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In this episode of the Rearview Mirror Series, we answer some of the most common questions truck drivers have about back taxes and tax resolution. Some of the Questions We Answer in This Video Include: "Why does the IRS make you pay taxes twice on April 15th?" "I heard your tax debt goes away after 10 years, is that right?" "My buddy told me the IRS will throw me in jail because of back taxes, can they?" "If someone puts a lien on my assets/property, can I still sell the asset/property?" "I have to file back taxes, but I was single then and married now, do I file single or joint in those old years?" "If I file an old tax return, do current tax laws apply, or do the tax laws from that year apply?" "I'm really far behind on taxes, but haven't heard from the IRS, if I look up my transcripts, will that put me on the IRS' radar?" "I heard from someone who told me that taxes are unconstitutional and I don't have to pay them, is that true?" "Have the dates for 2021 changed back to normal for quarterly tax estimates & tax filing? I know they were different in 2020." "I'm getting older, can your IRS debt be forgiven when you pass away?" 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 the final episode of the Rearview Mirror Series, we give a quick summary of the series in total, answer some final user-submitted questions, and give truckers advice on the next steps they can take to get caught up on their taxes and out of trouble with the IRS. 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.

We don’t have to tell you that competition is fierce. Not only are you faced with keeping your name top of mind with prospects and customers, but you also need to out-think and out-execute some of the biggest companies in the world to win consistent business. As a result of these David vs. Goliath battles before you, many successful businesses have out-maneuvered the competition big and small by investing in technology to simplify manual tasks and free up valuable time. So, what are these businesses using and how can you get your hands on them? Here are the top 8 apps and tools that help small businesses boost their productivity and efficiency. Evernote – A handy tool that allows you to clip, store, organize online articles, blogs and content. You can share this content with other users or team members and is a great way to organize information. Google Drive – A fully featured office suite, it’s also a cloud storage system that allows you to store data (5Gb for free). Fully integrates with other Google office or business apps making it fairly functional. Smartsheet – Collaborate and create lists and spreadsheets with a few clicks of a button. Stay organized by uploading documents, color coding rows, and assigning alerts. LocalVox – Publish news, events, deals, and promotions with a click of a button to a number of online channels like social media, websites, local directories, and even email newsletters. Expensify – This app lets you scan receipts with a click of a button, and also helps you keep track of mileage and other business expenses. It’s a great way to organize your costs of doing business. Asana – A nice ‘collaborative information manager’ designed to help you keep track of work projects and events. InDinero – A great app to help you manage cash flow and other business finances. You can sync your bank account and credit cards. The app will even predict future cash flow based on past trend data. Microsoft To Do – Allows you to keep and manage digital to-do lists. You can even share them between coworkers, set due dates, and create recurring to-dos. The great thing about the web today is that there are tons of apps – many of them at no cost – that can really help you improve your business efficiency. They can help you shrink the gap between you and your competition, reduce your business operating cost, and help improve cash flow – something we’re pretty keen on here at eCapital.

Download our complete "Tax Resolution Guide for Owner-Operators" by clicking here! As we approach Halloween, I find myself watching more and more scary movies. As creepy as vampires, werewolves, and zombies are; nothing quite compares to the fear of finding an IRS letter in the mailbox telling us we owe them money. Dealing with back taxes and the IRS can be scary at first, but if you follow the right steps you can find your way out of the dark. Perhaps the best way to learn would be to take a cue from the characters in scary movies! You may be surprised the more treats than tricks you can find when dealing with back taxes. What you don't know can hurt you. In one scary movie, someone walks into a dark basement where a monster is lurking in the shadows – even after we were yelling at the TV for them to not go down there. Your back taxes are no different! The longer they sit unnoticed or ignored by you, the bigger the problem will grow. Facing the problem head-on and being ready with a plan of attack is the best way to defeat the monster. What can you do? Know what years you still have to file, what you owe, and how long you have until the next deadline. The first step most tax resolution firms take is to find out exactly what you owe, and what years still need returns filed. This is especially important if the IRS filed a tax return for you. Knowing what your total back taxes are will help with understanding the best course of action. You can even contact the IRS yourself and get the years in which you are missing tax returns, and the balances. If you ignore the problem, it can grow out of control. Think of your typical zombie movie – it doesn’t take long for one little bite to spread over the entire population. The number grows bigger and bigger, and it just gets harder for the good guys to fight them off! Left unchecked, your tax bill can grow exponentially with each passing month and quickly overwhelm you. By addressing any letters you receive from the IRS as soon as possible, you can prevent these problems from growing out of control. The last thing you want is to receive a Final Notice of Intent to Levy, which means the IRS is preparing to seize your assets (settlements or wages)! What can you do? In most cases, swift action is the best course to take. Whether it's contacting a tax professional such as ATBS, or simply responding to the letter by calling the listed 1-800 number – it’s important to take action as soon as possible. Letting these letters go unaddressed could result in the IRS garnishing your wages or property. By taking action now, you’re letting the IRS know that the issue will be resolved and prevent them from future threats. Use the proper ammunition. You’ve seen the movies, so you know that there are some sure-fire ways to stop monsters in their tracks – such as wooden stakes for vampires, or silver bullets for werewolves. Although solving tax issues isn’t as simple, there are steps you can take to get there. After contacting your tax resolution firm or ATBS, you will need to file your missing tax returns. You may even be able to reduce the balance owed to the IRS. If you neglect to file your taxes, the IRS will do a Substitute for Return for you – which is the worst filing status. They will not take into account any expenses or deductions, which can mean thousands of dollars you should not have to pay taxes on. Certain business deductions can help reduce your liability, especially if you know what deductions to look for in your industry. If you are missing documents, you can order a Wage and Income Transcript to help file the appropriate income. Make sure that you have proper documentation of any receipts or expenses you claim, so that if your return faces any additional scrutiny by the IRS you will be prepared for any potential audit. Depending on your situation, you may qualify for several different resolution options. Talk to your ATBS tax professional to see what your options are. Once you’ve resolved your back tax issues, it’s important to stay on top of your taxes in the future. Have a plan of attack, and don’t let the monster return. If you’re an independent contractor, this means paying appropriate quarterly tax estimates, and filing your taxes timely every year. Always be sure to find a trusted firm that has helped thousands of people in circumstances like yours. You will want to understand the company’s process, and be sure that it truly helps you fix the problem. A tax resolution firm should know the ins and outs of what the IRS expects, as well as understand the industry in which you work. Never be afraid to ask questions. When you’re watching scary movies this Halloween, think about what everyone is doing wrong. Think about what you would do differently, and apply it to your taxes! You can prevent being overwhelmed by back taxes by being prepared, and being proactive now. Be ready to face the monsters head-on, to prepare you for the future of your business!

Here at ATBS, we understand that tax season is no joke. However, we decided to lighten the mood by coming up with a list of our Top 10 Jokes for Tax Season. Each joke has a link to more information (serious stuff!), so while you are laughing you can still learn a little something along the way! 10) Tax Day is the day that truckers send their money to Washington, D.C. and wealthy Americans send their money to the Cayman Islands. (Jimmy Kimmel, with modifications) Here is a list of other illegal tax practices! 9) Diesel Stations collect taxes -- federal, provincial, and local. They also sell diesel on the side. (Unknown) 8) Children may be deductible, but they are still taxing. (Unknown) 7) The IRS suggests filing early to reduce the chances that someone will steal your identity, and file before you. Honestly, if somebody wants my identity so badly that they'll file my tax return for me, go crazy. You can mow my lawn while you're at it too. (Jimmy Kimmel) 6) I'm not going to pay taxes. When they say I'm going to prison, I'll say “No”, prisons cost taxpayers a lot of money. You keep what it would have cost to incarcerate me, and we'll call it even.' (Jimmy Kimmel) 5) Tax reform is when you take the taxes off things that have been taxed already and put taxes on things that haven’t been taxed before. (Art Buchwald) 4) Worried about an IRS audit? Avoid what's called a red flag. That's something the IRS always looks for. For example, say you have some money left in your bank account after paying taxes, that's a red flag. (Jay Leno) 3) When it comes to taxes, there are two types of people. There are those that get it done early, also known as psychopaths, and then the rest of us. (Jimmy Kimmel) These are some of the benefits of being a psychopath and filing your taxes early! 2) People that cheat on their taxes truly disgust me...This is not the world I want to raise my 27 dependents in. And our favorite tax joke! 1) Question: Who makes the best detective - Sherlock Holmes, or an ATBS tax accountant? Answer: The ATBS tax accountant - we find more deductions! -- Over 150,000 owner-operator truck drivers have made the choice to hire ATBS over the past 20 years. We offer a variety of services including accounting, bookkeeping, and tax preparation. If you’d like to learn more about ATBS services, click on the button below or give us a call at 866-920-2827.

As an owner-operator, you’re probably always hearing about ways to save money on fuel, truck maintenance, taxes, and business expenses. But what about everything else? If you’re trying to get out of debt, set money aside, or simply improve your financial situation, there are plenty of other ways to cut back your spending. With any kind of change, little steps are what lead to big results. Cutting back your spending on the little things will create good habits, and end in bigger savings down the road. Here are the best ways for truckers to cut spending: 1) Refill your water (instead of buying bottles or jugs). Not only are plastic bottles and water jugs bad for the environment, but if you’re constantly buying them, you’re constantly throwing away money! Most bottled water is just regular old tap water anyway, your best bet is to just get a jug to refill on the road. You can find re-useable jugs at Wal-Mart, or any sporting goods store. 2) Make good choices at the grocery store. Packaged food may seem less expensive, but getting fresh ingredients and making your own meals is actually cheaper and better for your health. Try to make at least five meals a week vegetarian, as meat is much more expensive than vegetables. Making healthier choices such as buying bulk oatmeal instead of packaged cereal will save you money as well. Here are some additional ways to save money at the grocery store: Make a grocery list. You’ll shop faster, and save time. If you forget something, you’ll have to go back – and probably end up putting a few extra things in your basket on the way out! Don’t shop on an empty stomach. You’ll shop with your nose and grumbling tummy, rather than with your head! Use a basket, not a cart. You will be less tempted to load up with more things than you need if you have to carry a basket. Don’t buy disguised water. Chicken or vegetable stock and bottled tea are actually just packaged water! One bottle of iced tea can cost between $1-2, whereas 20 bags (20 servings) of tea costs about $3. One quart of chicken or vegetable stock can cost $2-4, whereas a jar of chicken base costs $3-6 and makes 10 quarts of stock. Even better, if you save chicken bones and unused vegetable ends you can make your own stock for free just by putting in a slow cooker with water for a few hours! Buy seasonally. Purchasing produce that is in season will be much cheaper. You can even download an app to figure out what’s in season, and plan your meals accordingly. Calculate the actual cost. Sometimes it’s cheaper to buy a larger bottle of something by looking at the price per ounce, rather than the price on the tag. Look up, look down. Most retailers put the most expensive products at eye-level, hoping you’ll go for the easy grab. Look at the top and bottom shelves for better prices. Change your mind. If you look in your basket and realize you don’t actually need that bag of chips you threw in on an impulse, don’t hesitate to tell the cashier that you’ve changed your mind on that purchase. They don’t mind putting it back for you! Bring a reusable shopping bag. Many stores give a 5-10 cent discount for bringing your own reusable bag. Every little bit helps! Always check your receipt. Get into the habit of checking your receipt before you leave the store, to make sure everything was rung up correctly. Discounts change frequently, so there can be discrepancies. Speak up if you notice that the price on the shelf differs from what you paid. 3) Utilize your local library for entertainment. The best thing about the library is that everything you rent is FREE, and you can take it on the road with you! Not only are there thousands of book selections that you can download online as eBooks, but many libraries now use an audio book site that you can download as an app to listen right from your phone or mobile device. Check your local library’s website for what they have available. 4) Figure out creative ways for updating your wardrobe. Remember, you are the face of your business – so it’s important to dress professionally. However, don’t underestimate the quality of clothing available at thrift or consignment stores. Take worn-out shoes to a cobbler to be repaired instead of tossing them – it will probably cost between $15-30, which is much cheaper than buying a new pair. Along those same lines, mend your clothing instead of buying new. Some dry cleaners also will make minor repairs to shirts or pants. 5) Find free forms of entertainment when home. Take your significant other for a long walk in the park and a picnic instead of dinner and a movie. Check your local newspaper for free events – most cities will put on concerts and movies in public parks at no cost. Save money by waiting until movies come out on DVD, and having a movie night / potluck with some friends. You won’t have to pay for theater tickets, and you’ll get dinner and quality time with the people you care about. 6) Make healthy choices. Sometimes the best way to save money is to make healthy changes in your life. Giving up smoking or alcohol will not only directly impact the amount of money in your wallet, but also the cost of medical bills down the road. Practicing healthy habits like exercising and increasing your fruit and vegetable intake will keep you out of the doctor’s office, and off prescriptions. If you do need to get a prescription, remember to ask your doctor to prescribe generic medicine. They usually offer the name brand version first, so be sure to speak up since generic is much cheaper. 7) Really think about your purchases. Before throwing down your credit card, ask yourself if you really need what you’re about to purchase. If the answer is anything other than “definitely, yes!” then put it back. Even if you think you might use it, hold off and think about it while you finish up shopping. Chances are, you will forget about the item all together. 8) Buy things off-season. In contrast to produce at the grocery, making off-season purchases for other items can pay off big. If you need new outdoor winter gear, try purchasing it at the end of the season (in Spring) when everything is on sale. If you like to buy holiday-themed items, buy them in January and save them for next year. Just be sure to keep early spending in check, as it could cause you to actually purchase more in the long run. Even planning to start holiday shopping early (such as October), will not only help you find less-expensive gifts, but you’ll be more likely to find things that your friends and family actually want rather than scrambling at the last minute. Source: http://www.beingfrugal.net/ways-to-save-money/ Source: http://www.businessinsider.com/ways-you-waste-money-at-the-grocery-store-2014-5

As owner-operators, you don’t get sick time like many workers who work for a company do. When you’re not working, you’re not making money. You’re also traveling great distances to different parts of the country that exposes you to different strains of viruses and bacteria that your body has not been exposed to before. Combine those two factors with a high-stress job that entails little sleep and possibly a diet that involves too much fast food, and your risk of developing a sickness is higher than people working in an office every day. Luckily there are many ways to reduce your chances of developing a cold, the flu, or even the Coronavirus this year. While nothing will 100% prevent you from getting sick, these tips can help keep your immune system strong and reduce your chances of developing a sickness that could keep you off the road. Wash Your Hands Washing your hands is one of the best germ prevention methods you can do. Fecal matter from people and animals are a host to germs like Salmonella, E. coli, and the norovirus. These germs often get on the hands after people use the bathroom and if they don’t wash their hands properly, the germs can spread and live just about anywhere. It is important to wash your hands with soap and water for at least 20 seconds throughout the day, especially after using the bathroom and before and after handling food. Get Enough Sleep Lack of sleep can make you sick. Research studies have shown that people who experience a low quality of sleep are more likely to get sick after being exposed to a virus. While you’re sleeping, your immune system releases cytokines, which are proteins with several jobs. Some help promote sleep while others will help you fight infection and inflammation. Doctors recommend between 7-8 hours of sleep a night. Avoid Close Contact This might seem like a no-brainer, but avoid close contact with people who are sick. This works both ways too. If you’re sick try to stay home and avoid healthy people to avoid spreading your germs. While you can’t completely avoid everyone who is sick everywhere you go, you can certainly visibly see if someone is really sick and avoid any close contact with them. If someone is coughing and sneezing a lot, that’s a good indicator they could be sick. If you do come into contact with a sick person, remember to wash your hands. Cook In Your Truck Another way to avoid contamination from other sick people is to avoid eating at restaurants and truck stops, especially during an outbreak such as Coronavirus. Stock up on groceries and do most of your cooking and meal prep in your own truck, using clean hands and sanitized surfaces. Not sure what to cook? Check out our Rolling Kitchen Cookbook for tips. Stay Hydrated Staying hydrated is important for your health and is especially important when you’re starting to get the tingle in the back of your throat. Drinking water is essential to your health. It serves as your body’s natural detox system by flushing waste out of your cells. Many providers recommend drinking half your body weight in ounces per day. Herbal teas can also help relieve the symptoms of colds and the flu. Many herbal tea ingredients like lemon and honey can help soothe a sore throat. Get the Flu Shot The Centers for Disease Control and Prevention (CDC) recommends getting the flu vaccine every year. Each year the flu vaccine is slightly different based on the most common flu virus so it is important to get it every year to account for the changing strains. While the flu vaccine does not 100% prevent the flu, it can greatly reduce your chances of getting sick. The CDC recommends everyone over the age of 6 months to get the shot, especially people with chronic health conditions like asthma, diabetes, and heart and lung diseases. The flu vaccine is readily available in your healthcare provider’s office, flu clinics, and pharmacies like Walgreens and CVS. Avoid touching your eyes, nose, and mouth with unwashed hands. Cover your cough or sneeze with a tissue, then throw the tissue in the trash Clean and disinfect objects that you frequently touch Follow the CDC’s recommendations for using a facemask The CDC doesn’t recommend people who are well to wear a facemask Facemasks should be used by people who show symptoms You can’t 100% prevent getting sick, but you can find ways to reduce your chances of feeling miserable. The above tips can help you reduce your chances, but it’s up to you to follow through with them.

Executive Summary Introduction Assembly Bill 5 (A.B. 5) is a California law that restricts businesses from classifying workers as independent contractors. Stricter employee classification laws have momentum, and federal changes could be on the horizon. This means your fleet may need to be prepared if A.B. 5 becomes the law of the land. The History of A.B. 5 A.B. 5 is based on a California Supreme Court ruling on a case known as Dynamex. The Dynamex ruling replaces the old classification test with a new ABC test. Owner-operators leased to trucking companies likely cannot pass this test. What Has Happened in the States Looking to Adopt A.B. 5 (Especially in California) In January 2020, a preliminary injunction was issued that exempts carriers from A.B. 5 while the lawsuit is adjudicated. The injunction allows motor carriers to continue working with owner-operators until a final decision is reached. The law has already had significant consequences in California, with fleets announcing a move away from using owner-operators based in California. Options to Navigate Similar Laws (If They Were to Pass in Your State) The option that seems to be getting the most consideration from carriers to get around A.B. 5 is opening a broker arm. This brokerage relationship will pass the “B” part of the ABC test. Implement a “two check system.” The first check is to the driver as an employee, and the second check is for the rental of the driver’s equipment. However, there are nuances that make this a problematic solution. Many owner-operators in Southern California are beginning to establish themselves as LLCs and receive loads from a trucking companies’ brokerage divisions. DOL Releases Text of New IC Rule for FLSA The U.S. Department of Labor (DOL) is also proposing new guidelines on employee classification. Being this is at the federal level, it may not impact the rules of the state-based A.B. 5. Even with the classification test in the initial DOL proposal being considered more positive for independent contractors, laws similar to A.B.5 are a real threat for fleets. The Passage of Proposition 22 On November 3, 2020, California voters easily passed Proposition 22, an exemption from AB5 for app-based drivers and couriers. Prop 22 created a hybrid model between contractors and employees; essentially a “contractor-plus limited benefits” model. It’s believed that Prop 22 should be a factor in whether the trucking industry remains exempt from AB5 as well. Key Takeaway Your fleet needs to begin thinking about an action plan if A.B.5 style rules were passed federally or in your state. Introduction It’s no secret; The government has been aggressive in seeking unpaid taxes and penalties from companies misclassifying their drivers. On top of that, those drivers are also making claims for unpaid wages, including overtime and benefits. The potential tax debt owed to the government, coupled with a driver seeking money owed for misclassification, may end up costing a carrier hundreds of thousands of dollars. These misclassification risks have become even more concerning with the passing of Assembly Bill 5 in California earlier this year. Assembly Bill 5 (A.B. 5) is a California law that restricts businesses from classifying workers as independent contractors rather than employees. The bill was driven by unions wanting to organize workers. However, many experts believe A.B. 5 will actually increase labor costs, create higher prices for consumers, reduce the quality of service, and, most importantly, reduce workers’ flexibility. Though California’s law has drawn the most attention, similar legislation has popped up among other states, including New Jersey, New York, and Washington. Likewise, just this month, the Democratic-held U.S. House passed a labor law that would adopt a stricter test nationally to determine whether a worker can be classified as an independent contractor. That bill has a slim chance at passing the Republican-controlled Senate, and President Trump already stated he would veto the bill if it did somehow pass. However, the point remains: stricter employee classification laws, especially those at the state level, have momentum, and federal changes could be on the horizon depending on the results of the election. Your fleet should prepare for the possibility of A.B. 5-type legislation becoming the law of the land. The History of A.B. 5 (Where did the idea come from, and why?) A.B. 5 is based on the California Supreme Court ruling on a case known as Dynamex on April 30, 2018. The Dynamex ruling establishes a presumption that workers are employees unless the hiring company can prove otherwise. Before the Dynamex ruling, the Borello test (in place since 1989) was the standard for determining classification. The Borello test is an 11-prong test that most owner-operators (Independent Contractors) were able to pass. The Dynamex ruling replaces Borello with a new 3-prong test, called the ABC test, to determine if a person can be qualified as an independent contractor. The three prongs that must be passed of the ABC test are as follows: A. The worker is free from the control and direction of the hirer in connection with the performance of the work B. The worker performs work that is outside the usual course of the hiring entity’s business* C. The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity *The second prong is the part of the test that owner-operators leased to trucking companies cannot pass. What Has Happened in the States Looking to Adopt A.B. 5 (Especially in California) Legal Battles A.B. 5 was passed in the fall of 2019 by the California legislature and signed by Gov. Gavin Newsom. But in January 2020, U.S. District Judge Roger Benitez issued a preliminary injunction that exempts motor carriers from A.B. 5 while the California Trucking Association’s (CTA) lawsuit against the law is adjudicated. The injunction is an exemption that allows motor carriers to continue working with owner-operators until a final decision is reached in the CTA’s lawsuit against A.B. 5. In September 2020, The Ninth Circuit heard arguments from the CTA regarding why that preliminary injunction should remain in effect. The court also heard arguments from the State of California and the Teamsters Union, who is fighting the CTA’s case. The court has not given any indication of when it will issue a ruling. Still, its decision will likely have years-long ramifications for carriers and independent contractor drivers that work in the state. Ultimately, the lawsuit could take years to make its way through various courts and potentially up to the U.S. Supreme Court, marking the importance of the Ninth Circuit’s decision to uphold the injunction or not. After a decision is reached about the temporary injunction, the actual lawsuit itself against A.B. 5 – in which CTA seeks a permanent exemption for trucking – will be heard by the U.S. District Court in Southern California. From there, any decision will likely be appealed to the same Ninth Circuit Court of Appeals that listened to the case and then, potentially, will be taken to the U.S. Supreme Court. CTA attorneys argue that a 1994 federal law (the Federal Aviation Administration Authorization Act) expressly prohibits states from enforcing laws that interfere with “prices, routes, and services” of interstate motor carriers. The CTA argues that California’s A.B. 5 does just that and should not apply to trucking operations in the state. Carrier Responses to the IC's in these states The law has already had significant consequences in California, with large and small fleets announcing a move away from using owner-operators based in California or even contracting them to haul loads in the state. Carriers have had to tell their California-based owner-operators they could no longer contract with them unless they move out of state. Some fleets are offering their owner-operators a relocation package for those who want to leave California and stay as an owner-operator. Other fleets are giving owner-operators the option to transition to a company driver if they wish to continue operating within California. Options to Navigate Similar Laws (If They Were to Pass in Your State) Open a brokerage arm The option that seems to be getting the most consideration from carriers, and which some already are using, is opening a broker arm to handle their relationships with owner-operators. This brokerage relationship will pass the “B” part of the ABC test because brokers aren’t technically in the same business as either the owner-operator or the carrier. Logistically, it could be challenging to pull off, but many have already gone through with this option. Two events are necessary to make the freight brokerage model work. The licensed motor carrier establishes a brokerage operation. Independent contractors (drivers who own their trucks and contract with companies) secure operating licenses as Licensed Motor Carriers (LMCs). There is a process with costs involved for each of those entities, but it’s possible with the proper legal advice. In most locations, the process takes five to six weeks to open a brokerage arm. To avoid liability issues and to carry out the process correctly, it’s important not to connect the brokerage division to the carrier division. Motor carriers should set up a separate brokerage division from the carrier division to avoid cross-over liability. Many now see the freight broker model as a viable option to avoid employee-based operations if A.B. 5 eventually eliminates the traditional owner-operator model. However, the Teamsters union, which has been using the employer-employee argument for the past decade in driver classification lawsuits, views any move toward a freight broker model as another way to classify drivers as independent contractors and thereby avoid funding employee benefits. Additionally, the state and federal governments fear losing out on tax revenues due to the independent contractor model, as the burden to pay taxes falls on the contractors. However, companies like ATBS help independent contractors to meet their tax burdens. Many owner-operator drivers in Southern California are already beginning to establish themselves as LLCs, even if they have just one truck. Those drivers are now receiving their loads from the trucking companies’ brokerage divisions they used to contract with as owner-operators. However, it can be a lot of work for an independent driver to file as a business entity such as a limited liability company, which could be a legal and paperwork burden beyond what an independent driver wishes to face. Unless you have someone to guide you through this, it could be a challenge. To learn more about the cost of obtaining your own authority, click on the link here. To pass ‘prong B’ of the Dynamex test, a driver would have to have an independently established business or provide trucking services to a non-trucking company. This may be the way out of A.B. 5 for owner-operators. Implement a two check system Another potential solution to AB5 is for carriers to pay their drivers via a “two-check system.” Although rare, two-check systems have been around for many years. Under the two-check system, the driver is no longer an independent contractor but a carrier employee. At the same time, the driver has a rental agreement to rent his equipment to the carrier. The first check is to the driver as an employee, and the second check is for the rental of the driver’s equipment. However, there are nuances that make this a problematic solution. For example, because the carrier is renting the truck, they technically can put any driver they want in the truck, especially if the primary driver is taking extended time off. Another example is that some believe they can pay the employee driver minimum wage and put the rest of the money towards the truck’s rental. However, it’s likely in this scenario that the IRS will consider this as shielding income. A third issue is that as an employee, the driver can no longer choose when to work, how much they want to work, what loads they want to haul, or any of the other myriad of reasons that drivers choose to be independent contractors instead of employees. There are other potential issues with the two-check system, but these are examples of the more common ones. Move outside of the state Suppose the ABC test is implemented on a state by state basis rather than as a federal mandate. In that case, your fleet can either choose to move and be domiciled outside of the state and/or you can tell your contractors to move their principal residence and CDL outside of the state. Under state-specific A.B. 5 type legislation, fleets operating in a state without A.B. 5 can still work with contractors and have them deliver loads into a state that implements an ABC test. However, both the fleet & contractor cannot be domiciled in the A.B. 5 state themselves. Additionally, if a contractor were to deliver a load in an A.B. 5 state, they would need to deadhead out of any A.B. 5 controlled state to pick up their next load. DOL Releases Text of New IC Rule for FLSA The U.S. Department of Labor (DOL) is also proposing new guidelines on employee classification, but being this is at the federal level, it may not impact the rules of the state-based A.B. 5. The guidelines would be the first set out by the DOL under the Fair Labor and Standards Act (FLSA). It appears to be an attempt to get in front of the state by state A.B. 5 laws, but it is still early in the guidelines process. The new guidelines do have similarities to the ABC test. However, these guidelines are more reasonable and would allow independent contractors to remain classified as such. The DOL defined a checklist of questions to determine whether a worker should be considered an employee or a contractor. While the potential new guidelines may not impact the state level A.B.5 rules, the proposal is still significant for the states who have not yet adopted a state-level law. The DOL says the proposed rule: Adopts an “economic reality” test to determine a worker’s status as an FLSA employee or an independent contractor. The test considers whether a worker is in business for himself/herself (independent contractor) or is economically dependent on a putative employer for work (employee). Identifies and explains two “core factors”: The nature and degree of the worker’s control over the work; and the worker’s opportunity for profit or loss based on initiative and/or investment. These factors help determine if a worker is economically dependent on someone else’s business or is in business for himself/herself. Identifies three other factors that could serve as additional guideposts in the analysis: The amount of skill required for the work, the degree of permanence of the working relationship between the worker and the potential employer, and whether the work is part of an integrated unit of production. Advises that the actual practice is more relevant than what may be contractually or theoretically possible in determining whether a worker is an employee or an independent contractor. Another key point from the DOL proposal that the American Trucking Associations (ATA) points out in a September 2020 letter to their members is the impact safety measures have on the working relationship. The ATA letter reads “(The DOL Proposal) State(s) that contractual provisions ensuring compliance with legal responsibilities, like safety, should not be considered evidence of control.” This language should help fleets to bring on better & more consistent safety measures across their fleet. It stands to say that the proposed DOL rule reinforces the goals of an industry that has long relied upon independent contractors in addition to employees, such as company drivers. According to the ATA, the federal independent contractor rule could lead to more opportunities for owner-operators across the trucking industry. “The department’s proposal aims to bring clarity and consistency to the determination of who’s an independent contractor under the Fair Labor Standards Act (FLSA),” Secretary of Labor Eugene Scalia said in a statement. “Once finalized, it will make it easier to identify employees covered by the act, while respecting the decision other workers make to pursue the freedom and entrepreneurialism associated with being an independent contractor.” It’s believed that streamlining the test to identify independent contractors will reduce worker misclassification, reduce litigation, increase efficiency, and increase job satisfaction and flexibility. The Passage of Proposition 22 On November 3, 2020, California voters easily passed Proposition 22, an exemption from AB5 for app-based drivers and couriers who use personal vehicles/transportation to provide on-demand services. Prop 22 created a hybrid model between contractors and employees; essentially a “contractor-plus limited benefits” model. Those limited benefits include: Minimum Wage: Rideshare and delivery companies must pay 120% of the local minimum wage for each hour a driver spends driving Stipend Towards Health Insurance: For drivers who usually work more than 15 hours per week Rest Time: Companies must limit app-based drivers from working more than 12 hours during a 24-hour period, unless the driver has been logged off for an uninterrupted six hours Hazard Insurance: Provide occupational accident insurance to allow drivers disability payments of 66% of their average weekly earnings during the previous four weeks before the injuries were suffered for upwards of 104 weeks Other Requirements: Prohibit workplace discrimination and: (1) develop sexual harassment policies; (2) conduct criminal background checks; and (3) mandate safety training for drivers The passage of Prop 22 will likely cause other industries to push for independent contractor classification, especially given the margin Prop 22 was passed by. Alternatively, other industries may pursue similar models in order to argue that they also fall under the new law set forth in Prop 22. It’s believed that Prop 22 should be a factor in whether the trucking industry remains exempt from AB5 as well. In a letter to the Court of Appeals for the 9th Circuit, Andrew Tauber, the attorney for the California Trucking Association, says the passage of Prop 22 takes a further whack at the idea that AB5 is a law of “general applicability.” The CTA’s argument is that AB5 was always targeted at trucking and ride-sharing and is even more so with the success of Prop 22. “Now AB5 has been amended yet again and once again rendered even less generally applicable than before,” says Tauber. Conclusion Even with the classification test in the initial DOL proposal being considered more positive for independent contractors, laws similar to A.B.5 are a real threat for fleets who work with owner-operators. This is because the DOL proposal is still in infancy and may have little impact on state-level labor laws. The DOL proposal was just issued in September 2020; therefore, many steps will still need to occur before the DOL can get the proposal passed. Suppose the DOL proposal is passed with the same guidelines as initially introduced. In that case, fleets will still need to comply with the employee classification laws in each state they are operating within. As we have seen in California, state laws could be more restrictive, leading you to be held liable for misclassification. This means your fleet should begin thinking about an action plan if A.B.5 style rules were passed federally or in your state. By getting ahead of it now, you will be able to more seamlessly pivot your business if you are forced to change the way you work with owner-operator drivers. By using some of the strategies we have listed above to work within these more restrictive laws, you should be able to continue operating successfully. New information regarding A.B. 5 and similar legislation seems to come out weekly, so make sure you stay up-to-date on any changes and be prepared. Sources: https://www.freightwaves.com/news/labor-department-tackles-employee-classification-ab5-may-not-be-affected https://www.thetrucker.com/trucking-news/business/dol-proposal-would-help-clarify-difference-between-company-drivers-owner-operators-under-fair-labor-standards-act https://www.fleetowner.com/resource-center/regulations/article/21142755/dol-proposal-to-clarify-independent-contractor-status https://www.ccjdigital.com/court-california-owner-operators-abc-ab5/ https://www.freightwaves.com/news/californias-ab5-has-carriers-rethinking-vendor-relationships https://www.joc.com/trucking-logistics/drayage/california-drayage-companies-hedge-against-ab5-brokerage_20200106.html https://www.ccjdigital.com/department-of-labor-motor-carriers-employee-classification/# https://www.jdsupra.com/legalnews/the-passage-of-prop-22-and-future-37776 https://www.freightwaves.com/news/trucking-attorney-proposition-passage-in-california-bolsters-ab5-exemption-case

Fuel is expensive right now. This causes owner-operators to change how they manage truck load choices. There are two main factors we will cover that helps Independent Contractors (ICs) understand load choices and common misconceptions we hear that come up based on these high fuel prices. Load Weight “Cheap” Backhaul freight Load Weight Our first variable comes from a simple factor: load weight. With the current high price of fuel, some people have the attitude that they won’t haul heavy loads. This is a basic misconception that can be squashed with some easy math! The technology of trucks today along with good driving habits means that load weight shouldn’t have much impact. Let’s take a look at a few examples that are extreme, but still, showcase how little load weight should matter in your decisions on choosing loads to save on fuel costs! Load Weight Flyer “Cheap” Backhaul Freight How many times have you heard an owner-operator say, “That freight is too cheap for me to haul”? In this market, we are starting to hear “that freight won’t even cover my fuel”. From a business standpoint, there are times when it’s understandable for an owner-operator to think this way. However, we often find that the rationale for owner-operators turning down freight can come from them misunderstanding the true cost of operating their business on a daily basis. Consistent fuel hikes over the last 8 months have made this attitude grow. If an owner-operator believes the freight they are offered is “too cheap”, many times they will opt to deadhead or skip a day on the road altogether rather than take the load. Deadheading can be disastrous with the high price of fuel. It’s almost always better to haul a “cheap” load so that the fuel surcharge on the load will cover that variable expense of most of your fuel. One thing we hear successful owner-operators telling us right now is that they find the lightest load possible in the backhaul lane just to cover their fuel instead of deadheading. When running a backhaul lane, we often hear them say they won’t run for anything less than a predetermined amount of money per mile. We don’t believe this is the correct way to look at freight rates. Rather than choosing loads based on revenue per mile, drivers need to look at revenue per day on a round trip or weekly basis. Fuel is a major part of this equation, and the fuel surcharge should be adequate to make up for the high prices right now. This is because whether or not a driver is hauling freight, fixed costs don’t stop. Sitting around waiting for a higher-paying backhaul also increases the likelihood of increased idle time, which is a complete sunk cost in trucking! In order to have a better understanding of what a driver needs their revenue per day to be, they need to truly know what a day off will cost them. For our clients, the average fixed cost is around $120 - $130 per day. Once they know their fixed costs per day, as well as their break-even point to cover variable expenses, rather than saying “I won’t run for anything less than $1.75 per mile”, they should be saying “I know my breakeven point is $.75 per mile, plus $125 per day, so this is what I need to cover.” Let’s look at an example of the things a driver needs to consider when deciding whether or not to wait an extra day to get a better-paying load. In this example, we will look at a common designated route between Ohio and New Jersey. The route from Ohio to New Jersey is considered a headhaul. A headhaul shipment is from a high volume area in a dedicated lane that usually pays well. The route back from New Jersey to Ohio is considered a backhaul. A backhaul shipment is the opposite of a headhaul. When a driver is in a backhaul, they want to look for a load that will get them out of there quickly and back into a headhaul lane. Think of it this way; the headhaul is subsidizing the backhaul. When leaving a backhaul market, a driver can’t afford to be super picky or they’ll force a layover on themselves that will cost them more money in the end. 9 out of 10 times, picking a load to cover fuel costs and fixed costs will be more profitable than waiting. When hauling headhaul and backhaul loads it’s important to always remember to manage the average of the backhaul/headhaul revenue instead of each load individually. Just remember, the fuel surcharge is there to keep the cost of fuel at a base level, use it to your advantage to get yourself back into the strong freight markets as quickly and safely as possible! “Cheap” Backhaul Freight Flyer

Near the end of 2020, we published an article “Run Hard Now” that attempted to portray the need for independent contractors to take advantage of the hot freight market while it lasted. At the beginning of the pandemic, and with the last election, there was much uncertainty as to how long things would stay good in trucking. At the start of the year, most in the industry predicted that the good times for trucking would continue through 2022. Life is full of twists and turns and the surge in fuel prices has changed the perceptions of many owner-operators in the last few months. Rates are still very high historically, but perceptions can shape reality. At ATBS we firmly believe an owner-operator who makes smart business conditions can still be incredibly successful. The times of very easy money may be past us, but if we take a look at running more efficiently we can dampen or eliminate the decreased rates. Just like in 2020, we want our drivers to run hard now as there is still good money to be had in trucking, however, now is a good time to take a step back and see what steps can be taken to ensure your business and personal finances are set up for success. When times are good it is easy to lose sight of the basics. That’s why we’re going to list five “Business Checks” to perform to make sure you don’t lose sight of the little things that will ensure your business is running smoothly and will help you be prepared for economic downturns. Are you an owner-operator that needs help with your bookkeeping, accounting, or taxes? Click here! Create a Budget At ATBS we call this our Profit Plan and it is something we believe is absolutely critical for any new business owner. It is going to take a look at all your fixed and variable expenses for your business as well as all home obligations. Pay rates may have decreased for you recently, and your costs have probably increased as well, so it is a good idea to refresh your budget plan. The result of a good budget is that you know exactly how many miles you need to run or revenue to generate to be profitable. Talk to your accountant about your expenses and see if there is anything you can eliminate or reduce. It is easy to lose track of rising expenses when income is simultaneously increasing. Focusing on reducing controllable expenses is critical to weathering income reductions that are out of your control. Eliminate Bad Debt Now is a great time to pay off high-interest credit cards or other bad debt. It not only takes a huge load off your shoulders, but you won’t be throwing away money at lenders. When it comes to debt, a huge problem for independent contractors is tax debt. If you have been putting off filing or paying back taxes, now is the time to get caught up and explore tax resolution services with someone who has a stellar reputation and knows trucking. If you are up to date in taxes, but typically avoid paying taxes until the deadline, now might be a good time to start paying quarterly estimates. If you get in the habit of paying taxes every quarter based on your actual income (not safe harbor estimates) you can avoid year-end penalties, and tax time will become a breeze for you. Plan for Your Truck We previously talked about managing the rising maintenance costs here. Since that article was written, maintenance costs have continued to go up. Look at what you have been spending over the last 6-12 months and talk with your accountant to make sure you are saving appropriately based on the age of your truck. Also, if you are like most drivers, your truck isn’t getting any newer and eventually, it will need to be replaced. In addition to keeping an appropriate amount of cash saved for breakdowns and repairs, consider setting aside an additional amount to pay for a down payment on a new truck in the future. Ideally, you get the most life out of your existing equipment, but while there is cash to be made get ahead of the game on your next big truck purchase. Establish an Emergency Fund While not trying to be pessimistic, think of the different things that could go wrong and see if you are prepared to meet an unexpected obstacle. Whether it’s losing your job, medical expenses, or home repairs, it is good to have a plan in place and a nest egg set aside so that a lack of finances does not add to an already stressful situation. Think of the drivers who immediately were ready to turn in their truck as diesel prices surged recently. While none of us plan perfectly, better cash planning helps you to handle those types of situations when they arise. It is important to talk to your accountant and/or a financial advisor to see what is appropriate for your unique situation. Plan for Your Future Many Americans are woefully unprepared for retirement. Some might think retirement will never happen, and they will work until their death. Let’s go with the assumption that you do want to retire someday and start taking the steps to make that dream a reality. Open a Traditional or Roth IRA and get a plan in place to funnel money aside every week or month. If you already have a head start on retirement savings, see if you can max out your contributions. If you have kids, consider setting up a 529 plan to save for your children’s education. This is by no means the limit to investment vehicles to plan for your family's future, but they are quick and easy ways to provide financial security. Always remember, if you don’t know where to start, it is worth your time and money to seek out a financial advisor! What Next? Don’t get overwhelmed with our advice. Do what you can and don’t feel like everything must be done immediately. Just like a diet plan, it's best to take it slow and steady. Your cash flow may be slightly leaner right now than it was in 2021, but there is still room to make good money and plan effectively for your future. We did not touch on managing your fuel in this article, but check out our fuel series here for more insights into improving that aspect of your business. Now more than ever it is important to prepare yourself for the unexpected and put yourself in a position to weather economic storms. Run smart now so you can run straight through the good and the bad that life and trucking will throw at you. – Over 150,000 owner-operators have made the choice to hire ATBS over the past 20 years. We offer a variety of services including accounting, bookkeeping, and tax preparation. We also offer unlimited business consulting for our RumbleStrip Professional clients. A dedicated business consultant will help you keep your business “between the lines,” just like rumble strips on the highway. If you’d like to learn more about ATBS services or want to get started today, give us a call at 866-920-2827.

On June 30, 2022, the U.S. Supreme Court denied certiorari on AB5. As a result, the injunction on AB5 that has been in place for over two years will be lifted, and AB5 will be law in California retroactive to January 1, 2020. What is AB5? Assembly Bill 5 (AB5) is a California law that restricts businesses from classifying workers as independent contractors rather than employees. The bill was driven by unions wanting to organize workers. Experts believe it will increase labor costs, create higher costs for consumers, reduce the quality of service, and most importantly, reduce the flexibility of workers. The bill is largely opposed by gig economy companies like Uber, Lyft, and DoorDash because the bill was initially created to try to combat these business models. Unfortunately, the bill will unintentionally affect independent contractor truck drivers in the state of California by making it difficult to work for themselves. Click here to view our Quick Guide to AB5 eBook! The Dynamex Ruling AB5 is based on an April 30, 2018, California Supreme Court ruling on a case known as Dynamex. The Dynamex ruling establishes a presumption that workers are employees unless the hiring company can prove otherwise. Prior to Dynamex, the Borello test (in place since 1989) was an 11-prong test that most independent contractors (owner-operators) were able to pass. The Dynamex ruling replaces Borello with a new 3-prong test, called the ABC test, to determine if a person can be qualified as an independent contractor. The three prongs of the ABC test that must be passed are as follows: The worker is free from the control and direction of the hirer in connection with the performance of the work The worker performs work that is outside the usual course of the hiring entity’s business* The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity *The second prong is the part of the test that owner-operators leased to trucking companies are unable to pass. Who is Exempt? There are some contractors who are exempt from AB5 including doctors, dentists, insurance agents, lawyers, accountants, securities brokers, real estate agents, hairstylists, and many creative professionals. If you are exempt from AB5, you must still pass the Borello test to be qualified as an independent contractor. Owner-operators are currently not exempt from AB5. The Two-Check System One potential solution to AB5 is for carriers to pay their drivers via a “two-check system”. Although rare, two-check systems have been around for many years. Under the two-check system, the driver is no longer an independent contractor but is instead an employee of the carrier. At the same time, the driver has a rental agreement to rent his equipment to the carrier. The first check is if the driver is an employee, and the second check is for the rental of the driver’s equipment. However, there are nuances that make this a difficult solution. For example, because the carrier is renting the truck they can technically put any driver they want in the truck, especially if the primary driver is taking extended time off. Another example is that some believe they can pay the employee driver minimum wage and then put the rest of the money towards the rental of the truck. However, it’s likely in this scenario that the IRS will consider this as shielding income. A third issue is that as an employee, the driver can no longer choose when to work, how much they want to work, what loads they want to haul, or any of the other myriad of reasons that drivers choose to be independent contractors instead of employees. There are other potential issues with the two-check system as well, but these are examples of the more common ones. In the meantime... The trucking industry will continue to work towards solutions because there is a significant concern that AB5 will quickly spread to other states like New Jersey, Illinois, Washington, and New York. The current administration would like AB5 and the PRO Act to be the rule of the land and would prefer all people to be employees and members of a labor union. As things stand today in regard to AB5, the most common options we see carriers offering their owner-operators with California residences are: Option 1 Move residence out of California Option 2 Get your own operating authority and drive for the trucking company’s brokerage division Significantly increased costs Significantly increased administrative responsibilities Significantly increased compliance responsibilities Option 3 Become an employee Option 4 Deadhead out of California Can deliver loads into California, but... Cannot pick-up loads in California Option 5 End relationship with carrier Conclusion With the Supreme Court refusing certiorari, AB5 is now law in California retroactive to January 1, 2020. Thus, if you are an owner-operator with a California residence, AB5 forces you to make immediate and significant changes to how you operate your trucking business. Here at ATBS, we are already seeing some of our clients moving their residences to other states like Nevada and Arizona. This is because owner-operators are independent contractors by choice and have no desire to become employees. Whatever steps you plan on taking, we hope it works out for the best. If you have any questions, feel free to give us a call or send us an email and we will assist you as best we can.

Partnership with American Truck Business Services provides access to discounted services for truckers from the industry’s largest tax and accounting firm PHOENIX – December 5, 2022 – Trucker Path, the most comprehensive and most used mobile app for North American truckers, today announced a partnership with American Truck Business Services (ATBS), the provider of tax and business solutions for truck drivers and small fleets. Accessible via www.atbs.com/trucker-path, Trucker Path users can save money with discounted ATBS offerings. “Tax and business planning and reporting are often a challenge for drivers and small fleets,” said Chris Oliver, CMO at Trucker Path. “The services that we’re offering to the Trucker Path community through our partnership with ATBS will make it easier for them to manage their businesses. These discounted offerings from ATBS are the latest example of how we’re focused on delivering relevant and valuable solutions that help our community of truckers operate their businesses more efficiently and effectively.” The Trucker Path community of owner-operators, drivers and small fleets can now access the ATBS RumbleStrip series of services through a secure client portal: RumbleStrip Essentials—Bookkeeping and tax services, including profit and loss statements, estimated quarterly and year-end federal and state tax returns, and unlimited access for tax questions. RumbleStrip Professional—All RumbleStrip Essentials services and a deduction maximizer, detailed profit plans, business and personal budget plans, industry benchmarking, and unlimited tax and business consulting. ​ RumbleStrip Enterprise—A complete back-office solution that includes all RumbleStrip Essentials and RumbleStrip Professional services as well as corporate tax returns, bank and credit card statement reconciliation, business incorporation, and unlimited tax, business and payroll consulting. Payroll and entity formation services are also available to RumbleStrip Enterprise users for an additional fee. “With Trucker Path we can now bring our comprehensive and convenient tax and accounting services to their large audience of drivers,” said Todd Amen, President and CEO at ATBS. “Through our joint efforts, we can help the entire Trucker Path community balance the time it takes to meet business responsibilities with the very important need to have free time to spend with family, friends and on personal interests. We are excited to be working with Trucker Path.” About ATBS American Truck Business Services (ATBS), headquartered in Golden, Colorado, is the industry’s largest tax and accounting firm for owner-operators and truck drivers. Since its founding in 1998, the firm has helped over 150,000 truck drivers with their businesses. For more information, visit www.atbs.com. About Trucker Path Phoenix-based Trucker Path is the provider of a wide range of truck driver-centric mobility products. Its Trucker Path app is currently in use by over 1 million professional truck drivers. Offering best-in-class navigation with truck optimized routing, the Trucker Path app also provides access to vital up-to-date information about truck stops, real-time available parking, fuel prices, weigh station status, and truck scales and wash locations. The company also offers TruckLoads, a digital freight exchange that connects drivers, carriers and brokers; COMMAND™, the industry’s first and only Operations & Driver Relationship (ODR) platform that provides small to mid-size fleets with the necessary driver and TMS technologies to successfully run a fleet; and DISPATCH, a full-service dispatch service designed specifically to serve the back-office needs of small carriers and owner-operators. For more information, visit www.truckerpath.com.