Tax Tips
Year-end and critical tax time preparation

By Howard Abrams, PBS Tax & Bookkeeping

I've noticed my bank account balance keeps getting larger, and I have taken more money this year. I have had more business activity, but I'm realizing that lower fuel costs are a big part of the reason. Now I'm worried I may owe income taxes. Is there still time to figure out how I stand with my taxes?

Yes, but it has to be done immediately. We need to know what your profit is year to date. Also, you need to inform us of any equipment changes and of any other changes to your income or expenses as compared to last year's income tax return. We will project what your tax liability might be. We can then explore possible year-end tax saving ideas including opening a retirement plan. All of this must be done prior to the end of the year.

Are there any tax changes I should be aware of?

Yes. Be aware that:

  • The Affordable Care Act for 2015 and beyond bites harder in the area of penalties and enforcement. Open enrollment for next year ends Jan. 31, 2016.
  • Business standard mileage rates are now deductible at 57.5 cents per mile up from 56 cents.
  • Per diem changed as of Oct. 1, 2015, to $63 per day up from $59 per day. It's still 80 percent deductible.

Section 179 first-year depreciation for 2015 is now limited to $25,000. As you can see, the incentive for equipment purchases has been greatly reduced. We will alert you to any last-minute changes.

What paperwork and information do I put together to prepare my 2015 income taxes?

Listed below is what you will need for your income tax preparation. Most tax preparers have income tax organizers to help you organize your information and lists of what is needed. You can download ours at PBSTax.com.

Items you should have received by early February:

  • W-2s
  • 1099s from all companies and/or individuals you've done work for - brokers, motor carriers, independent businesses, etc. You must report all income regardless of whether you receive a 1099 or not.
  • Weekly or monthly settlements if we are summarizing.
  • 1099s or end-of-year statements from banks for interest and dividend income, stock and mutual funds, and mortgage interest statements.
  • Schedule K-1 if you are involved in any partnerships or S corporations.
  • W-2P or 1099-R for pension and annuity income and distribution.
  • 1099s and year-end statements for unemployment compensation, social security income and state income tax refund.
  • Nights away from home for per diem.
  • Determine if you have made, or are going to make, any contributions to an IRA, SEP-IRA, and 401(k) plans.
  • Indicate any estimated taxes paid with corresponding dates.
  • 1098s for mortgage interest paid along with property taxes paid.
  • Contracts for the purchase and/or sale of equipment or property, including refinancing.
  • Confirmations from charities for donations in excess of $250 each.

Remember, if you have employees or independent contractors, you are also required to send out your W-2s and 1099s by Jan. 31. This includes self-employed individuals who have hired their children to do work for their business. You must issue W-2s to your children to get the deduction.

I am a company driver. What is deductible when I'm on the road?

While self-employed individuals can generally deduct any expenses incurred to earn their income, company drivers are limited to non-reimbursed expenses required by their employer. You are entitled to per diem for meals on the road and motel expenses. A good rule to follow for deductions would be any expenses incurred that are necessary or required in the performance of your job and/or operation of the truck but are not reimbursed by your company, such as uniforms, gloves, logbooks, maps, cellphone, CB, etc. Remember, as a company driver, these deductions are available only if you itemize your deductions (i.e., not claiming the standard deduction). 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.