Overdrive Magazine | Trucking Business News & Owner Operator Info
Issue link: http://read.dmtmag.com/i/611028
PULSE December 2015 | Overdrive | 5 By Max Heine Editorial director mheine@randallreilly.com T he approach of a new year is a good time for financial housekeeping, es- pecially where taxes are concerned. As with any year, if you have planned business expenses that can be moved into December from early 2016, those deductions will reduce your 2015 taxable income. "My biggest advice is to buy only equipment you need," says Mike Calahan, manager of tax services for Denver-based ATBS, the nation's largest owner-operator financial services provider. Because the tax break is relatively small, it's a waste of money to buy equipment that isn't integral to your operation. Calahan says most ATBS clients are in the 15 percent or 25 percent federal tax brackets. State income taxes average close to 5 percent. So the busi- ness expenditure will cut your taxes by only about 20 percent or 30 percent of the cost. Other year-end tax points: IRA LIMITS. The maximum contribution to an Individual Retirement Account is un- changed for 2015, $5,500. For taxpayers over 50, the limit is $6,500. IRA contributions are not taxed until they're withdrawn. OBAMACARE. Many owner-operators without health insurance made no change in 2014. "Last year it was cheaper to pay the penalty in most cases," Calahan says. For most taxpayers, failure to be insured during 2016 will carry a penalty of more than $1,000 when taxes are paid in early 2017. The Affordable Care Act's open enrollment runs through Jan. 31, but for new coverage to take effect Jan. 1, enrollment must be complete by Dec. 15. PER DIEM INCREASE. Effective Oct. 1, the per diem increased from $59 to $63. Of that $63, 80 percent ($50.40) can be claimed as a deduction. To figure the amount your taxable income is reduced, multiply $50.40 times the number of days you were away from home. SAVING FOR COLLEGE. If you want to fund a college education for children or grandchildren, an IRS 529 account can save thousands of dollars, especially compared to borrowing later and paying interest. Savings grow tax-free, and withdrawals are tax-free. DEPRECIATION. Expensing limits for depreciation under IRS Section 179 were de- creased for 2015 to $25,000, Calahan says. Congress has been working to increase that to $2 million and to make it permanent. If a decision is made to increase the limit, it might be backdated to cover 2015 taxes, he says. That could help a lot if you buy a truck or trailer this year. Don't hesitate to check with your accountant if you need further advice on these points. Year-end f inances The home office deduction can be difficult to claim. Space and equipment must be used regularly and exclusively for your business in order to qualify. it, but that was one scary moment, and that driver did not stop, either. I'm glad my dad was a truck driver and taught me how to drive. It has sure come in handy many times over." Early news reports on the mattress mover in Kumar's case, a 26-year- old resident of Linden, N.J., suggested police were continuing to investigate the accident but had not charged the driver with a crime. Details remained pending at press time as the driver faced a report- ed late-November day in court. As pondered one reader, commenting anonymous- ly at OverdriveOnline. com, "If this happened to a truck driver and his load fell off and killed a car driver, there would be lawyers coming out of the blacktop." "Trucker lives matter," said another. "How is a truck driver's life any less important than the non-commercial driver that constantly gambles our well-being to return home alive? I've heard it one too many times from other truck drivers they rarely received enough financial compensation to cover expenses after being involved in an accident that was not their fault. "The lack of respect toward the men and women of our country who happily commit their lives to deliver freight is disheartening and damn shameful."