Although April 15th has passed, now is a great time to check in on your tax status and take steps towards lowering your tax liability and maximizing your deductions. Let’s take a look at the top 5 things an owner-operator can do mid-year to ensure their tax bill is manageable in the upcoming year.

MId-Year Tax Planning

Tip #1: Tax Estimates

The number one way to manage tax liability as an independent contractor is to submit quarterly tax estimates in a timely manner. Owner-operators are responsible for calculating and paying their own tax, as they do not have an employer withholding tax for them.

Financial services companies such as ATBS will calculate tax estimates based on actual earnings and email their clients when the tax estimate form is ready. With a couple of clicks you can download the tax estimate form, sign it, and submit payment to the IRS.

Not submitting tax estimates each quarter will translate to a large tax bill on April 15th. Part of being a business owner is taking responsibility for your taxes.  Be sure to review your tax estimates and confirm that your financial provider makes this process easy and manageable.

Want to better understand tax estimates as an owner-operator? Call your ATBS business consultant and bring your tax-related questions to the table.

Tip #2: Storage

Put your tax returns and supporting documents in a secure location so you can retrieve them at any time. If you apply for a loan or financial aid, you will need tax forms and filings.  It’s helpful to have these right at your fingertips. Find a central location in your home and consider investing in a secure, fireproof and waterproof safe. Whatever storage system you employ, make this a routine for all the members in your household.  

Tip #3: Monthly Sort

Designate an hour each month to collect and sort all receipts that are related to your business.  Being an independent contractor means your tax liability will be directly related to how many expenses you deduct. Often times the more you can deduct, the lower your tax liability.

Owner-operators can receive more than 100 tax deductions to lower their tax liability, and every year ATBS scans 1,000's of tax filings to ensure our clients capture every tax deduction possible.

Tip #4: Consult a Professional

The best time to review your prior year tax return is outside of peak tax season.  During this time you can identify new strategies to help lower your tax bill. Give your ATBS business consultant a call and let him/her know your tax goals so you can gain a road map towards success. Tax season is when tax professionals are managing hundreds, even thousands, of tax filings and may not be able to give every client their full attention. Consider summer and fall as the best seasons to learn about and employ new tax strategies.

Tip #5: Itemize Your Deductions

Bundling a number of larger deductions may help minimize your tax burden. Consider an early mortgage payoff, a charitable donation, a large medical expense and/or a business asset purchase. Together these write-offs could translate to a lower tax burden.

Owner-operators enjoy the freedom of owning their work schedule. However, this freedom means additional responsibilities to the IRS. Like every aspect of your business, a little bit of time and consultation with a professional could yield significant changes to your bottom line. ATBS is prepared to discuss taxes year-round but mid-year is the best time to review your tax situation and come up with a plan for year-round tax success!

This article was originally featured on ATBS.

Comments (4)

Sean Bryant

Sean is a graduate of the University of Iowa where he received a Bachelor's of Arts degree in economics. After beginning his career in banking, he found his love for marketing. Before arriving at ATBS in 2014 he spent time working for two different technology startups as well as his own freelance marketing company.

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@Vizsla Transports LLC, Thanks for your comment. Yes, taxes can be a "Burden" or they can be "Piece of Cake" depending on how you manage it! ATBS helps small truck businesses and LLCs grow their business year after year -- and ensure taxes are a "Piece of Cake". Give us a call to see how we can help your bottom line: 866-920-2827.

August 15, 2014 9:53:55 AM

@Kenneth Johnson, Congrats on getting your first truck! Yes, your priority is to focus on your driving, being safe, managing loads -- ATBS can take care of the "back end" financial matters. Please call today and mention you are a Team Run Smart member to receive a 5% discount. Phone: 866-920-2827. Good luck and I hope to hear more about your growing business!

August 15, 2014 9:49:00 AM

About to get my first truck in a couple days, and the tax thing is the one thing that worries me the worst about being in business for myself. I will be with ATBS so hopefully they can ease my stress once I get started.

August 09, 2014 20:02:14 PM

Great tips to follow all through the year to help minimize the burden come tax day each year.

August 08, 2014 10:45:48 AM