I have been slogging away at my bookkeeping for our Drive-Away business income and expenses for this year. If there is one thing I need to impress on a fellow Drive-Away driver it is KEEP ALL OF YOUR RECEIPTS!
You don’t have to be as anal about record keeping as I am. This photo was taken in early November when I came back off the road and got serious about my paperwork.
I keep our receipts in a 6-1/2 x 9 inch envelope for every trip we do. You can use letter sized manila envelopes for each month you are out. Stuff all of your receipts in the proper month’s envelope. My method works for me.
As you probably have questions about what is a deductible expense and what is not I am going to include links to a few websites that can give you a broader idea of the importance of keeping your receipts. No matter how small the charge is.
CB39 has a wealth of information for the regular truck driver or Owner/Operator. The information on this website is relevant to Drive-Away.
Rapid Tax has some good information on expense deductions for the trucking industry as well.
The Truckers Report has some fairly good information about deductible expenses.
I AM NOT A TAX PROFESSIONAL. THE ADVICE GIVEN IN THIS POST IS ONLY FOR YOUR REFERENCE. YOU WILL NEED TO CONTACT A PROFESSIONAL TAX PREPARER OR CPA.
In Drive-Away you will receive a 1099 Form for the income earned for the tax year. This 1099 Form does not include taxes withheld as a standard W-4 (it has been so long I don’t even remember what the Form name is – sorry).
If you do the work ahead of time, as I do, and present your accountant with printouts of your Profit and Loss statements, Trial Balance Sheet, and Cash Flow Sheet it is easier and quicker for the Tax Professional to get your taxes prepared. The cost for this is around $250.
If you rely on your Tax Professional to physically sort through your accumulated receipts to prepare your taxes you can expect to pay upwards of $1,000 – depending on the amount of receipts they have to slog through.
I have included a few receipts to show you what is used as a deductible expense in Drive-Away.
MEALS – There is a daily per diem of $59 per person per day that is an automatic deduction on your taxes. You don’t necessarily have to record your meal receipts but I do to keep track of our spending.
TIPS – Meal tips are deductible. It it important to keep track of tips paid for your meals.
SCALE TICKETS – This is a normal business expense and is deductible.
TOLL RECEIPTS – This is an expense that is generally REIMBURSED by the company you drive for. However, there are some Drive-Away companies that do not reimburse you for this expense. You CANNOT use toll expenses that are reimbursed to you in your settlement.
FUEL RECEIPTS – The fuel purchases made during your actual working are deductible. This INCLUDES the deadhead gas/diesel you purchase on your way to the next job. You cannot use fuel receipts when you are home and using the vehicle for errands that are not business related.
HARDWARE, GLOVES, AND TOOLS – Items you purchase on the road to repair or restock your equipment and/or supplies is deductible.
FLUIDS – Oil, windshield washer fluid, brake cleaner, ether, and other items you purchase in Drive-Away are deductible.
HOTEL – In Drive-Away it is not uncommon to stay at hotels. Even the most die hard person in the business will opt for a night in a hotel room instead of the bunk of a truck or the front seat of their vehicle.
ROADSIDE REPAIRS – This is generally a REIMBURSED expense and is not deductible on your taxes. In the event that you do not get reimbursed for a repair then it is included in your tax preparation.
TRUCK WASH – This is a deductible expense in Drive-Away. Especially this time of year with the winter driving on roads treated with chemical de-icers or road salt.
This is just a sampling of the expenses that are deductible in Drive-Away for income tax purposes. Make sure to check out the websites I have mentioned at the top of this post. There are items I have not covered here that are deductible expenses. Things such as satellite radio, audio books, bank fees, ComData fees, ATM fees when getting cash from a machine.
The more you know the easier you will be prepared for Tax Year 2013 filings. I hope this information helps you as you prepare.
Please remember. It is best to contact a CPA or Tax Professional to answer your questions.