As the year 2022 comes to an end, truckers need to be aware of changes in the tax code by the IRS that will affect their income. One of the best ways to save money is to get cheap commercial truck insurance coverage.
Are you a trucker in California? If you’re reading this, then the answer is probably yes. You’ve got a lot of responsibilities and a lot of expenses. But there’s one thing that can make your life easier: tax deductions.
If you want to cut down on your taxes and save money in the process, there are several things you can do to make it happen. Let’s take a look at some of the most crucial ways truckers and owner-operators can save money on their taxes.
Invest in Commercial Truck Insurance
If you’re an owner-operator and you’re looking for ways to save money on your taxes, consider investing in a commercial truck insurance policy.
When you purchase commercial truck insurance, you are protecting your vehicle. Moreover, you’re also getting the peace of mind that comes with knowing that if anything happens to your commercial vehicle or if you cause an accident, your cheap commercial truck insurance providers will have you covered.
Affordable commercial truck insurance companies cover cargo insurance and all kinds of accidents, including collisions and liability claims through personal auto insurance. It also covers damages to other vehicles and property from accidents involving your truck.
If you want to save money on taxes, which many people don’t realize, it’s essential to have commercial auto insurance. The reasoning behind this is that when you get a commercial driver’s license (CDL), you have to pay taxes on your income from driving the truck.
But if something happens and you have no commercial trucking insurance coverage for any accident that occurs while driving your vehicle, then those taxes won’t apply!
Keep Business and Personal Expenses Separate
It’s not uncommon to mix business and personal expenses when you’re a trucker. After all, it’s hard to keep track of how much time you spend driving for business versus just driving around town, visiting friends or family, or going on vacation.
But if you don’t keep your business and personal expenses separate, you could end up paying more in taxes than you need to. You can do this by using separate bank accounts and credit cards specifically for your business.
This is the best way to sure that you only pay taxes on what you need to. That’s because the IRS has rules about what kinds of expenses qualify for deductions concerning self-employment tax.
Take Advantage of Trucker Tax Deductions
The IRS has made it easier for truckers to make tax deductions, which can help you save money on your taxes for 2022.
There are two types of deductions that apply to truckers:
- Business-related ones include things like fuel costs, vehicle maintenance, insurance premiums, and more.
- Personal ones include things like medical expenses, charitable donations, mortgage interest payments, and more.
You can take advantage of this new rule by keeping track of all your expenses: gas receipts; toll receipts; oil changes; maintenance costs; parking fees; license fees; etc. Then, when it comes time to file your taxes, you can claim these expenses as deductions against your total income and save money on your taxes!
Hire a Tax Professional
If you’re a trucker and want to save money on your tax bill for 2022, then it’s time to hire a tax professional.
You may be able to file your taxes, but when it comes to filing as a truck driver, many things can trip you up. Not only does the IRS have special rules for truckers, but state and local tax codes often have a set of regulations for truckers.
This is why you should hire an accountant to prepare your taxes. They can help ensure you don’t miss anything and that your return gets filed on time, which means fewer penalties and lower interest rates on any back taxes owed.
Another benefit of hiring a tax professional is that they can often find more deductions than those who don’t have experience in this area.
Keep Track of Your Receipts and Mileage for the Year
Keeping track of your mileage and receipts throughout the year is a great way to save money on taxes. The IRS allows you to deduct qualified expenses you incur as a self-employed individual, but only if you can prove them.
The IRS requires you to save receipts and mileage logs for all your driving expenses, including fuel, tolls, maintenance, and other costs associated with running your truck.
If you don’t have any record of these expenses, you won’t be able to deduct them from your taxes when filing next year. This can lead to an increase in your tax bill, so you must keep track of everything!
Pay Your Taxes on Time
Trucker taxes are a type of tax incurred by anyone who works in the trucking industry. Truckers are required to pay these taxes to work, and they can be pretty expensive. If you’re wondering how much it will cost you to pay your taxes on time, here’s a breakdown:
First, let’s talk about what happens if you don’t pay your taxes on time. If you don’t pay within 30 days after the IRS has sent out a notice of intent to collect, there are penalties added to your bill.
This can range from 4.5% interest per month to the total amount of tax due. Truckers need to understand that these penalties are not only expensive but also very difficult for many people in this industry.
Now let’s talk about how much money it costs if you manage to pay off those fines before they get added to your bill! This penalty fee can range anywhere between $50-$500 depending on how much money was owed in back taxes at the time when it was due but not including any additional fees.
Avoid These Tax Pitfalls!
The trucking industry is a complicated one, and taxes are no exception. The average driver makes hundreds of decisions daily, each of which can impact their tax liability.
At SoCal Truck Insurance, we’re here to help you navigate the tax laws and find the best way to save money on your taxes. Our team of experts has years of experience working with truckers to help them find ways to reduce their tax burden.
Whether you’re filing quarterly estimated taxes or need more information about how to claim business expenses, our team is ready to help you make an informed decision that will result in less money spent on taxes, lower refunds, or even a smaller balance due to underpayment!
If you’re looking for a way to save money on coverage and would like to request cheap commercial truck insurance in California, email us at [email protected] or contact us at 888-891-4304 at SoCal Truck Insurance today!