OTR Updates
Watch here for news about trends in operational expenses, tips on saving and the latest on tax law changes. If there's a topic you would like to see addressed, let me know.
Feeling the Credit Crunch? (July '08)
If you or a "friend" is in a crunch and are being offered a deal to get out, proceed with caution. We are starting to see letters coming from the IRS questioning taxpayers about 1099C information reported to the IRS, but not on returns. The 1099C is used by lenders to report when a lender forgives a debt in part or whole. The classic example is say you have a car note and the car becomes inoperable and you can't afford to finsh paying on it. The lender realizing they won't be able to collect in whole, comes back and says, pay a portion and we will forgive the rest. (This could be true of a credit card or just about any type loan.) When you agree to that, they are in effect giving you the means to pay a legal debt and as such that becomes taxable income, even though you see nothing. Now, this maybe a good way for you to get out from under, but you need to know that the amount not paid is income and has to be on your return. And don't think the IRS might miss it, byt the time they catch it 12 to 18 months after the return is filed, you add interest and maybe penality. OUCH!
One bit of good news though, if this is a house that is foreclosed on, due to tax laws passed late in 2007, you generally will not have a tax issue here, just be sure to consult a Tax person when these things come up!
Stimulus Tax Rebate: It's in the mail! (April 08)
Starting the week ending May 2, 2008, the IRS will start delivering the stimulus rebate signed into law earlier this year. For the first 3 weeks, they will be direct depositing funds to taxpayers who used direct deposit on their 2007 tax return filed by April 15th. Then they will be sending out mailed checks to those who filed by April 15th who had their refund mailed to them, used a product offered by tax professionals who withhold their fees from the tax refund, or those who had a balance due. All of those checks should be out by early July and then they will start on returns filed "late."
There are some limitations on who will receive checks, like those taxpayers with income over $75,000 or $150,00 if married and filing joint, but by now, everyone should have received a mailing from the IRS with more details. If you have a question, you are welcome to contact me.
Full Meal Allowance is Back (Jan 08)
Back in 1986 the IRS, actually the congress changed the percentage of the meal allowance that an OTR driver could take as a deduction from 80% to 50%. Well they finally realized that the OTR driver works under very restrictive conditions and decided to return the amount to 80%, but that was phased back in. For 2008, the full 80% is back for the first time. You get 80% of $52 for every day you are away from home.
Did You Pay Too Much Taxes Last Year?
Many Company Drivers believe that they don't qualify for enough deductions to make it worth while to itemize deductions on their tax return or need any kind of bookkeeping. This can be an expensive error!!! If you are a company driver and single, and you filed a 1040EZ or 1040A, then you paid too much!.. If you are married and filed the 1040EZ or 1040A, you still probably paid too much. If you question this call and I can explain. Also as for bookkeeping, I have shown many drivers that even though they are company drivers and the company pays all the truck expenses, there are still many items to keep track of so that you can get a larger tax retfund when you file. They often feel it is easier to spend a few dollars and have someone else keep track. Let me show you how.