotiated with collectors to settle debts for an amount less than what you owe, that is a smart way to dig yourself out of a hole. The IRS considers debt that you incurred and do not have to pay back as income. The canceled debt must be included in your gross income unless you qualify for an exclusion or exemption. If a creditor forgives $600 or more in debt, they are required to file Form 1099-C with the IRS. If the IRS knows about this, your tax preparer needs to know about it also. “We have a new baby in the family.” If you have a new addition to your family or if your tax filing status changes due to marriage or divorce, please let your tax preparer know about these types of events. They have an impact on the calculation of your tax exemptions and rates.

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.