Apr 26, 2023

How to Grow a Trucking Business as an Owner-Operator

Did you know that more than 70% of all goods in the United States are transported by truck? That’s a lot of products that need to get from Point A to Point B, and it makes commercial trucking one of the most important industries in the country. That CDL (commercial driver’s license) has a lot of value these days. If you’re a driver looking to start your own trucking business or an owner-operator with a truck already on the road, there are a few things you should know as a business owner. In this post, we’ll walk you through some tips for growing your trucking business. Let’s get started!

Changing Industry Regulations

As the trucking industry continues to evolve, it’s important for trucking businesses to anticipate changes in regulations and have a business plan that is friendly to adapt to those changes. One way to do this is to monitor developments at the state and federal level. State legislatures and Congress are constantly debating issues that could impact the trucking industry, such as hours of service, weight limits, and environmental restrictions. By tracking these debates, trucking businesses can be among the first to adapt to new regulations. Another way to anticipate regulatory change is to stay up-to-date on the latest industry news. Industry publications and websites are a great source of information on upcoming changes in the trucking industry. By monitoring these sources, small businesses can stay ahead of the curve and make the necessary changes to stay compliant with evolving regulations.

New Transportation Technology

New transportation technology is constantly emerging, and it can be hard to keep up with the latest trends. However, those who don’t stay up-to-date with the latest technology will quickly fall behind their competitors. There are many new transportation technologies that can help trucking businesses grow. One example is GPS tracking. GPS tracking can help businesses to keep track of your trucks, know where they are at all times, and ensure that they are on schedule. In line with this would be Trucking Management Systems (TMS). These systems will prove to be game changers for your business at any level. This information can be invaluable for reducing delays and boosting efficiency. Another example is electronic logging devices. These devices went from optional to mandatory and became a major hurdle for some. By staying on top of the new tech and how they operate will keep you in good shape for industry growth. By investing in and staying up to date with new transportation technology, trucking business owners like you can stay ahead of the curve and continue to grow.

Manage Your Business Finances Well

One of the biggest keys to running a successful trucking company is to manage your finances well. Many trucking businesses fail within the first year due to poor financial management. In order to grow your trucking business, it is essential that you keep a close eye on your finances and make wise decisions about where to allocate your resources. A good way to manage this is to get a good reputable line of credit for your startup to manage your operating costs and raise your business credit score. This will make you look better to lenders.

One of the most important aspects of financial management is creating and sticking to a budget. Without a budget, it is easy to overspend on unnecessary expenses and quickly become buried in debt or short on fuel costs. Make sure to map out all of your income and expenses so that you can track your progress and make adjustments as needed.

Another crucial element of financial management is making sure that your trucking company has a strong and regular cash flow to keep operations running smoothly. An invoice factoring company, also known as freight factoring, can be a major tool in this area to help get you paid on freight bills now instead of waiting out the payment terms. Many, such as TAFS, also offer a fuel card option to save you additional money on fuel prices at the pump.

Provide Excellent Service

While there are many important factors to consider as an independent contractor, one of the most important is providing excellent service. After all, without happy customers, it would be difficult to stay in business for very long. There are a few key things that you can do to make sure that your customers are always satisfied. First, ensure that your truck drivers are polite and professional at all times. Secondly, make sure that your trucks are always clean and well-maintained. Finally, go the extra mile to accommodate special requests whenever possible. By providing exceptional service, you will encourage customers to keep coming back, which is essential for long-term success.

Develop and Foster Strong Customer Relationships

Trust can be difficult and time-consuming to develop. It is vital in this industry to recognize this and strive to not only develop meaningful business relationships with your customers but to foster those relationships so that they are beneficial to all

TWIC Cards

You may be limiting yourself from loads if you do not obtain a Transportation Worker Identification Credential (TWIC). This card is issued by the Transportation Security Administration (TSA) and allows truckers to enter secure areas, such as ports and maritime facilities. In order to obtain a TWIC card, truckers must first pass a background check and fingerprinting. Once these requirements have been met, truckers can submit an application online or in person at a TWIC enrollment center. The process usually takes about two weeks, and the TWIC card is valid for five years. Having a TWIC card is a big boost for any trucker who wants to grow their business because it expands your freight possibilities, so be sure to apply for one as soon as possible.

Trucker Tax Tips, Part 1: Avoid the Pain of Procrastination Trucker Tips for a Stress-Free Tax Season: A 4-Part Tax Primer for Truckers Nobody likes paying taxes. Truckers, independent sorts that they are, are especially prickly about the government taking their hard-earned savings. It’s not just the money, there’s a lot of anxiety and frustration that comes with filing taxes each year—especially for owner-operators. Knowing the best practices of tax preparation and accounting for truckers can help reduce the work of doing taxes every year and the stress of doing them wrong. It can also help ensure you reap the full reward of any tax savings you have coming to you. We at Trucker Path have teamed with the tax experts at <a href="https://www.atbs.com/trucker-path">ATBS</a> to create a 4-part blog series to help you do just that. Part 1 of Our 4-Part Tax Primer for Truckers Make Your Estimated Tax Payments to Avoid the Pain of Procrastination Self-employed individuals, just like all businesses, are required to make estimated tax payments quarterly to the federal government as well as the state where the business operates. When you are a W-2 employee of a company, taxes are automatically withheld and submitted to the government for you. As a business owner, you’re required to do it yourself. If you are going to owe $1,000 or more, you’re required to pay your taxes in quarterly installments. Not doing so brings underpayment penalties and you’ll have to pay past interest on the money you owe. Know the Rules Your quarterly estimated tax payments include self-employment tax: The self-employment tax rate which includes Social Security and Medicare amounts to 15.3% of adjusted gross income. On top of that, you need to pay federal income tax determined using the <a href="https://www.irs.gov/pub/irs-pdf/f1040es.pdf">IRS’s Form 1040-ES</a> as well as state income tax determined by your particular state—each has its own form for estimating taxes. How to Estimate Taxes There are two main ways to estimate your tax. The first is dividing what you paid in taxes the prior year by four and paying that amount each quarter. The second is adding up your profit each quarter and calculating your tax for that amount. This method is preferable, especially for independent contractors who are just starting. It ensures tax payments are accurate which helps you avoid owing the government an unexpected amount at the end of the year. <a href="https://www.atbs.com/trucker-path">ATBS</a> uses the second, more accurate method to prepare tax estimates for their clients each quarter. Better Late Than Never If you’re late for a quarterly deadline, still make the payment. If you miss a quarterly payment, <a href="https://www.atbs.com/trucker-path"> ATBS</a> recommends that you make that payment up as soon as possible. It can help lower your tax liability and avoid penalties. Save Along the Way It's important to save money along the way to cover estimated taxes. <a href="https://www.atbs.com/trucker-path"> ATBS</a> suggests setting aside 25-28% of your weekly net income for quarterly taxes. Fool-Proof Your Plan to Pay Estimated tax payments are a pain to many a truck driver. They don’t have to be. If you’re struggling to make sense of yours, Trucker Path is offering a special discount for Trucker Path users on tax and accounting services from ATBS. <a href="https://www.atbs.com/trucker-path">Learn more here</a> Next Up in Our 4-Part Tax Primer for Truck Driver Series: Deductions Learn expert insights into the expenses truckers can use to reduce the amount of taxes they owe.

Feb 02, 2023

Trucker Tax Tips, Part 2: Use Your Powers of Deduction to Slash Your Taxes Welcome to part 2 of our 4-Part Tax Primer for Truckers created by Trucker Path and the tax experts of <a href="https://www.atbs.com/trucker-path">ATBS</a>. In this post we’ll talk about a topic truckers love: deductions. Knowing the deductions available to owner-operators can help put you on the road to minimizing the amount of taxes you’ll owe the IRS. Tax deductions are business expenses you can use to lower your amount of taxable income which in turn lowers your taxes due. Eligible deductions are expenditures that are “ordinary and necessary” for your business and you have a record confirming. Here are a few of the potential deductions that are particular to truck drivers. Meals Deduction Self-employed drivers who are away from their “tax home” overnight, or who are required to rest by hours-of-service rules, are entitled to a per diem deduction for meals. The deductible per diem rate as of <a href="https://www.irs.gov/pub/irs-drop/n-22-44.pdf">October 1, 2021</a> is $69 for a full day of work and $51.75 for a partial day of work. Partial days are the days that you depart and the days that you arrive home. For 2022 taxes, drivers can deduct 100% of the per diem rate, but starting in 2023, only 80% of the per diem rate will be deductible. Truck Depreciation Deduction Another key deduction available to drivers who purchase a major asset like a truck or trailer is depreciation. Depreciation is an accounting method for spreading the cost of an asset out over its useful life. It can help reduce a tax bill considerably. Other Potential Deductions ● Lease payments on a truck or trucks ● Diesel ● Tools and equipment ● Hotel expenses when work requires sleep to complete the duties of a job ● Fees paid for services like accounting ● Office or computer supplies ● Truck maintenance fees ● Uniforms ● Licensing and permitting ● Internet and cell phone fees directly related to business ● Commercial auto insurance premiums ● Truck washes or cleaning products Don’t Let Deductions Go to Waste Be mindful of the expenses you incur that are directly related to your trucking business and save those receipts. If you have any questions, consult a professional. Right now Trucker Path is offering a special discount for Trucker Path users on tax and accounting services from ATBS. Learn more <a href="https://www.atbs.com/trucker-path">here</a>. Next Up in Our 4-Part Tax Primer for Truck Drivers Series: Good Tax Habits Managing deductible expenses is an important part of adopting good tax habits. Learn best practices for staying organized and on top of your taxes in our next post.

Feb 08, 2023

Trucker Tax Tips, Part 3: Set Yourself Up for Success with Good Tax Habits Is this the year you get your taxes better organized than ever before? You’ve come to the right place. In part 3 of our 4-Part Tax Primer for Truckers created by Trucker Path and the tax experts at <a href="https://www.atbs.com/trucker-path">ATBS</a>, we’ll address winning tax habits for owner operators. Good driving habits keep you safe and in good stead with the law out on the road. Similarly, good tax habits can keep you stress-free in tax season and in good standing with the IRS. Document Every Deduction This is a key to not running afoul of the IRS. Long-haul truckers especially need good systems for capturing every expense as well as filing and protecting receipts and important documents throughout the year. Trying to remember important details during tax time will only create stress. Stay On Top of Per Diem Expenses To claim the per diem deduction, you have to keep track of days on the road. Keeping a per diem calendar that records full days and partial days can be a saving grace come tax season when memory can fail. ATBS clients can easily track their days on the road using the <a href="https://www.atbs.com/post/how-to-use-the-atbs-mobile-app">ATBS Mobile App</a>. You also need DOT ELD logs with times, dates, and locations for your records. Reconcile Your Expenses Daily Make a habit of ending the day updating mileage logs and recording notes for each job and the expenses incurred for each one. Technology can help. Again, the <a href="https://www.atbs.com/post/how-to-use-the-atbs-mobile-app">ATBS Mobile App</a> is a great example. It also enables drivers to scan or import receipts and documents. Keep Important Documents in Order 1. Did you buy a new truck? You need the documents so you can deduct depreciation. 2. Did you work with new carriers? Get your 1099s in order. 3. Do you have a new lease? Keep your legal documents in a safe place. 4. Do you have additional sources of income? Add them to your quarterly income estimate so you can adjust your quarterly tax payment accordingly. 5. Did you contribute to a traditional IRA or convert your IRA to a Roth IRA? The IRS needs to know. 6. Did a creditor forgive any of your debt? The cancelled debt needs to be reported to the IRS. 7. Do you have a new baby? Be sure and update your tax form—the same with any changes to your marital status. Don’t Wait Until the Last Minute Impending deadlines for filing taxes always add to the stress of tax season. It helps considerably if you’ve been keeping your logs up to date and saving your receipts throughout the year. Also, don’t wait until the last minute to start your taxes. You’re much more likely to make a math error or forget a form when you do your taxes in a panic. Getting a jump on your taxes is the best strategy. And if you choose to enlist the help of an accountant, it goes the same. Get your records and receipts over to them as soon as you can. You want to give them as much time as possible to find every conceivable deduction that can reduce your taxes. Always File Your Return. Even if you can’t afford to pay your tax bill, it’s important to file your taxes. If you don’t file a tax return, the IRS will assess a penalty immediately. The amount you owe won’t go away the longer you wait to pay; in fact, it will grow because you’ll have to pay compound interest. It can also result in your bank accounts being garnished. Consider Filing for an Extension. If you are not able to file a tax return by the deadline, it is possible to file for an extension. This extends the amount of time you have to file your return without penalty. Remember an extension to file isn’t an extension to pay. Getting an extension doesn’t relieve you from having to pay your tax bill and the interest that accumulates on what you owe. Don’t Ignore IRS Notices IRS notices can blindside truckers. They typically come by regular mail, so it can be easy to miss them if you are on the road or don’t have a steady mailing address. Attend to them as soon as you receive them. Delaying can have severe ramifications. Know When to Seek Help If you’re dealing with complicated tax issues or feeling overwhelmed by IRS requirements and deadlines, an experienced tax professional can advocate for you with the IRS and provide invaluable assistance navigating the IRS system. Right now Trucker Path is offering a special discount for Trucker Path users on tax and accounting services from <a href="https://www.atbs.com/trucker-path">ATBS</a>. Learn more here. Next Up in Our 4-Part Tax Primer for Truck Drivers Series: Avoid Trouble In general, it’s best not to mess with the IRS. Learn the things that can make you a target for an IRS audit in our next post.

Feb 23, 2023