When you lose track of your income, devalue the amount of tax you are supposed to pay or if you default your tax payment responsibility, the success of your trucking business shrinks to the unlikely. Most people fail to pay their taxes either because they lost some 1099 records or because they simply forgot. This shouldn’t be an excuse to an owner operator however, because it is mistakes like this that could bring your whole business down. Continue reading to learn more.
Be efficient at tracking your income
Giving out your old address to the IRS or mixing your mails together is not a mistake any owner trucking company should ever make. To start with, the industry offers low profit margins especially to the small and medium sized businesses, which means that a fine of an extra thousand dollars could be costly to your small business. Most of the successful business and that includes Status transportation use advanced software to track every income they make and calculate or the payments they are supposed to make to the IRS.
Always File for Tax Compliance
Sometimes you might find yourself owing much more money to the IRS that you can pay as a business. Some trucking companies make the mistake of ignoring to file for compliance after realizing they won’t be able to pay, and in return, the IRS does the filing for them. Of course when the IRS files for you end up paying more penalties and higher taxes than you originally should have. But it is also crucial to consult a tax professional before you can make any decisions for your business. A god tax consultant can advise you appropriately on how much you can pay at the moment and still remain with enough cash to run your operations, they can direct you on the roads to take in order to avoid a tax pile up.
Pay the taxes as soon as possible
At status transportation, paying taxes is always the first expenditure we make. Likewise, never fail to pay your dues to the IRS when you have the money. When you don’t have the money, ask IRS if they can put you under a payment plan where you can pay the taxes in a period no longer than 72 months. This plan is common for small and medium businesses with taxes amounting to $50,000 or less. You might also want to consider opening an electronic federal tax payment system that helps you pay weekly payments based on how much you made that week.
Stay in Contact with your Tax Professionals
As an owner trucking company, it is very important to have ties to someone who really understand tax laws in relation to the trucking world. If you don’t know anyone, the Internet is there to help. Visit trucking forums and ask all about the IRS in relation to your business. And finally, ensure that you never allow your taxes to pile up to unbearable amounts.