Q. I'm thinking about getting a new tractor. Would it be better for me to lease or buy?
A. If you have the option to buy the tractor at the end of the lease, there is very little difference between the two methods. In most cases leasing will require less of a down payment, but a very high balloon at the end. The IRS looks at a lease with the option to buy the same as a conventional sales contract if it is your intention to purchase the tractor. Therefore, you would be entitled to depreciate a leased piece of equipment with the option to buy. The same applies to trailers.

Note: There has been a lot of controversy about this subject. If you don't want to take our word for it, read the ruling straight from the horses mouth. Get Publication 535, "Business Expenses", and look under the headings; Rent Expenses, Lease or Purchase?  You can get a copy of Publication 535 from the IRS by dialing 1-800-829-1040 or visit the IRS web sight.


Q. Over how many years may I depreciate my tractor and/or trailer?
A. Tractors are depreciated over a 3 year period and trailers over a 5 year period. Both of these time periods are specifically addressed in the IRS code, and in the "Table of Class Lives" in Publication 946.. Tractor units are asset class 00.26, and trailers are asset class 00.27. The General Depreciation System (GDS) should be used unless your tractor is used primarily outside the United States. Then it may be depreciated over a 4 year period using the Alternative Depreciation System (ADS). Trailers are depreciated over 5 years (GDS) or 6 years (ADS). The majority of amended tax returns we file are due to incorrect depreciation. If your tax preparer is telling you anything different than that which is specifically addressed by the IRS as outlined above, I would be hesitant in believing they know anything about the trucking industry at all! This is basic knowledge of which there should be no question.

Q. What is per-diem and what do I have to do to qualify?
A. Per-diem is a tax deduction given by the IRS that takes the place of actual food expenses. You can use your driver log to calculate the number of days you were away from your home or the company you are contracted with/employed by. By using the special rules for transportation workers, this deduction can grow to several thousand dollars. If you have a co-worker, that person is entitled to the per-diem deduction also. The co-worker does NOT have to be a driver, but he/she must have a specific job on your tractor to qualify. (Yes, the co-worker can be your husband, wife, daughter, son, nephew, aunt, uncle, stranger, etc.) Per-diem applies to owner/operators and company drivers alike.

Q. Do you compile State tax returns?
A. Yes.

Q. As a Blair Tax Consulting client, what can I do to make your job easier and keep costs down?
A. There are only a few things you can do that would help us to better serve you.

        1. Do not send us more than one receipt for each purchase unless all copies are stapled together. Here’s a Deduction Example List  you can download that will help you better understand why we want receipts for everything. Keep in mind that this is not a complete list of everything that’s deductible.

        2. Place your receipts in the envelope uncrumpled if you can.  (Crumpling your receipts adds time to our processing. By keeping our hours-per-account down, we can keep our rates very reasonable).

        3. We understand that you may want to do your own bookkeeping. In doing so, please do not staple, glue, paper clip, or in any way attach your receipts to a blank sheet of paper. In order to limit weight, we  must separate receipts from blank sheets, and this adds to our hours-per-account figure. Remember, our rates are based on mailing costs which increase with weight, and hours-per-account.

        4. Do not send us grocery store or restaurant receipts. Years of experience have told us that the standard rule for transportation workers as it pertains to the per-diem rate is a much higher deduction than the total of actual meal  receipts.

Q. Do you compile corporate tax returns?
A. Yes. We compile Limited Liability Corporation and Partnership tax returns, and also have a monthly program for both of these entities which is identical to the Owner/Operator program. There is one gigantic difference though: Unlike most preparing services, we DO NOT charge a higher fee just because you're incorporated as an LLC or want your return filed as a family, sibling, or husband/wife partnership.

Q. Where can I get IRS Forms, Publications, and Instructions on the Web?
A. http://www.irs.ustreas.gov/basic/cover.html

Q. I've been thinking about incorporating. Is there any advantage to this?
A. As long as you have only one truck on the road, the advantages of incorporating are little to none, and in most cases will cost you far more than it would be worth. When you put the second tractor on the road and hire a driver to operate it, we would very strongly recommend incorporating as a Limited Liability Corporation (LLC).

Q I'm new to the net. Is there a sight that's dedicated to the trucking industry?
A. There are several on the net, and the number is growing by the month. An excellent starting place would be The Truckers Connection. There you will find a wealth of information in addition to links to other trucking sights such as magazines, tractor sales, brokers, etc. Another way would be to enter a search for "Trucking" at Yahoo. Either way, be prepared to spend a few hours of fun. If it's weather your looking for, try www.weather.com or www.intellicast.com.

Q Why do you want my receipts mailed to you monthly instead of every week like most preparing services?
A. Postage is our number one over-head expense.  By limiting the number of envelopes to 12 instead of the 52 required for weekly submissions, we are able to cut or overhead drastically, thus keeping our rates among the most reasonable in the nation.

Q Do you return my receipts when you are finished with them?
A. Absolutely! Unless you choose to use our storage program. For $36, we will store your business receipts for 3 years as required by the statute of limitations. That's a buck a month. Well worth the small fee to insure the safety of your business receipts. (Wanna know a secrete? We actually keep your receipts for 4 years so your really only paying 75 cents a month.) If you'd rather store them yourself, simply choose not to use the storage program, and your receipts will be mailed back to you.

Q Why aren't my tolls, fuel, repairs, and scale totals listed separately on my profit/loss statement?
A. These expenses are grouped under the heading "Tractor" and are deducted on line 10 of the Schedule C. We do this so as to remain in accordance with the procedures as outlined by the IRS. The Internal Revenue Service is very explicate about these types of expenses. Quoting the instructions for line 10: "Include the business portion of expenses for gasoline, oil, repairs, insurance, tires, license plates, etc." Itemizing these expenses which is often done by those unfamiliar with the trucking industry increases your chances for an audit.

Q What if I want my fuel, repairs, oil, insurance and expenses like this itemized?
A. Blair Tax Consulting is a tax consulting/preparing firm that is dedicated exclusively to the trucking industry. Everything we do for you is directly related to your tax situation and preparing you for the following April 15th. Our profit/loss statements estimate your net income from business for the entire year, and what we expect is going to happen to you the NEXT April 15th, and we do that for you each and every month. If you would be more comfortable with a complete breakdown of each and every expense, you need an accounting firm. In selecting one, be absolutely SURE they are educated in the tax laws as they pertain to the trucking industry. Most will not give you net income or tax obligation estimates. Some will for an additional fee.

Q You give profit/loss statements each and every month. Other tax preparing firms say they give monthly statements just like you in addition to quarterly and yearly statements as well. Why don't you?
A. The accounting or tax preparing firm that advertises monthly profit/loss statements in addition to quarterly and end of year statements, year-end tax preparation, etc., is doing what we like to call "loading the boat." They are trying to make you think you are getting more than you really are. Think about it... If you get a profit/loss statement each and every month, wouldn't that also include quarterly and yearly statements? Shouldn't the preparation of your tax return at the end of the year be part of the service which is included in the monthly fee?. After all, that's the main reason you hired them in the first place. Ask if they give yearly net income estimates, or tax obligation estimates for the following year? While you're at it, find out who pays the postage on the mailing of your receipts, if they give you a free month for every referral you make, and if they accept all major credit cards. When you're done, give us a call. We do ALL of that and much more at a rate that's among the most reasonable in the business.