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.

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.

With so many health problems that circulate around truck drivers, it’s hard to see the positive side in all of it. But health problems that can be reversible? Now there’s something to get excited about. Sleep apnea is a condition that not only affects a good night’s sleep, but it can also affect day-to-day activities – most importantly while driving. Many drivers are now being diagnosed with sleep apnea, and fear that a diagnosis will mean wearing a Continuous Positive Airflow Pressure (CPAP) mask at night. This mask is the most common medical treatment that provides a constant stream of air to keep breathing passages open during sleep. But luckily there are things that you can do to change your health so that if you are diagnosed, you don’t have to live with the CPAP mask forever. What is Sleep Apnea? Sleep apnea is a condition that causes shallow breathing, and pauses in breathing at night. This causes a disruption in the natural sleep cycle, and can lead to less energy and mental sharpness during the day. This condition has been linked to a number of other health risks over time, such as high blood pressure, stroke, and weight gain. The most common type is obstructive sleep apnea, which occurs when tissue in the back of your throat relaxes and blocks your airway, resulting in loud snoring. There are two other types that include central sleep apnea (involving the central nervous system), and complex sleep apnea (a combination of obstructive and central). A healthcare professional can provide an accurate diagnosis of the condition. What are the symptoms? Major signals are if pauses occur when you snore, and if choking or gasping follow the pauses. You may not notice these symptoms on your own, so ask your partner to observe your habits – or record yourself during sleep. One app that can assist you with this is Sleepbot, available on both iPhone and Android. It is important to note that snoring does not necessarily indicate that sleep apnea is present. Be sure to note your daytime behavior as well to help determine if you might be at risk. Other common signs and symptoms: Headaches in the morning Difficulty remembering things, or concentrating Irritability Depression or mood swings Dry mouth or sore throat upon waking Dozing off when driving, or stopped at a light Dozing off when not busy or active High-risk factors associated with sleep apnea include: If you have high blood pressure If you have a collar size of 17-inches or greater If you are overweight If you are a man If you are related to someone that also has sleep apnea If you are a smoker What can I do to treat my Sleep Apnea? Although weight loss takes time, it is one of the best ways to treat sleep apnea. Here is a great article about getting started with weight loss, and here are some apps you can download to help along the way. Some cases have shown that losing a significant amount of weight can cure the condition entirely, but even just losing 10% of body weight can have a big effect on symptoms. In addition to weight loss, here are some other tips: Quit smoking, as it increases fluid retention in your throat. Avoid alcohol or sedatives at bedtime. They relax throat muscles causing an interference with breathing. Try sewing a tennis ball into a pocket on the back of a t-shirt. When you sleep in the shirt, it will prevent you from rolling onto your back. It is better to sleep on your side, as gravity can cause your tongue and soft tissues to drop and obstruct your airway. Prop up your body from the waist-up during sleep by using a foam wedge or cervical pillow. Be sure to see a doctor immediately if you suspect sleep apnea, as it is a potentially serious disorder. However taking the right steps towards weight loss and lifestyle changes is the best way to move towards healing. For additional resources or questions about sleep apnea visit the American Sleep Apnea Association, or consult your healthcare professional. Sources: http://www.helpguide.org/articles/sleep/sleep-apnea.htm Image sources: Photo 1: https://www.flickr.com/photos/carbonnyc/ Photo 2: https://www.flickr.com/photos/tamakisono/

It’s currently the middle of summer and the warmest months of the year if you live north of the equator. So why are we talking about fuel costs and cold weather? The reality is that the price of diesel fuel is affected in various ways throughout each season of the year. Let’s start by talking about the two primary types of diesel that are used throughout the year -- diesel 1 and diesel 2. Diesel 1, also called kerosene and a close relative to jet fuel, is used in extreme cold to prevent fuel waxing and gelling. Diesel 1 has a higher cetane count and higher flash point, and is more efficient than diesel 2. Diesel 1 also contains less paraffin wax which causes the clouding and gelling of fuel in cold weather. It’s also significantly more expensive to refine, which is why we don’t use diesel 1 year-round. In cold weather climates, diesel 1 is blended with diesel 2 to prevent fuel gelling. Diesel 2 has adequate cetane counts and a high enough flash point combined with a lower cost to refine which makes it the most cost-effective fuel to use in normal conditions. If diesel 1 is more expensive, fuel prices must be highest in the winter...right? Wrong. The table below shows the average change month-to-month in diesel fuel prices from 2003 through 2020. November, December, and January (traditionally cold months) have the greatest average decrease in fuel prices. This is when expensive diesel 1 is blended with diesel 2 in cold weather climates to help trucks avoid fuel gelling. So if we’re consuming more expensive fuel in the winter months, why does the price go down? Supply and demand is the reason. As the holidays approach we hear about everyone traveling to see family. What we don’t hear is that once we get to our destinations, we tend to commute less. According to information from the US Energy Information Administration, we consume less motor fuels in January, September, and November. From 2003 through 2020, as a nation, we consume more fuel in each of the other nine months. Thus, higher consumption of fuel causes higher costs than does the blending with more expensive diesel 1 fuel. Source: EIA, millions of barrels per day, https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MGFUPUS2&f=M When driving in the winter months, you need to be aware of weather conditions and determine if you need to purchase more expensive blended fuels in cold climates to keep your fuel from gelling. However, you will generally experience higher fuel costs in the spring and early summer months due to increased travel and greater demand for motor fuels. In January, if you’re looking at fuel prices in Wisconsin while you’re in Texas and thinking you don’t want to fill up in Wisconsin, the cost of downtime for unthawing your gelled engine with un-blended fuel purchased in a southern state will be far more expensive than the blended fuel or a bottle of fuel additive. But in the summer months, you might find yourself paying more for fuel in a “vacation destination” region due to supply and demand. Either way, you can’t apply just one rule year-round. You have to pay attention to the weather, the markets/regions, state fuel taxes, and other variables we’ve discussed in this series to make sure you’re making the best decisions for your business and controlling your fuel-related costs.

If you haven't watched Episode 2, stop what you're doing and go watch/listen to Episode 2. Obtaining IRS Compliance is the single most important part of ATBS' proven process - go get that started before worrying about calling the IRS! In this episode of the Rearview Mirror Series, Tom and Barney explain the general process of what goes into preparing for an IRS negotiation, as well as the basics of how the IRS call goes. Specific negotiation strategies & tactics will be discussed in-depth in Episode 5! Biggest Takeaways: Obtaining IRS Compliance (Episode 2) is most important, this MUST be done before you call the IRS! Think about your story (why you're in the situation you're in with the IRS) and write it down before you call - IRS agents are human beings, and are willing to take your individual circumstances into account. Get your documentation ready! Tax notices/documents, any medical info (physician's note), etc. - that information is vital to use your time effectively on the call. Once you're on the phone with an IRS agent (which can take many hours of waiting!) the most important thing you can do is have great manners - say "please" and "thank you"! Calm yourself and treat others like you want to be treated - if you aren't willing to be kind to IRS agents, and if you aren't willing to let them "lead" the conversation, you'd be better off paying a professional to handle the call. If you have a very large balance due to the IRS, if the IRS is threatening to garnish your wages and/or put a lien on your assets, if an IRS "Revenue Officer" is assigned to your case, or if the stress of dealing with the IRS is simply making your life unnecessarily hard, we highly recommend using a trucking-specific tax relief team (like the ATBS Tax Relief Pit Crew!) to assist you. We'll be talking about Managing IRS Compliance next week so you can ensure you never fall back into trouble with the IRS again after your negotiation is finished! To check out the complete series, click here. You can also learn about ATBS’ Proven Path for owner-operator truck drivers to get caught up on taxes and out of debt with the IRS by downloading our Tax Resolution Guide for Owner-Operators! Remember, if you're in trouble with the IRS, or if you’re just trying to get ahead of any future problems with the IRS, our Tax Relief Pit Crew will be able to help you out! To learn more about our Tax Relief Pit Crew Service Packages, click here.

In this episode of the Rearview Mirror Series, Tom and Barney talk all about the first step in getting caught up on your taxes: IRS Compliance. They dive into what exactly IRS Compliance is, why it's important, and how to obtain it. Biggest takeaways: You're not alone if you are behind on your taxes, and you can - and will - get back on track! You simply have to get started with ATBS' Three-Step Process. Negotiating with the IRS CAN'T happen until you become Compliant (Step 1)! Getting caught up on your taxes and paying your taxes on time every quarter (Obtaining Compliance) will solve the majority of your back tax problems. If you still have a significant balance due to the IRS after going through Step 1, you can move onto IRS Negotiation (Step 2), which we will discuss in the next video. To check out the complete series, click here. You can also learn about ATBS’ Proven Path for owner-operator truck drivers to get caught up on taxes and out of debt with the IRS by downloading our Tax Resolution Guide for Owner-Operators! Remember, if you're in trouble with the IRS, or if you’re just trying to get ahead of any future problems with the IRS, our Tax Relief Pit Crew will be able to help you out! To learn more about our Tax Relief Pit Crew Service Packages, click here.

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