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Tax Tips
Tax questions truckers are asking

By Howard Abrams
PBS Tax & Bookeeping

 

Q: I’m a company driver. What expenses are deductible for me?

A: While self-employed truckers can deduct most expenses incurred to earn their income, company drivers are limited to expenses necessary or required to perform their job. They can deduct per diem and motel, laundry and uniforms, gloves, logbooks, maps, cell phone, CB, tools or any expenses incurred that are necessary.

You must reduce the expense deduction of the above items if you were reimbursed for any expenses claimed. You also have to be aware if any part of the reimbursement was included in your W-2 income. The above expenses are shown on your tax return as itemized deductions and cannot be claimed if you take the standard deduction. If the IRS questions the deductions, they may request a letter from your employer stating you had to incur the expenses that you claimed.

Q: What if I don’t pay estimated taxes?

A: If you are worried about our economy, you may want to hold onto whatever money you have and not pay your taxes in advance. If so, you will receive your stimulus payment through a credit on your 2009 income tax return.

Q: I’m hearing about stimulus checks, but I have not received mine. When can I expect it?

A: You will not be receiving a stimulus check unless you are collecting Social Security, Railroad Retirement or Veterans Affairs benefits in which case you will receive a $250 check.

If you are a company driver, you will receive your stimulus payment through a reduction in your withholding tax thus increasing your take home pay. This could be $45 to $55 per month for the rest of the year.

If you are self-employed, you will realize your stimulus payment if you reduce your quarterly estimated taxes approximately $150 per quarter. If you do nothing, you will still receive your stimulus payment when you file your 2009 income tax return.

Q: We were looking to buy a house this year, but we are nervous about the economy. I have steady work and have survived this economy although my business is off 20 percent. But I see much lower prices than a year ago. What would you recommend?

A: It is not our practice to offer recommendations on whether or not to buy a house in this environment. That said, we will list certain points for you to consider.

If the home is for your residence and not for an investment, consider it. You should be planning to be in the home at least five to 10 years.

Possibly the same for refinancing. Financing a home now may yield the lowest rates we will see in our lifetime.

After your down payment you should have enough cash on hand so that if you should lose your job you can sustain yourself for three to five years.

If this is your first house or you did not own a primary residence in the past three years, you can receive 10 percent of the purchase price with a maximum of $8,000 credit on your tax returns (2008 or 2009) if you buy before Dec. 1, 2009.

Evaluate how much lower homes can go versus the potential value five to 10 years from now. Once a bottom has been established, do not expect a sudden increase in prices. LL

 


Everyone’s financial situation is different. This article does not give and is not intended to give specific accounting and/or tax advice. Please consult with your own tax professional.

This article is written by PBS Tax & Bookkeeping Service, a company that has been providing income tax and bookkeeping services to the trucking industry for more than a quarter-century. If you would like further information, please contact PBS at 800-697-5153 or see their Web site at
www.pbstax.com.

Aug/Sept Digital Edition