Starting your own trucking business is both an exciting and challenging experience. This is even more so to truck drivers who operate their business in their lonesome. While trucking, hauling, courier, earth-moving, and other vehicle-based business entities are known for delivering positive revenues, the risks and amount of expenses incurred can also be nerve-wracking particularly when one doesn’t know how to appropriately manage such. In the quest to maximize profits, every truck driver-operator must know some of the commonly ignored business expenses cover– which surprisingly enough is built around your taxes.
Outright Costs
1. Cost of operation and maintenance tax deductions. Truck drivers who use their own vehicle in doing business can actually deduct costs incurred for operation and maintenance. Think about owning and operating a courier or hauling shop. When delivering parcels or items from your rented business office or a side garage declared as your office, travel expenses incurred while going about tasks at hand will allow you to deduct round-trip transport cost via actual expenses (complete with receipts) or via standard mileage rate.
Bad debts. When a client fails to uphold their side of the deal, this often leads to bad debts. For a bad debt to be considered part of your business operation (and in turn, be deductible to your tax return), it must be made or closely done in relation to your trucking business. Some drivers simply charge their services via notes receivables payable under a particular term. When these go unpaid or uncollected, it can be collected so long as they’re shown in your accounting books.
3. Legal or professional fees. At some point, a truck driver-operator will need to require the professional help of an accountant to fix the business books or a lawyer for accidents or litigation resulting from business activities gone wrong. The idea is such fees must be directly related to one’s business operation. Keep in mind that professional fees can be sky-high in Australia.
4. Business expenses cover for rent. When operating a hauling or trucking business, some truck operators rent out offices to accommodate clients formally. Some also have to rent out a garage for vehicles or a storage place particularly for those operating huge earthmoving vehicles. This rental expense can be deducted during the tax year.
Travel expenses. Still on tax deductions, a truck driver operator can also enjoy business expenses cover for cost incurred while on the road. It is no stranger for trucking or hauling companies to traverse thousands of miles to deliver items for a client or in behalf of a client. Cost incurred including meals and lodging as well as communication expense can be deducted from your task. Do make sure to keep receipts handy.
Insurance
Premiums. Insurance premiums from policies directly related to safeguard your venture is another business expense cover one often, forgets to enjoy. Insurance against theft, fire, flood, or natural calamities, credit insurance, liability insurance, goods in transit insurance, vehicle insurance, medical or hospitalization insurance, workcover insurance or alternative insurance, and so on are directly related to your business endeavor. These can be filed as a deduction to your taxes annually.
Interest to loans. Another commonly ignored business expenses cover is interest on loans. Many truckies start their businesses with loans to a bank or a financial institution. These loans earn interest monthly, quarterly, semi-annually or annually. All interests accrued in a particular tax year can also be deducted to your business tax return.
There are various tax deductible options serving as business expenses cover for truck drivers other than the ones above. From advertising your transport business to charitable donations done in behalf of your business, bank fees, energy efficiency initiatives, licenses and other regulatory fees, penalties and fines, office supplies and materials, utilities and so on– the list can go on. The key is to always keep track of your business expenses and have a professional comb over them every end of the year to ensure proper deductions.
Photo Credits: https://mozo.com.au/blog/2013/06/australia-a-nation-of-money-wasters/
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