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Tax season is here which means it’s time to start thinking about filing your 2024 taxes. Before you start, we’re here to make sure you’re up to date on some of the significant changes that have happened over the past year that could affect your tax return . In this article, we’re going to provide you with a list of a few things that have changed and a few things that are carrying over from the previous tax season. Are you an owner-operator that needs help with your 2024 taxes? Click here! Here’s a list of a few IRS updates and recent congressional acts and their tax implications affecting your taxes in 2024 and beyond: IRS Increases the Per Diem Rates for the Transportation Industry The per diem deduction for meals and incidental expenses increased to $80 per full day and $60 per partial day as of October 1st, 2024. The rate for January 1st, 2024 through September 30th, 2024 remains unchanged at $69 per full day and $51.75 per partial day. The IRS allows for an 80% deduction of the above amounts. If you are tracking per diem this means under the new rules the deduction for a full day has increased to $64 and the deduction for a partial day has increased to $48. IMPORTANT NOTICE: You will need to calculate your total Per Diem deduction using the two different Per Diem rates . You need to keep this in mind when you are filing your 2024 taxes. IRS Grants Disaster Relief to Victims of Hurricanes Helene and Milton Taxpayers living in Alabama, Florida, Georgia, North Carolina, South Carolina, and parts of Tennessee and Virginia who filed extensions for their 2023 returns now have until May 1st, 2025 to file. Taxpayers living in the above disaster zones also have until May 1st, 2025 to file their 2024 returns and pay any taxes due. The IRS automatically grants disaster relief to affected taxpayers, if you suffered a loss due to any natural disaster in 2024 ask your tax professional if relief is available to you. The Inflation Reduction Act The Inflation Reduction Act was signed into law on August 16, 2022, and still applies in 2024. To the average self-employed truck driver, this act in many ways will have little to no effect on the way you conduct your business currently. However, it does provide new opportunities for tax savings and things to watch out for over the next 10 years. Climate-Related Tax Credits The Inflation Reduction Act provides roughly $369 billion in incentives for energy and climate-related programs. Many of the incentives will be seen in the form of tax credits. If a trucker or fleet has been on the fence about purchasing electric vehicles, these tax credits could push them to do so. However, does this mean you should go out and purchase an electric vehicle solely for the tax credit? Not necessarily. If you are considering a purchase of an electric tractor be sure to get all the facts first. The act also extended The Residential Clean Energy Credit. As a result, homeowners who install solar panels can still reduce their current year's taxes by up to 30% of the total cost of the system, including installation. If the credit reduces your tax liability to zero, any remaining credit can be carried forward to the next year through 2034. The credit is limited to 26% in 2033 and to 22% in 2034. The tax credit becomes available to taxpayers in the year installation is complete. Health Insurance and Care The Inflation Reduction Act will extend some of the subsidies brought on by the Affordable Care Act. Specifically, it extends the subsidies for health insurance premiums available through the federal marketplace or exchange. These subsidies had been set to expire in 2023 but the Inflation Reduction Act has extended these subsidies through the end of 2025. Owner-operators in need of health insurance can search the Federal Marketplace to see if they qualify for a subsidy. Be careful when applying for a subsidy to make sure your income levels qualify. Additionally, a goal of the Inflation Reduction Act is to lower some healthcare costs overall. As a result, for those covered under Medicare Part D, out-of-pocket drugs will be capped at $2,000 in 2025. More private plans and Affordable Care Act plans also offer a $2,000 cap on prescription drugs in 2025 than in prior years. For our complete Inflation Reduction Act article: Click Here Bonus Depreciation Beginning in 2018, the IRS allowed your business to take an immediate first-year deduction on any asset purchased during the year. This is because any qualified property purchased and placed in service between September 27, 2017, and December 31, 2022, was able to be depreciated by 100% of the cost of the property. In 2023 the bonus depreciation goes down by an additional 20% each year. This means in 2024 bonus depreciation was available at 60% , in 2025 it will be 40%, in 2026 it will be 20%, and in 2027 there will be no bonus depreciation. The cost of the depreciated piece of property will be recognized as an expense and lower your taxable income. Student Loan Interest Deduction Adjusted for Inflation You may be able to deduct up to $2,500 of student loan interest paid. The deduction is subject to income limitations which have gone up for 2024. For joint filers, the deduction begins to phase out with a modified AGI of $165,000 and reduces to zero at $195,000. For single and head of household filers, the phaseout begins at $80,000 and reduces to zero at $95,000. For those married filing separately, the deduction is not allowed. Key Changes for Retirement Income For those in, or approaching, retirement, the age for taking required minimum distributions (RMDs) has increased to 73. RMDs are required for retirement plans like 401(k), 403(b), 457(b), traditional IRAs, SEP, and SIMPLE IRAs. For those who turn 73 in 2024, you must take your first RMD by April 1, 2025, and you must take your second RMD by December 31st, 2025. The penalty for failing to take the RMD has decreased from 50% to 25%, and that penalty is decreased to 10% for timely corrections. 1099-K The 1099-K is likely not going to affect the trucking business per se, but if your spouse has a business or you have a side business you may see one this year. Many platforms such as eBay, Venmo, and Etsy, to name a few, will potentially be issuing these forms. The threshold for issuing 1099-Ks has changed from $20,000 and 200 transactions in 2023 and prior years to $5,000 in 2024 and future years. While the 1099-K should only be issued for business transactions, given the recent change, it is possible you could get one for reimbursing your friend for concert tickets or similar transactions. This can be corrected by contacting the issuer of the 1099-K, or, if all else fails, it can be corrected on the tax return at the time of filing. The bottom line is that being aware of these changes can potentially save you money on your taxes. Many of these changes could be temporary, so make sure you’re taking advantage of them now while they are available. If you have any questions, feel free to give us a call at (866) 920-2827 or email us at info@atbs.com. Taxes for truckers is what we do.

Every year there are changes to tax laws that may go under the radar for some 1099 truck drivers. Not knowing what these changes are may cause people to miss out on significant savings when it comes time to file their taxes . That's why we wanted to provide a few pieces of advice to make sure you aren't making the same common mistakes other owner-operators are making. Are you a self-employed truck driver who needs help with your taxes? Click here! 1. The Standard Deduction increased again, make sure to take it if it’s greater than your Itemized Deduction An estimated 90% of taxpayers use the Standard Deduction. This percentage is not expected to change due to the Standard Deduction increasing to $14,600 for single taxpayers, up from $13,850, $29,200 for married couples filing jointly, up from $27,700, and $21,900 for head of household, up from $20,800. 2. Student Loan Phase-Out Increased You may be able to deduct $2,500 of student loan interest paid. The deduction is subject to income limitations which have gone up for 2024. For joint filers, the deduction begins to phase out with a modified AGI of $165,000 and reduces to zero at $195,000. For single and head of household filers, the phaseout begins at $80,000 and reduces to zero at $95,000. For married filing separately filers, the deduction is not allowed. 3. 1099-K The 1099-K is not likely to affect the trucking business per se, but if your spouse has a business or you have a side business you may see one this year. Many platforms such as eBay, Venmo, Zelle, Etsy, PayPal to name a few, will potentially be issuing these forms. The threshold for issuing 1099-Ks has changed from $20,000 and 200 transactions in 2023 and prior years to $5000 in 2024, $2,500 in 2025, and $600 in 2026 and future years. While the 1099-K should only be issued for business transactions, given the recent change, it is possible you could get one for reimbursing your friend for concert tickets or similar transactions. This can be corrected by contacting the issuer of the 1099-K, or, if all else fails, it can be corrected on the tax return at the time of filing. 4. Key Change for Retirement Income For those in, or approaching, retirement, the age for taking required minimum distributions (RMDs) has increased to 73. RMDs are required for retirement plans like 401(k), 403(b), 457(b), traditional IRAs, SEP, and SIMPLE IRAs. For those who turn 73 in 2024, you must take your first RMD by April 1, 2025. You must also take your 2nd RMD by December 31st, 2025. The penalty for failing to take the RMD has decreased from 50% to 25%, and that penalty is decreased to 10% for timely corrections. 5. Don’t miss out on the QBI Deduction 77% of owner-operators received a QBI Deduction for 2023 because they had a net profit. If a business operates at a loss for the year, a QBI Deduction can't be claimed. The average deduction received was $7,700. As an owner-operator, chances are you will qualify for this deduction, so if you didn't take this deduction last year make sure you look into it this year. 6. Don’t Wait The most important aspect of tax time is paying tax due by April 15th. For self-employed individuals, quarterly tax payments are critical to the process of paying tax in full by April 15th. Paying Estimated taxes throughout the year greatly reduces the chances of being assessed penalties and interest. Extensions can be provided for additional time to file, however, extensions are not available for deadlines to pay your taxes. Organize and send all your tax documents as early as possible to get a head start on filing.

The last thing any trucker wants to think about is filing their taxes or wondering if they have found a good tax preparer who knows specifically about trucking taxes. But it’s better to conduct this search as early as possible. The closer you get to tax day, the harder it is to find a quality tax preparer. The following are various points to consider when choosing a tax preparer for truckers: Are you a self-employed truck driver that needs help with your taxes? Click here! Preparer Credentials and Ethics If you own a trucking business, it is recommended you hire a tax preparer who can handle complex tax issues and understands trucking taxes. A firm that hires tax professionals who are Enrolled Agents (EA) and Certified Public Accountants (CPA) not only addresses these issues, but has unlimited representation before the IRS. This is very beneficial in the event of an audit or collection proceedings. EAs and CPAs must not only pass rigorous testing requirements to achieve their designations but they must regularly complete a required number of continuing professional education hours to maintain these designations. Because these tax professionals are regulated, it is easy to verify if they have a questionable history by checking with the IRS Office of Enrollment for EAs, and the state board of accountancy for CPAs. Unenrolled preparers often have limited training and are allowed limited representation on behalf of their clients in IRS proceedings. Furthermore, without regulation, it may be difficult to check their background history. NEED HELP WITH TAXES? REQUEST MORE INFORMATION PTINS and E-filing A paid preparer must have a Preparer Tax Identification Number (PTIN) and if they prepare and file more than 10 returns for clients they must file electronically. The client copy of the tax return should show the preparer's name and PTIN in the signature area of page two of the Form 1040. Never agree to do business with a tax preparer who does not provide this information and/or refuses to provide their clients with copies of their tax returns. Signing the Tax Return In the height of a busy tax season, it is easy to make mistakes. To ensure accuracy, tax firms will use a double check process where tax returns are prepared by tax accountants and then reviewed by a senior tax accountant. The senior tax accountant handles the final review of the tax return and signing of the tax return. An experienced senior tax accountant will then discuss the tax return results with their client and make sure the client is comfortable with the numbers on the return prior to asking the client to sign it. Avoid tax preparers who do not enlist a double check process and refuse to discuss the tax return results with their clients or ask their clients to sign a blank tax return. Records and Documentation Good tax preparers will ask for all your W-2, 1099 and 1098 forms as well as other records and receipts to verify income, expenses and credits. Preparers who are willing to e-file returns using paystubs in place of W-2s are in direct violation of IRS rules and regulations. Preparer Availability Because the IRS and most States conduct audits and send letters of inquiry throughout the year, it is best to work with a preparer who maintains office hours beyond the filing deadline so they are available to answer your questions or assist with any tax return correspondence. Fee Determination Instead of asking a preparer what their fees are, ask how they determine their fees. For taxpayers with more complex returns that require several forms, it is normally better to select a firm that charges a set fee for the type of return (1040, 1065, 1120S, 1120), rather than one that charges by form. The reason is because this can be rather costly. Client Security Unfortunately, the tax preparer industry has not remained immune from the ever-increasing problem of security breaches. Never hesitate to ask a preparer how they safeguard client confidentiality in the form of physical and electronic security of their clients' information and records. If the answer is not to your satisfaction then walk away. Hire a Tax Preparer for Truckers If you need help managing your taxes, consider hiring ATBS to help you out. ATBS has been in the industry for more than 25 years and we are experts in trucking taxes. We offer a variety of services including accounting, bookkeeping, and tax preparation, specifically for truck drivers. We also offer unlimited business consulting for our RumbleStrip Professional clients. ATBS just recently launched the ATBS Hub , which makes working with us even easier! If you’d like to learn more about ATBS services or want to get started today, give us a call at 866-920-2827. Sources: http://www.consumerreports.org/cro/news/2012/02/how-to-find-a-good-tax-preparer/index.htm# http://taxes.about.com/od/findataxpreparer/a/tax_accountant.htm http://www.forbes.com/sites/kellyphillipserb/2014/01/22/11-questions-to-ask-when-hiring-a-tax-preparer/

Generally, as a rule, I have made it a habit to track many of my business’s numbers. I do this for several reasons: To benchmark against my peers To identify problem areas and To measure improvements I have made in my operation The fact is that, if you want to change anything, you first must be able to measure it. One of the simplest things is to track fuel consumption on paper. Tracking fuel mileage is something I do, because I remember the figures and notations better when I write them down. I also make little notations, so that if my actions while driving improve my fuel efficiency, I know that it’s a practice that should be continued. By the same token, if I tried something different and the results lowered my efficiency, that information will be used to ensure the practice doesn’t continue. My friend Yunsu Park recently put together an initiative using Geotab telematics to see how my practices during driving influenced the productivity and efficiency of our trucking operation. We’re not only tracking fuel mileage, but also use of time. This is important because it doesn’t matter how efficient an operation is, if it can’t complete the assigned task of delivering the freight to its destination. So far, the only numbers that have been tracked are things that can be controlled such as speed, cruise control usage, and the amount of time the equipment is being utilized. However, using the hours of service to its full extent and planning the time of day to avoid high-density traffic is greatly beneficial. The benefits of avoiding high-density traffic are better fuel efficiency, better use of available operating hours, and reduced exposure to risk. Herein is the information that we have compiled so far. In the future, there will be items that will be added such as precipitation, temperature, wind direction, and percentage of grade change on the road. Tracking your financials to gauge how your business is doing, is also important. With a service like ATBS, you’ll have easier access to know where your numbers stand, identify problems with your operation, and keep your records in good order and up to date.

Everyone wants to have a successful tax filing season and we’re here to help you with the steps to take now to ensure a smooth process. Here are a few simple steps we require to ensure everything moves as smoothly and efficiently as possible. Step 1 - Don’t Delay in Sending in Business Income and Expenses Let ATBS do the heavy lifting on your bookkeeping now before the busy season arrives! We need the full picture of your income and deductions before the tax preparation process can begin. Stay diligent in sending receipts each month and if you need to catch up in sending ATBS your receipts from prior months, now is the time for action. Don’t spend time on things that aren’t necessary. Per diem is a large deduction for self-employed truck drivers. You can save time by not having to send ATBS your E-logs and food receipts because we’ll calculate your per diem deduction based on the number of days you spent on the road. Also, see our ATBS Hub Mobile App for our per diem tracking tool to make per diem tracking even easier. Step 2 - Complete the Annual Tax Questionnaire (Tax Organizer) You’ll want to be prepared to send the below documents submitted to ATBS as soon as possible as the new year rolls over. Some of the below documents won't be available in January but that doesn't stop you from preparing and being ready for when these documents are available. A great first step is to complete and submit the tax organizer that ATBS sends in January. The tax organizer is used to kick off the whole tax process . Without a completed tax organizer, we won’t be able to get things moving. The tax organizer allows us to find every possible deduction to reduce your tax liability and this year we’re simplifying tax season with our new digital Tax Organizer, available exclusively in the ATBS Hub. Tax forms are also important. When your tax forms are available make sure you send a copy to ATBS. Forms such as: W-2 (Wages from employee jobs) 1099’s (Compensation from self-employed activity or other types of compensation) If you do not receive a 1099 look for a similar replacement document that verifies annual revenue such as a year to date (YTD), factoring statement, or other similar statements. 1095-A, 1095-B, or 1095-C (Health Insurance) Bill of Sales for purchased or sold pieces of equipment A copy of your prior-year tax return if ATBS did not file the return If you need help or have questions, please give us a call. Each year, incomplete tax organizers result in a significant slow-down in the tax return process. The sooner we receive your completed tax organizer, the sooner we can begin your tax return. Step 3 - Make Sure You’ve Paid in Full for Services Before we can get started on the tax preparation process, make sure you’ve paid your ATBS service fees in full. If you didn’t have one of our Rumblestrip full-service packages for twelve full months and you haven’t yet made the accounting completion fee payment, then it’s likely that you have outstanding tax service fees. If you are unsure about your current balance or would like to discuss payment options, please call us at 866-920-2827. Step 4 - Be Available We often have follow-up questions as we work through specific tax situations for clients. One of the most important things we ask of our clients is that you’re available to promptly respond to emails and voicemails from ATBS employees. The number one reason why the tax process is delayed is because we are unable to reach a client for answers to critical questions we need to complete their tax return. The sooner we can get things answered, the sooner we can move you along in the tax preparation process. Bonus Tip - Pay Your Quarterly Tax Estimates The purpose of filing a tax return is to report tax liability due to the IRS or file a claim for a refund. The IRS can’t assess penalties and interest if you don’t have a balance due. One of the top reasons that businesses fail is tax debt. To prepare and get ahead of any surprises you want to make all of your quarterly estimated tax payments throughout the year. Doing so will help you avoid penalties and interest from the IRS. ATBS is here to help take the burden and stress off your shoulders. Give us a call at 866-920-2827 and let one of our experienced tax professionals help you prepare your tax return.

Section 179 doesn’t increase the total amount you can deduct, but it allows you to get your entire depreciation deduction in one year, rather than taking it a little at a time over the term of an asset’s useful life. This is called first-year expensing or Section 179 expensing. (Expensing is an accounting term that means currently deducting a long-term asset.) Example In 2024, Bill buys a $25,000 van for his delivery business. Under the regular depreciation rules, Bill would have to deduct a portion of the cost each year over its five-year useful life. By deducting the van under Section 179, Bill can deduct the entire $25,000 expense from his income taxes in 2024. So he gets a $25,000 deduction in 2024 under Section 179, instead of the normal deduction he would get using regular depreciation methods. The maximum Section 179 deduction in 2024 for vehicles 6,000-14,000 pounds is $30,500. What Property Qualifies You qualify for the Section 179 deduction only if you buy long-term, tangible personal property that you use in your business more than 50% of the time. Under Section 179, you can deduct the cost of tangible personal property (new or used) that you buy for your business. Examples of tangible personal property include computers, business equipment and machinery, cell phones, etc. Property Used Primarily (51%) for Business To deduct the cost of property under Section 179, you must use the property primarily for your business. The deduction is not available for property you use solely for personal purposes or to manage investments or otherwise produce non-business income. You can take a Section 179 deduction for property you use for both personal and business purposes, as long as you use it for business more than half of the time. The amount of your deduction is reduced by the percentage of your personal use. You’ll need to keep records showing your business use of the property. If you use an item for business less than half the time, you will have to use regular depreciation instead and deduct the cost of the item over several years. Another limitation regarding the business use of property is that you must use the property over half the time for business in the year in which you buy it. You can’t convert property you previously used for personal use to business use and claim a Section 179 deduction for the cost. Annual Deduction Limit There is a limit on the total amount of business property expenses that you can deduct each year under Section 179. The maximum in 2024 is $1,220,000 with a phase out threshold beginning at $3,050,000. Once you're above $4,270,000, no Section 179 deduction is allowed. You don’t have to claim the full amount, it’s up to you to decide how much to deduct under Section 179. Whatever amount you don’t claim under Section 179 must be depreciated instead over the life of the asset. Advantages and Disadvantages of Taking Section 179 The main advantage of Section 179 is it lets you take a higher deduction immediately. By receiving a higher depreciation deduction today, a business will reduce its current tax bill. This deduction is especially helpful for new businesses that may be having cash-flow troubles. Section 179 lets businesses maximize deductions today and avoid delaying deductions to the future when the business may no longer exist. Two of the major disadvantages are as your income increases, it will move into a higher tax rate. By accelerating your business's deductions, you will have fewer options in the future to reduce your taxes when your business may be in a higher tax bracket. Another disadvantage of the accelerated method is that it has a greater risk of recaptured depreciation. You may decide to sell a long-term asset before it is considered worthless according to its depreciation schedule. If you sell the asset for more than its current accounting value, your profit will be considered recaptured depreciation. The IRS will take back your depreciation deductions as the asset did not lose as much value as planned. Your recaptured depreciation profits will be taxed as income. Accelerated depreciation systems have a higher cost of recaptured depreciation because they recognize more depreciation upfront. Proper planning can help you make the best possible decision on depreciation. Call your business service provider today to discuss your current situation and your future business plans in order to make a sound decision on depreciating your business assets.

If you’re an owner-operator truck driver, paying quarterly taxes can be a big change from the days when taxes were withheld from your paycheck as a W2 company driver . In fact, unpaid taxes is one of the leading causes of businesses failing. For this reason, it’s important to be diligent about how much money you set aside throughout the year for taxes. How much should you set aside for quarterly tax payments? Typically, January through March are often the slowest months of the year for freight cycles. This means that having a big tax payment due at the end of March can be a huge burden. Therefore, ATBS recommends that drivers set aside between 25 and 30 percent of their weekly net income for quarterly taxes. That way you aren’t caught off guard when you have to pay your quarterly taxes after a slow month. Let’s quickly break down where this 25-30% comes from. Many individuals will fall into the 10-12% income tax bracket. However, self-employed individuals will also need to set aside taxes for self-employment tax (Social Security and Medicare also known as FICA). Self-employment tax is roughly calculated as 15.3% of your business net income. So when you take 12% income tax, plus 15.3% self-employment tax, plus your state income tax, you get approximately 25-30%. ATBS recommends that you create an organizational system for setting aside money for tax payments throughout the year. At the beginning of the year, get all of your paperwork, tax documents, and finances in order to start the year off right. Then, set up an automated system for money to be transferred every week or every month into an account specifically for quarterly tax payments. It may seem like a big change at first, but setting aside money with each paycheck can quickly become part of your routine. Why is it important to pay your quarterly taxes? If you fail to pay your quarterly estimated taxes, you may be charged a late payment penalty. If you also fail to timely file your tax return , that’s another penalty tacked onto what you owe. Additionally, the IRS can apply their current interest rate of six percent to your balance due after all the penalties have been added on. All of this can add up quickly and put you and your business in a financial hole. This is why failing to pay your taxes accurately and on time is one of the leading causes for a business to fail. How much do you pay? It is recommended that owner-operators estimate taxes based on actual income since their income can vary significantly each month. Calculating and paying estimated tax payments based on your actual business income will help you avoid overpayment or underpayment of your taxes due. If you can't pay your entire estimated tax payment all at once, ensure you are at least paying what you can afford. For example, the IRS uses a safe harbor calculation to calculate a minimum quarterly tax payment due to avoid penalties. For simplicity, the safe harbor estimate is your tax liability from last year divided by four equal payments. Each quarter you would pay in one installment of the minimum amount. While this method may leave you with either an underpayment or overpayment come tax filing time, at least you won’t be penalized for not paying your quarterly estimated tax payments at all. How do you pay your quarterly taxes? You can pay your federal quarterly tax estimates online at www.irs.gov/payments or even on the IRS mobile app, IRS2go . ATBS recommends paying directly from your bank account as there is no fee. You will owe a percentage fee if you decide to pay with your credit card. Many states also allow you to make tax payments online. Each state may be a little different, so we recommend visiting your state’s Department of Revenue website to see how you can make a tax payment online. You also have the option of applying the tax refund you receive after filing your taxes to the quarterly taxes that will be due in the future. Many owner-operators want their refund right away, but this could be a good way of getting a head start on your upcoming estimated tax payments. So, should you pay your taxes quarterly? Technically you have the right to wait and pay your taxes once a year, but is it really worth it? When it comes to taxes, you should be taking small steps towards doing it right rather than handing over more of your hard-earned money by doing it incorrectly. If you have any questions about paying estimated taxes, call ATBS at 888-640-4829. One of our business consultants or tax professionals would be more than happy to assist you. Not an ATBS client? Give us a call at 866-920-2827 to enroll in our services!

Looking to jumpstart your trucking business in 2025? Check out the articles that were read the most during the past year and become a more well-rounded truck driver and business owner! Per Diem Tax Deduction Tips for Truck Drivers 5 Ways President Trump Affects Trucking The Complete Guide to Taxes for Owner-Operator Truckers Everything You Need to Know About Chain Laws Self-Driving Trucks: Are Truck Drivers Out of a Job? Important Tax Updates for This Tax Season The Best and Worst States for Outbound Freight Owner-Operator Truck Driver Tax Deductions 1099 vs. W-2 Truck Drivers: What's the Difference? The Top 25 Quick and Easy Meals for Truck Drivers

Being an independent truck driver can be a stressful business. The holiday season can certainly add to that stress, with the desire to spend the holidays at home conflicting with the need to keep your business financially sound. Some shippers will shut down on Christmas and New Years, causing drivers to lose productivity for a whole week, maybe two. However, the holiday season can be a good time to stay on the road and work as much as possible, especially considering the annual slowdown typically occurs in January and February. In fact, ATBS Benchmark data shows contractors run 7% fewer miles in January than in November and December, because there is much less freight available in January. Let’s look at the financial consequences of some choices often made during the holiday season: Ignoring fixed expenses The average daily fixed expenses for owner-operators are $150 per day. Ignoring fixed expenses to take 7-10 days off for each holiday means $1,050 - $1,500 in costs each week that aren’t being offset by any revenue. Deadheading or driving out of route to get home Basic operating costs and fuel can be 75 cents per mile. If you deadhead or drive out of route 1,000 miles you’ve added $750 to your costs, again with no revenue to offset the additional costs. Losing momentum It’s difficult to get back up to speed after the holiday shutdown. It takes time to get into the flow of freight again, which means a reduction in revenue for days or even a week after you’re back at work. Thinking short-term Gift buying and entertaining increase your home costs. Significant time off during the holidays means less revenue to offset your increased financial burden. The freight slowdown in January and February also means limited prospects of digging yourself out of the hole until March or April—right before your taxes are due on April 15th. No one should miss a holiday with their family, but it is important to protect your business as well. Many drivers tend to start heading home a week or two before the holidays—which is the wrong thing to do. Do your best to run as many days as you can right up to the Holiday. Be creative in ways to get home without sacrificing a week or two or deadheading thousands of miles. Many trucks will already be parked for the holiday, so this could be your single best freight opportunity of the year. Let’s look at a few other ways to make this season work to your advantage: Fly instead of drive Considering your fixed and variable costs, if reasonable airfare can be found, it may make more sense to park your truck securely under load and fly home for only a day or two. Fly back and get the load running while everyone else is trying to get a load out of home. Make up missed holiday time in January Even though you may miss one of the holidays with your family by working as much as possible, you can take extra time off in January and make it up to them. Freight is slower then and the additional revenue you generated at the end of the year will make your time off less stressful. Don't be picky Now is not the time to be picky about what loads to haul after Christmas and through the end of February. Plus January and February are always the worst times of the year for freight. Think long-term The only way to offset the inevitable slowdown at the beginning of the year is by planning for it in November and December. Bring in revenue then and you’ll be in a better position to pay your bills come January and February. Tax Day also will be less of a burden. The holidays are a difficult time for everyone in trucking. It’s good to remember that when dealing with others you come in contact with—shippers, receivers, regulation enforcement, etc. A lot of people feel the extra stress, so when dealing with others, applying a little holiday cheer is likely to go a long way. ATBS is here to help you get through the holiday season. And by the way…Happy Holidays!

Life is full of all kinds of unexpected events. Everything could be going great and then one day your truck has an unexpected maintenance issue. Your wife might call and say that the water heater decided to burst and you have water all over the basement floor. It’s because of these uncertainties that we need to make sure we are always prepared. Setting up an emergency fund can help to offset a financial strain. What is an emergency fund? An emergency fund is a liquid amount of cash that you can easily access if some sort of emergency pops up. I am not talking about money you might need to take a last-minute trip to the Caribbean. Getting your emergency fund started. Getting your emergency fund started can be as simple as $100. As long as you are able to meet and exceed your breakeven point each month you can continue to contribute small amounts over a long period of time. As you slowly build your emergency fund you are going to want to make sure you monitor your spending and avoid debt. How big should your emergency fund be? If you talk to any financial professional you will probably get a different answer from all of them on what the perfect amount is. Some people say your emergency fund needs to be as little as $1,000. Personally, I think it’s better to have a few months' worth of household expenses. This will help keep peace of mind in the event something does happen. Where do you put the money? After you have made the choice to start your emergency fund you need to decide where to put the money. The answer is simple. You need to stash it in a high-yielding savings account. A high-yielding savings account isn’t going to make you rich, but it keeps the money easily accessible if you need it in a hurry. It’s also better than just keeping it under your mattress. Wrapping it up. If you follow my advice and set up an emergency fund then you should feel safe the next time an unexpected financial emergency pops up in your life.

2024 is almost over which means it’s time to make sure you have minimized your tax bill for the year. There are many things you can begin doing now to make filing your tax return as easy as possible and reduce the amount you owe. Let’s take a look at a few of the most important tax moves to make before 2024 comes to an end. Whether you’ve been an owner-operator for all of 2024 or just part of 2024, we can help you get those complicated owner-operator taxes filed. Click here! 1. Buy Assets - ONLY if you Need Them If you are in need of a new truck or piece of equipment for your business, it may be worth purchasing it before the year ends. Purchasing equipment for your business could allow you to reduce your tax liability because of the depreciation rules. The tax law allows your business to take an immediate first-year deduction on any asset purchased during the year. This is because any qualified property purchased and placed in service between January 1st, 2024 and December 31, 2024, can be depreciated by 60% of the cost of the property. If the tax law doesn’t change, starting in 2025, the bonus depreciation goes down by an additional 20% each year. This means that in 2025 bonus depreciation will be 40%, 2026 will be 20%, and in 2027 there will be no bonus depreciation. The cost of the depreciated piece of property up to 60%, will be recognized as an expense and lower your taxable income for 2024. But, before you go out and make a big purchase in order to take advantage of the new depreciation rules, there are a few things to consider. This deduction shouldn’t motivate you to purchase things that you might want but won’t help your business make more money. A higher deduction in the present means you will likely have a lower deduction in the future. If your business is growing, this can lead to problems when your business moves into a higher tax bracket. If an asset is sold for more than its adjusted basis*, then tax law states any excess depreciation that was deducted on the prior year's returns (up to the amount of the sale price) is considered taxable income. This means if you end up selling an asset for more than its adjusted basis, tax law requires the IRS to take back the depreciation deduction and the recaptured depreciation profits will be taxed as income. *Adjusted basis is the original purchase price minus any depreciation deduction allowed on that piece of equipment. 2. Calculate your Per Diem Deduction Per diem is the tax deduction that the IRS allows to substantiate ordinary and necessary business expenses paid or incurred while traveling away from home. In simpler terms, it’s a deduction for meals and incidental expenses for the days you are on the road and away from home for a period of time that requires sleep or rest to complete your job duties. This deduction was eliminated for employees, also known as company drivers, under the Tax Cuts and Jobs Act (TCJA) but remains a deductible business expense for self-employed individuals or owner-operators. As of October 1st, 2024, the per diem rate increased to $80 per full day and $60 per partial day. However, the rate remains the same, $69 per full day and $51.75 per partial day, from January 1st, 2024 through September 30th, 2024. In 2024, the deduction will remain at 80% for the amounts listed above. Taxpayers are required to keep track of their days on the road in order to claim the per diem deduction. ATBS recommends keeping a per diem calendar where you mark an “X” for full days and a “/” on partial days to keep tracking per diem simple. To prove your per diem, you will also need to provide DOT ELD logs with times, dates, and locations. To get a better understanding of per diem, check out our Per Diem Tax Break article . 3. Consider Electing to be Taxed as an S-Corporation Consider setting your business up as an LLC and filing form 2553 to elect to be taxed as an S-Corporation. There are some advantages to filing as an S Corp, as long as you net enough earnings throughout the year. ATBS recommends not making this election unless your net earnings are consistently exceeding $70,000-$75,000 per year. At that point, tax savings will be greater than the costs to set up and run the corporation. As an S-Corp, you can minimize your self-employment tax by paying yourself a reasonable salary and withdrawing additional funds as distributions. Unlike a sole proprietorship, not all income (distributed and undistributed) from an S corporation is subject to self-employment tax. The self-employment tax rate is approximately 15% on all earnings from self-employment activity. Here is an example of how you can lower your self-employment taxable income when set up as an S-corporation. If you earned $60,000 of net income over the year, and pay yourself a reasonable salary of $40,000, you only have to pay self-employment tax on the $40,000. 15% (the self-employment tax rate) of $40,000 is $6,000. This means that you are now only paying $6,000 of self-employment tax rather than $9,000 (15% of $60,000 is $9,000). Paying yourself a salary that is not considered “reasonable” may send a red flag to the IRS that could potentially trigger an audit. 4. Get Caught Up on Quarterly Tax Estimates If you have not been paying your quarterly estimated tax payments, it would be a good idea to make a larger than normal 4th quarter tax payment to try and catch up. This will help pay any existing tax liability due when you file your 2024 tax return. It will also allow you to avoid penalties for not paying enough taxes during the year. The 4th quarter estimated tax payment is due January 15th, 2025. Generally, most taxpayers will avoid a penalty for underpayment of annual tax if they owe less than $1,000 or if they’ve paid at least 90% of the tax due for the current year. However, it’s HIGHLY recommended you pay taxes every quarter. Failing to pay your quarterly estimated taxes can result in additional penalties that vary based on how much you owe. Don’t let yourself get too far behind or it will become more and more difficult to get yourself caught up. ATBS recommends setting aside 25%-30% of your weekly net income for quarterly estimated tax payments. 5. Make an Individual Retirement Account (IRA) Contribution Contributions that you make towards a traditional IRA are considered tax deductible with some restrictions. You can contribute up to $7,000 per year across all IRA’s in your name and if you are over the age of 50, you can make an additional $1,000 contribution for a total of $8,000 per year. These contributions have to be made before April 15th, 2025. Additional retirement plans you can contribute to include a simplified employee plan (SEP) or a savings incentive match plan for employees (SIMPLE). A SEP has special rules attached to it, so if you have employees, make sure you understand the contribution rules. If you are the only employee of your company, then you can contribute 25% of your net income from self-employment activity, or $69,000; whichever is less. If you are a single truck owner-operator, or your company has fewer than 10 employees, you can use a SIMPLE IRA. Your annual contributions are capped at $16,000 unless you are 50 and older when it’s increased to $19,500. Find a trusted financial advisor to help you determine which method of investing for retirement is best based on your individual income needs. Additional Tips Max Out Health Savings Account (HSA) A health savings account (HSA) lets you set aside pretax income to cover health care costs that your insurance doesn't pay. You can contribute to an HSA only if you have a high-deductible health plan (HDHP) and aren't enrolled in Medicare. For 2024, the maximum contribution amounts are $4,150 for individuals and $8,300 for family coverage. If you're 55 or older, you can add up to $1,000 more as a "catch-up" contribution. HSAs have no use-it-or-lose-it provision. Any funds still in the plan at the end of the year can be rolled over indefinitely. Send Books to an Accountant At the end of the year, one of the best ways to get ready for the upcoming tax season is to send your books to an accountant. This way they can begin getting everything in order early and let you know with plenty of time if they are missing any items. If you wait until later in the tax season, it could mean that your taxes may not get done before the deadline. Prepare 1099’s for Contractors The 1099-NEC form is used to report payments made to independent contractors for services. If you paid someone who is not your employee (W-2), such as a subcontractor, $600 or more for services provided during the year, a Form 1099-NEC needs to be completed. A copy of the 1099-NEC must be provided to the independent contractor and the IRS by January 31st of the year following payment. Avoid Paying Additional Taxes on Health Insurance The 2018 tax year was the last year there would be a penalty for not having health insurance. However, you could still end up owing more in tax because of Marketplace coverage. When you apply for health insurance through the federal or state marketplace or exchange, you need to accurately estimate your total family income for the year. When signing up for marketplace insurance, it is better to slightly overstate your 2025 estimated income than to understate it. If you underestimate your income you may owe back thousands of dollars in taxes. However, if your income is below a certain amount, you may be eligible to receive a subsidy to help you pay your monthly insurance premiums. When you file your taxes, you are required to calculate how much your household income actually turned out to be. If your income is above the amount you estimated, you may have to pay some or all of the subsidized assistance you received back to the marketplace as part of your tax liability. It’s recommended that you talk to a tax professional if you need any help with any of the above items. At ATBS, we specialize in owner-operator truck driver taxes. We can walk you through each scenario above to make sure your 2024 taxes are filed correctly. Give us a call at 866-920-2827 to get started!

During the COVID era, driver turnover rates were at all-time lows for most carriers. Rates were up, fuel costs were down, and owner-operators were making money like never before. There was no need to move when they could work 4 days a week and still make record income. But over the past two and a half years, this stability has faded. Rising costs, shrinking rates, and increased challenges have driven turnover rates back up, creating widespread strain on carriers. In this article, we’ll examine the impact of high turnover on fleets and quantify the costs a carrier faces every time an owner-operator leaves. How Turnover Drains Your Fleet’s Resources 1). Departure Costs Owner-operators rarely leave at the first sign of dissatisfaction. Usually, they go through a phase of disengagement first. As their motivation drops, so does their performance, and this has serious implications for carriers: Performance and Reliability: Disengaged drivers may neglect maintenance, cut corners, or fail to deliver on commitments, harming both operations and morale. Profit and Service Impact: A driver who’s mentally checked out impacts customer service, which hurts satisfaction and, ultimately, revenue. A single disengaged driver can drag down an entire fleet's profitability over time. 2). Lost Experience Experienced owner-operators are invaluable assets. Contractors who know the ins and outs of your business operate efficiently, make quick decisions, and require less oversight. Every departure is a major investment loss—not just in skill, but in accumulated experience. Losing them means losing both expertise and smooth operations, as replacements take time to reach the same level of productivity. 3). Increased Overhead When an operator leaves, your overhead costs—rent, salaries, utilities—don’t go down. They remain fixed, but with fewer operators to generate revenue and absorb those expenses. As turnover rises, so does the impact of fixed costs on profitability. If the remaining operators—or any replacements you bring in—can’t bring in enough revenue to make up for the one who left, your profit margins take a hit. Each departure stretches resources thinner, and with fewer operators available, the impact of high trailer-to-tractor ratios becomes even more serious. Now, with limited drivers to handle each load, every gap is felt harder, and every missed opportunity or delayed shipment adds up to a higher overall cost of turnover. 4). Missed Opportunities Every operator who leaves doesn’t just take their revenue with them—they take potential profits, business relationships, and future opportunities. For example, if an operator is grossing $15,000 a month for his carrier, and the carrier has a 7% pretax margin, their departure means around $1,050 in lost monthly profit for the company. And that’s just one driver. Multiply this across every lost driver, and the cost quickly adds up. Each operator you lose also means fewer drivers to handle critical loads, creating gaps that leave customers waiting—or, worse, drive them straight to your competitors. 5). Replacement and Training Costs Recruiting, training, and onboarding a new driver is no small task. Recruitment costs alone include advertisements, exams, and processing applications. Training is equally resource-intensive, requiring orientation materials, trainers, and lost production time. Add to this the higher safety, cargo claims, and customer service costs that come with new drivers, and it’s clear that every new hire represents a significant financial investment. Even once trained, new operators may be restricted from handling your most valued customers and, with fewer miles, may not meet the contribution level of a proven operator for some time. High turnover forces you to invest continually in replacement and training—a costly cycle that can only be broken by keeping experienced drivers engaged and satisfied. Industry-Wide Impact: A Billion-Dollar Problem So, what’s the potential owner-operator turnover cost to the industry? Not only is there a cost to the carriers, but owner-operators who switch carriers incur costs that are often difficult, if not impossible, to overcome. The numbers often look like this: Cost to Carriers Estimated Number of Leased OO’s: 100,000 Estimated Average Turnover in 2020: 95% Estimated Cost of a new OO: $10,000 -------------------------------------------------------------- Estimated Total Cost of OO Turnover: $950 Million Cost to Owner-Operators 3 weeks of revenue NOT made while switching: $9,000 3 weeks of tractor and insurance payments: $4,500 (Minus expense for variable costs that didn’t happen like fuel, maintenance): - $3,100 Cost to get up to speed at the new carrier: $5,000 ------------------------------------------------------------------------ Total out-of-pocket cost to switch after one year: $14,350 Multiply $14,350 by 95,000 turned-over owner-operators, combined with the $950 million burden on carriers, reveals an industry-wide issue costing over $2 billion annually. How ATBS Can Help Your Fleet Curb Turnover and Protect Profits At ATBS, we specialize in tackling the root causes of turnover by helping owner-operators succeed, which in turn makes them more likely to stay with you. With over 200 fleets already benefiting from our services, we know that strong retention strategies work. Our resources help owner-operators manage their finances, improve their business decisions, and prepare for tax season— all at no cost to the fleet. With services like unlimited business consulting, driver coaching, monthly profit and loss statements, and tax preparation, ATBS empowers owner-operators to stay financially secure, engaged, and loyal to their carriers. Partnering with ATBS means building a fleet of satisfied, stable operators, reducing the high costs of turnover, and focusing on growth instead of replacement. Want to learn more about how a partnership with ATBS can help you with owner-operator turnover? Click here for a Fleet Success Story or click here to learn more about starting a partnership with us.