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The most common question asked of ESI Trucking, is, "what's deductible." The answer to this
questions is: If it's a REASONABLE and NECESSARY expense for the business, it's deductible.
We've listed below several items that would be deductible and will help you reduce your income tax
liability:
Deduct a portion of your rent, renter's insurance and utilities. If you own your home, you can
deduct depreciation, home owners insurance, utilities and repairs and maintenance. Under some
circumstances, if you sell your home within two years of having a home office, you may have to
pay capital gains on the increased value of the portion of your home that was used for an office.
You should discuss this aspect in detail with your tax advisor.
If you have a home office established, and you are unable to park your delivery truck at your home
office, the round trip mileage that you put on your personal vehicle to drive to and from your delivery
truck is deductible at a rate of .375 per mile. It is necessary for you to keep a log of these
business related miles that you put onto your personal vehicle.
Business Mileage on your Personal Vehicle:
Any business mileage that you put on your personal vehicle is deductible. This includes going to
the post office to mail your bookkeeping packets, trips to the office supply, trips to your contracting
company sponsored meetings, going to Home Depot to buy work gloves. If there is a business
purpose for the the mileage, it is deductible. However, you MUST keep a log of the miles driven
and the business purpose of those miles. The deduction is currently .375 per mile and changes
each year.
Your truck rental is 100% deductible.
Your liability insurance and worker's compensation insurance is 100% deductible.
Your health insurance is 100% deductible.
Your life insurance is NOT deductible.
Your fuel expenses for your delivery truck are 100% deductible.
The fuel used in your personal vehicle is not deductible if you take the mileage deduction. If you
choose not to take the mileage deduction, but instead keep up with all of the expenses on your
personal vehicle, the percentage of expenses (gas, oil, maintenance, depreciation) that are
business related would be deductible.
Your business uniforms are 100% deductible, however, they have to be used strictly for business.
The IRS does not allow a deduction for clothes that would be worn for purposes other than
business, such as blue jeans, tennis shoes, etc.
If you purchases shirts that have your company logo on them, they are deductible.
All supplies purchased for your business are deductible. (i.e. straps for your truck)
If you travel more than 75 miles from your home office on business your meals are deductible.
That does not mean that if you drive more than 75 miles in a day, that the meals are deductible.
If you are entertaining for business, the meals are deductible. (i.e. you take your dispatcher
to lunch; or you have all of the independent independent contractor's in your hub to your house for
a Christmas Party; you buy donuts for the guys that load your trucks)
Meals and Entertainment for local delivery contractors is only 50% deductible.
If you are a long-haul contractor, you are entitled to $42 per day in per diem. This is 65%
deductible on your income tax return.
If you have damage claims, they are 100% deductible above and beyond the amount covered by
insurance.
Advertising is 100% deductible. However, if you sponsor your Son's baseball team through your
business, it is imperative that you write the sponsorship check to a non-profit organization. Going
to a sporting good's store and buying baseball bat's for the team is not deductible.
If you use contract labor to help you with your deliveries, this is 100% deductible. If you pay more
than $600 in a calendar year, your are required to provide your helper with a Form 1099.
Any wages that you pay to yourself or your employees is deductible to the business, but taxable
to the individual that the wages are paid to.
Fees paid for Incorporating your business, doing your bookkeeping and taxes are 100% deductible.
Office Supplies are 100% deductible. Additionally, if you buy a computer, fax machine or office
furniture for your business, these items are deductible as well.
If you already own a computer, fax machine, etc. and choose to put them into the business, you
can do so. However, the contributed items will be depreciated over a period of time. In some
instances you will not be allowed to deduct the full amount in the first year of business.
All repairs and maintenance on your truck are 100% deductible.
If you use your cell phone for business, it is 100% deductible. However, I would recommend
putting the cell phone in the company name, and answering the cell phone by your business
name.
Of course it is impossible to list everything that is deductible. However, if you every have a question
on something's deductibility, please do not hesitate to call us at
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