Record-keeping can be a time-consuming task. However, a simple system will make the process easier for owners and truck drivers. Documents should be updated at the end of every day. By keeping to a daily schedule, you can avoid confusion at the end of the year. Organized records are accurate records, which can save you money when tax season comes around.
All tax records must be saved for three years from the filing date. Save your receipts, profit and loss statements, quarterly tax estimates, maintenance records, and insurance and warranty documents. Keep them in different folders on your computer for easy access. Maintain paper records of your receipts as well. While digital scans are accepted by the IRS, original paper copies may be needed for larger purchases.
While on the road, electronic logging devices (ELD) track drivers’ progress and expenses. They need to be saved and easily accessed not only for inspections but also for tax purposes.
Truck drivers should keep notebooks along with a receipt envelope. The notebooks should account for the location, amount, reason, and date of all the expenses. They can also use apps on their phones to record expenses that don’t provide receipts. Some of these expenses include coin-operated machines or distance driven in personal vehicles for work. To organize your expenses, use a separate credit card just for your business. Pay the balance fully each month to avoid accumulating debt. If you’re the sole owner of the company, set up a second personal checking account and use it for your business. It’ll save you money by avoiding the fees business accounts get charged. You can pay business expenses from this account, deposit checks, and pay yourself. Together, the separate credit card and checking account will provide records of your transactions without further need for organizing.
The Importance of Proper Record Keeping
Owner-operators must report the distances traveled and the fuel used by their drivers. Distance records need to be kept for four years from the tax return’s due date or filing date, depending on which one’s longer. You’ll file the reports to the International Fuel Tax Agreement (IFTA) for review. The reports must account for every mile each truck driver has traveled and their exact fuel calculations. If they appear inaccurate, the IFTA can audit you.
The IFTA can penalize you thousands of dollars for filing incorrect information. Sometimes the interest rates are so severe that companies close.
However, when your records are organized, you can avoid an audit. They can even make tax season lucrative. Accurate records can receive reimbursements and reductions that will save your company money.
Our accredited CDL program offers driving and classroom instruction from experienced and passionate teachers. Once graduated, our truck drivers are both comfortable on the road and skilled at recordkeeping.
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