Tax Tips
Trucking career change? Here are the 8 important questions to ask yourself

By Howard Abrams, PBS Tax & Bookkeeping

I’m a company driver and want to know about becoming an independent, self-employed driver. I am not sure whether I want to become a contract driver or completely independent. How should I proceed?

There are important questions that you should consider before going into business:

  • Are you frustrated working for others?
  • Are you a responsible individual who is organized and dedicated?
  • Are you willing to take risks (because you are taking a bigger risk running your own business rather than being a company driver)?
  • Do you have the ability to make difficult decisions about challenges that may arise?
  • Are you comfortable seeking help?
  • Are you able to afford to give up the benefits of working as a company driver such as healthcare and retirement plans, guaranteed vacations and sick pay?
  • Are you willing to work longer hours at times (because that is what you will be doing)?
  • Will your personality lend itself to acquiring, servicing and keeping clients?

Keep in mind; you will need to do paperwork and record-keeping.

You want to succeed and you can. Start by selecting advisers familiar with the trucking industry. This may include a tax preparer/bookkeeper, an attorney, an insurance agent, or someone you know who is successful in the transportation business.

Talk to other owner-operators and familiarize yourself with their operations. Ask them how they got started, how they chose their rig, and how much they paid. What do they haul? How much money do they make? How many hours do they work? Who advises them? Do they have help from their spouses, girlfriends or boyfriends?

Project how much money you expect to earn and have a trucking specialist review your projections. Compare that to what you are making now and look at the potential of future earnings five to 10 years from now. You need to consider the effect of income taxes.

You also need to compare the expected results if you lease on with a motor carrier or if you decide to go into business as an independent with your own authority. You will need to have a large cash balance on hand for working capital as you will pay out money before it comes in.

My husband and I filed a joint extension Form 4868, Application for Automatic Extension to File our Individual Income Tax Return. We have now decided to file married, filing separately. Can we do that?

Yes. Joint extension requests apply equally to each of you so if you decide to file married filing separately, you can do so.

When you prepared and filed my 2016 income tax return, I elected to apply my tax refund toward my 2017 estimated tax. I’ve changed my mind and would like my refund. Can you amend my 2016 tax return, as I have had some unexpected expenses and would like to get my refund back?

No. Once made, the election cannot be revoked at a later date. The election to apply the refund from one year to the next is binding. Your overpayment becomes an estimated tax payment that cannot be changed. So you cannot amend your tax return now to get a refund. LL

This article has been presented by PBS Tax & Bookkeeping Service, a company which has been providing income tax and bookkeeping services to the trucking industry for over a quarter century. If you would like further information, please contact us at 800-697-5153. Visit our website at www.pbstax.com.

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 or accounting professional.