Truck Business Tax Guide: What You Need to Know For Tax Season
Tax season is upon us and as a trucking company owner you have to file your taxes on time to avoid being penalized. This guide will give you an overview of what you will need to file your taxes, however we want to clarify that this is generic tax information and NOT tax advice. We urge you to consult a tax professional for in-depth information and filing.
What Taxes Do Trucking Company Business Owners Pay?
As the owner of a trucking company, you’ll have to pay taxes on your income and self-employment. This can be confusing because there are so many different types of taxes that apply to your trucking business. Here’s a breakdown of the main ones:
- Federal income tax
- Self-employment tax (Social Security and Medicare)
- State income tax
- Local taxes (city, county and/or township)
- You may also be subject to other federal excise taxes if you drive across state lines
What about IFTA Taxes? IFTA – or the International Fuel Tax Agreement has to be filed on a quarterly basis. Check with your state on filing schedules. Efficiently filing your IFTA taxes requires excellent organization skills, and using a fuel card can be incredibly helpful in managing all of your fuel expenses and corresponding receipts.
Do you know about Thunder Funding’s Industry Leading Fuel Card? In collaboration with EFS, and with our carriers’ interest in mind, we have developed one of the most powerful fuel cards in the industry. One of the core benefits of our fuel card is our reporting feature, which has detailed transaction information you will need to pay your IFTA taxes!
For more information about our fuel card program please visit our Fuel Card page.
Forms and Documents Needed to File Taxes
If you’re filing taxes as a trucking company owner, you’ll need the following forms and documents:
- Form 1040 – This is the basic tax form that all self-employed people file.
- Form 2290 (Heavy Vehicle Use Tax) – If your vehicle weighs more than 56,000 pounds or is registered in a state other than where it’s used most often.
How to File Taxes
Gather all of your documents and receipts, determine any deductions, calculate your total income and then calculate the taxes due. You can do this by hand or use a tax software program like TurboTax or H&R Block at Home. Once you’ve done that, file electronically with the IRS (and state if applicable). If you owe money, don’t wait until April 18th to pay – make sure to set up automatic payments so it gets paid off before penalties kick in!
How to Reduce Tax Liability
- Maximize deductions. You can deduct the cost of operating your truck and business, oil and maintenance costs. If you own a home office for your trucking business, then the expenses associated with it are also deductible.
- Take advantage of tax credits. It’s important to know which tax credits are available to you as a trucking company owner so that you can take full advantage of them when filing your taxes each year.
- Consider tax-advantaged investments. There are several types of investment accounts–like 401(k)s or IRAs.
When Are Taxes Due?
This year (2023), the federal tax due date is April 18th. State and local taxes vary by state and locality, so you will have to check with your state’s department of revenue for more information.
What Happens if Taxes Are Not Filed on Time?
If you fail to file your taxes on time, the IRS will impose penalties and interest. You may also be subject to criminal prosecution, asset seizure and/or business closure.
Resources
- IRS website: The IRS website has a wealth of information on tax laws, filing requirements, and more.
- Tax preparation software: These programs can help you fill out your forms quickly and easily, saving both time and money in the process.
- Tax professionals: If you’re not confident in your ability to handle all aspects of your taxes on your own (or if there are just too many forms), consider hiring a professional accountant tax preparer who specializes in trucking-related businesses like yours!