Episode 1: Introducing Our Series & Discussing The Value of Being Proactive On Tax Planning

TRANSCRIPT

Announcer:
Coming up next on PodWheels, you'll hear the debut edition of the Tax Bootcamp Podcast from Trucker CFO.  We'll be talking with The Trucker CFO, Colton Lawrence, discussing some important considerations as we enter tax return preparation season. Here's a preview…

Colton Lawrence:
Many people, as employees, they prepare for their taxes once a year.  Come January, you start receiving your W2s, you start receiving these other tax documents, you take all of that to a tax preparer or maybe you decide to do it yourself.  When you become an independent contractor, that's just not the case.  You really need to be preparing for your taxes throughout the year.  You need to understand your profitability, understand your income and your expenses.  Preparing for that throughout the year.  So if as an independent contractor, you are just now thinking about taxes, you really are behind the eight ball.

Announcer:
Welcome to the Tax Bootcamp Podcast from Trucker CFO. Thanks for connecting with us on PodWheels.  Through its many years of service working with owner-operators and independent contractors, Trucker CFO has become a trusted resource and a leader in the trucking industry for providing tax and accounting services for professional drivers.  During this series, PodWheels  will be talking with The Trucker CFO, Colton Lawrence on a range of topics focusing on providing valuable insight for professional drivers, especially those who are owner-operators and independent contractors.  Colton will be joined during the series by Greg Thompson, the Executive Producer of PodWheels.  As you listen to their discussion, please keep in mind that every tax situation is unique and the perspective shared in this podcast should not be considered as tax advice.  If you have questions regarding your specific tax situation, you should consult a qualified tax professional.  During the podcast, we’ll be sharing information on how you can connect with Trucker CFO.  In this first edition of the Tax Bootcamp Podcast, Colton and Greg opened the discussion by looking at what owner-operators and independent contractors should be addressing early in the year with estimated taxes and getting ready to file returns for 2019.  Now, let's join the conversation with Colton Lawrence and Greg Thompson.

Greg Thompson:
Hello everybody and thanks for connecting with us on the Trucker CFO Tax Bootcamp Podcast as we go from the white lines of the highway to your bottom line right here on PodWheels.  Now folks, Trucker CFO is a company that specializes in providing accounting and tax services for owner-operators and independent contractors.  Now, as we enter another tax season, PodWheels is looking forward to working with the team at Trucker CFO as they share what we believe will be valuable insights for professional drivers.  To get this series rolling, it's my pleasure right now to introduce you to The Trucker CFO Colton Lawrence.  Colton welcome to PodWheels and thanks for teaming with us on the Tax Bootcamp Podcast.

Colton Lawrence:
Thanks for having me Greg, I'm happy to join you today.

Greg Thompson:
Colton as we mentioned, we're getting ready to enter a new tax season but before we get into the questions that we have for you on this edition of the Tax Bootcamp Podcast, I wanted you to give our listeners an overview of Trucker CFO and some highlights of your experience in the field.

Colton Lawrence:
Yeah sure.  Trucker CFO has been around for a number of years.  At Trucker CFO, we specialize in truckers.  That is what we have done for well over a decade.  We help them with their taxes, accounting, budgeting.  We really are here to help them be profitable.  As truck drivers, they are professionals at being out on the road hauling freight across the country.  Helping our economy run.  At Trucker CFO, we are there to take care of the things that they frankly don't have the time to do there from the cab of their truck.

Greg Thompson:
When you're behind the wheel and owning a business, those are two different jobs.  Behind the wheel, you want to get from A to B safely, you want to deliver the load you want to get home.  But when you're running your business, that is a whole other responsibility and so to be able to take that load off of professional drivers is so important.  How did you get involved in trucking?

Colton Lawrence:
I've been, throughout my career, associated with businesses that are in transportation.  I've worked with J. C. Penney, Loomis Armored Transportation.  I've been in and around logistics for most of my career and I had an opportunity several years ago to get involved with Trucker CFO.  To help them expand and grow their business.  Was about four years ago that I was able to purchase the business from the prior ownership group and have enjoyed that.

Greg Thompson:
Now Colton, it's very interesting to me that you've been around transportation for a long time.  What do you like about working with owner-operators and professional drivers in doing the work that you do?

Colton Lawrence:
Well, trucking is the lifeblood of the American economy.  Most of the individuals that are in transportation and most of our clients are individuals that are real people.  They're salt of the earth type people.  And that's what I enjoy about it.  Getting to know these people.  I talked with many of our clients, I work directly with many of our clients, that's what I enjoy most is just getting to know them at a personal level.

Greg Thompson:
So Colton as you know, what we want to do in the first edition of this Tax Bootcamp Podcast is walk people through the experience of filing taxes of what they've got to do from this point in the year onwards.  And as you and I talk today, it's a very important day in the tax season because it is January 15. And this date is the date that if you own a business you've got a file estimated taxes.  So can you talk to us about January 15 and what business owners should have already done at this point and what they should be doing in terms of preparing.

Colton Lawrence:
Yeah, absolutely.  You know, this is one of the biggest changes for truck drivers as they come into the industry as an independent contractor from being perhaps an employee driver.  They're used to receiving a paycheck. That paycheck has deductions for federal income tax, state income tax, if applicable.  It also has deductions for Social Security and Medicare.  Those are all deducted from their paycheck and remitted to the different tax agencies by their employer.  When you become self-employed, none of that happens anymore.  You receive a settlement from your motor carrier.  Maybe you're sourcing your own loads on contract and you get the net payment for those loads that you hauled.  And at that point you are responsible for putting some money aside for your taxes.  The federal government and most state governments require you to pay into a tax fund on a quarterly basis throughout the year.  January 15th is the due date for quarter four of 2019.  So, another big thing that happens is in the past.  Many people, as employees, they prepare for their taxes once a year.  Come January, you start receiving your W2s.  You start receiving these other tax documents.  You take all of that to a tax preparer or maybe you decided to do it yourself.  When you become an independent contractor, that's just not the case.  You really need to be preparing for your taxes throughout the year.  You need to understand your profitability, understand your income and your expenses.  Preparing for that throughout the year.  So if as an independent contractor you are just now thinking about taxes, you really are behind the eight ball.  You need to get on top of these things now and for 2020, you need to start now as opposed to this time next year.

Greg Thompson:
And that's great that you note that because everybody's tax situation is different.  But, if you were an independent contractor or you became an owner-operator during 2019 and you have not paid any estimated taxes, you could be in for quite a shock in terms of a tax bill that you might owe come April 15th.

Colton Lawrence:
Absolutely.  You know, one of the quickest ways that I see independent contractors fail, especially new independent contractors, is when we file that first tax return for them.  If they have not set aside that money or paid their estimated taxes throughout the year, they get that big tax bill and frankly most of them don't have the money set aside because they weren't planning.  It's a shock to the system.  They've got to come up with $5, $10, $15,000 or more to cover that tax bill.  And many of them end up walking away.

Greg Thompson:
If you are in that situation and you have a huge tax bill, you can set up a payment plan with the IRS.  But if you're talking $15, $20,000, that could take a long time to pay off and it puts your business in a precarious spot.

Colton Lawrence:

Absolutely.  Keep in mind you can never walk away from the tax liability.  So even if it scares them out of wanting to continue as an independent contractor, that tax liability is going to follow them.  It is never fun when you get a letter in the mail from the IRS seeking to collect on those liabilities and they're going to be issuing liens or doing other things.  Trucker CFO is there.  We can help drivers in those situations.  We do installment agreements.  We do offers and compromise.  We can work with you and with the IRS to get a plan in place. But the best thing to do is prepare ahead of time.  Don't get yourself into that situation.  Plan from the get go to properly account for your tax liabilities and manage your business.

Greg Thompson:
Well that leads us into the next question that I've got on our list for the opening of the Tax Bootcamp here on PodWheels with Trucker CFO and that is the dangers of procrastination.  As we mentioned, we're recording this on January 15th and April 15th looks like it's a long ways away.  But in the tax world and in terms of preparing, going through everything that you need to go through, every day matters.  While we're tempted to procrastinate, particularly if we get busy with our business.  What are the dangers of procrastinating?  And then on the flip side, what are the advantages of working with Trucker CFO and your team and making the most of this time and working early on your taxes?

Colton Lawrence:
In terms of procrastinating as I mentioned, if an owner-operator or independent contractor is just now thinking about their 2019 taxes.  Perhaps they're new to the industry.  Perhaps they're just procrastinating.  Those individuals will likely be hit with penalties associated with not paying their estimated taxes throughout the 2019 tax year.  Those penalties depend.  Every situation is different.  But if you end up owing money at the time of your annual tax filing and you did not pay any of your estimated taxes, you're going to owe more money than what you would have perhaps had to pay had you paid your estimated taxes.  So that is one of the drawbacks right there.  Also, tax preparers get busy.  At Trucker CFO, we get busy.  If you think that you're going to be able to put your information together on April 15th or a day or two before that and take it to a tax preparation company, you may not be able to get your taxes filed in time.  I know for Trucker CFO, we generally have a guarantee of up to a week prior to the deadline.  If you have your information to us, we’ll be able to get it finished for you.  But even if you file an extension on your tax return, you will not get hit with a late filing penalty, but you do continue to accrue interest.  Again, it's just money out of your pocket that you don't need to pay if you just get organized, file your returns on time, pay for your estimated tax liabilities on time, do all those things well in advance and save yourself some money.

Greg Thompson:
Colton, one of the things that I like to do in these situations is do a little bit of a role play.  I think it would be valuable here to talk about what a new client for Trucker CFO experiences.  So let's say that I'm an independent contractor or an owner-operator.  Maybe I'm new to the industry and I'm listening to this podcast and I say, hey, I want to contact Colton, I want to talk to this team.  I want to work with Trucker CFO.  Can you walk us through the process and again, everybody's tax situation is different.  All clients are unique.  Can you give us a little bit generally about what that new client experience might be?

Colton Lawrence:
Sure.  First of all, we at Trucker CFO need to understand what your goals are as a business owner.  And first and foremost, you need to be thinking about your operation as a small business.  That's what you are.  We will ask some questions, have a conversation with you about what those goals are.  Do you want one truck?  Are you satisfied with just one truck and running that one truck or do you want to grow a small fleet and end up with 6,7,8 trucks?  Do you eventually want to grow into one of the big boys and have a large fleet of trucks?  You know, those are all things that we will be talking about and understanding in your operation.  Once we have that understanding, we can start to build a plan around your goals that will help you be successful.  And this is the importance of planning ahead because many of those decisions impact your overall tax liability.  So in understanding your goals, we can set up a situation for you, whether it be an LLC perhaps.  With that LLC, is it going to be beneficial for that client to make what's called an S-Corp election.  All of these things are questions that we will walk through with the client in helping them set up their business out of the gate to be successful.  If you, as an owner operator or independent contractor are asking these questions a year down the road, it's not something we can't recover from, but again, it just puts you behind.  We like to get in front of these things and set you up correctly out of the gate.

Announcer:
You're listening to the Tax Bootcamp Podcast from Trucker CFO on PodWheels.  We'll get you back to the Tax Bootcamp in just a moment.  Right now, we'd like to take a moment to talk about Trucker CFO.  Through its many years of service working with owner-operators and independent contractors, Trucker CFO has become a trusted resource and a leader in the trucking industry for providing tax and accounting services for professional drivers. 

Tax season is here.  Trucker CFO is ready to go to work for you.  Do you have a team of tax and accounting professionals who understand the complexities of the trucking industry?  There are a number of ways you can contact the team at Trucker CFO.  Visit the company's website at TruckerCFO.com.  From the home page, you can fill out the get started form which will send an email to a Trucker CFO representative.  If you'd rather email equinox directly, you can reach out to the company through the following address info@truckercfo.com.  That's info@truckercfo.com. 

You can also call Trucker CFO toll free at 1-800-533-4230 and hit option two for sales.  That toll free number once again 1-800-533-4230 and choose option two.  At Trucker CFO, we understand the importance of being able to go from the white lines of the highway to the bottom line of your business.  Now let's rejoin the Tax Bootcamp Podcast from Trucker CFO.  Here's PodWheels Executive Producer Greg Thompson and The Trucker CFO Colton Lawrence.

Greg Thompson:
Hello again everybody and thanks for making the Trucker CFO Tax Bootcamp Podcast part of your day.  I'm Greg Thompson from PodWheels and The Trucker CFO Colton Lawrence, is joining us through a Zoom meeting audio connection.  And Colton everybody knows that a couple of years ago there were major revisions to the tax code.  We saw those come in in the 2018 returns.  I wanted to know, have there been additional changes or considerations that are now in place as we look at the 2019 returns?

Colton Lawrence:
So there are always changes.  Every year, there are changes to tax codes.  As you mentioned, the big changes happened with 2018.  There have been some minor additions to those changes that impact 2019 but for the most part, what a tax preparer experienced in 2018 is going to be very similar to what they experience with their 2019 tax preparation.  No major major changes at least as it pertains to truck drivers.  You know, one of the big things that we still hear about as we talk to truck drivers out there is confusion as it pertains to the per diem deduction.  The fact that as an employee or company driver, they are no longer able to take the per diem deduction.  Those deductions are part of what are called itemized deductions.  In particular that used to be reported on what's called the Form 2106.  Those are gone.  As independent contractors and small businesses, whether it be partnership or S-Corp, those deductions are taken as part of the business and so they get reported on either your Schedule C, your 1120, 1120-S, your 1065.  Again, I'm throwing out form numbers, but the point is that as a small business owner, independent contractor, owner-operator, whatever your case may be, those deductions are still available to you.  Also with depreciation as it pertains to your trucks or your trailers.  Those are all things that continue to change.  There are phase outs.  There are things that will be happening over the next few years as different parts of tax reform are phased out here in the next few years that we understand and we can help you prepare for now.  And those are big deductions that we will really take a deep dive into again in understanding your goals so that we best prepare for and help you manage your tax liabilities going into the future.

Greg Thompson:
Well, as you mentioned, all of these different forms and the numbers on them, taxes continue to be a complicated process.  And if you own a business or you're an independent contractor, you want to make sure that you are leveraging every opportunity.  Every deduction.  That you're putting yourself in the best position to maximize your profitability.  So can you talk to us again about the value of having a professional work with you on your taxes.  You've been involved in tax preparation and business advisory for a number of years. You've been involved in this industry for a number of years.  You know how difficult it is and I know that you put yourself in the shoes of the folks that you're working with who are out on the road making a living, running businesses.

Colton Lawrence:
Absolutely.  So in answering this question, I love to give an example.  I live out here in the great state of Utah.  Lots of mountains, great outdoor activities.  I love to ski.  If I happen to go out skiing one day.  I'm tearing it up and down the slopes and take a big fall.  Let's say I tear my ACL in my knee.  I could probably take that injury to a general practitioner doctor and have them repair it.  But it probably wouldn't end up being the best surgery.  That's something that the general practitioner is not going to specialize in.  They're not going to understand and know all of the details of repairing my knee.  If I tear my ACL, I'm going to search out the best orthopedic surgeon that I can find to repair my knee because I want to be able to get back out on the slopes and continue my outdoor activities.  It's the same thing with tax preparation.  There are people that specialize in different aspects of tax.  The tax code is enormous and there is no way a tax preparer can know all aspects of the tax code.  And so you see tax preparation firms specialize in different industries.  We happen to be specialists in truckers, that's what we do.  And unfortunately many truck drivers, many owner-operators and independent contractors don't understand that coming into the business and they continue to go to the big box tax preparation firms.  The flag waving guys out on the corners for the tax preparation.  In many cases, these are individuals that have gone through a few weeks of training on tax preparation and they absolutely do not know the ins and outs that impact the tax liabilities of truckers.  Throughout the year, we are oftentimes correcting and amending tax returns that have been prepared by individuals that just don't understand trucker tax.  You know, sometimes we're able to save people money, reduce the liability.  Other times they end up owing more.  Our goal is to submit your tax return accurately.  So coming back to your question, it absolutely is critical that as an independent contractor or owner-operator, you get somebody who understands your business.  There are many aspects to your business that we are able to look into and set up in ways that are going to minimize your tax liability and frankly, who wants to pay more tax than they have to.

Greg Thompson:
Colton, listening to you talk about being a specialist in the trucking industry, I need to ask you about when somebody comes to you after going to, as you said, one of the big box services or maybe it's a tax professional that was recommended by a friend.  Their taxes were done a certain way, not knowing the trucking industry.  Then they come to you and you guys open their eyes and look at what the possibilities are and you're able to save them money.  Is that one of the best parts of what you do?

Colton Lawrence:
Well, it sometimes is good.  Again, we are looking to make sure your returns are accurate.  And so in the situations where we are able to save people money, reduce their liability, that's great.  But oftentimes, it goes the other direction where a tax preparer has taken more deductions than what is available and the tax liability increases.  But really, I group these mistakes into four different sections that we oftentimes see.  One has to deal with per diem. Did they take per diem?  Did they take it correctly?  Did you get the proper number of days on the road reported on your tax return?  We oftentimes see errors associated with per diem.  Also depreciation.  Depreciation with the truck, your trailers.  We oftentimes see errors associated with depreciation on your vehicle assets.  Another one that we oftentimes see deals with self employment tax, especially for husband and wife team drivers, where the tax preparer is not properly allocating Social Security benefits for each taxpayer in a 50/50 splits.  And instead are allocating all of the Social Security benefits to the primary tax preparer.  These are things that we look at in detail and make sure are accurate.  Again so that down the line you don't need to worry about the IRS coming after you for an incorrectly prepared tax return.

Greg Thompson:
Well you bring up a point that is one of those clouds that we all kind of live with, right?  Especially if we own our own businesses, we don't want to be audited by the IRS.  That is a painful and expensive experience.  That's one of the reasons that you hire a competent tax professional to do your taxes.  And so in those cases where audits do occur, talk to us about the process that Trucker CFO takes.

Colton Lawrence:
Yeah, keep in mind a properly prepared tax return does not necessarily reduce your chance for audits.  There are absolutely things that can increase your chance for audits and we are aware of those.  We will advise our clients on those issues if they come up on a tax return.  But for the most part, audits are random.  There is a higher percentage of small business owners and individual tax preparers that are audited and there are different types of audits.  But whatever the case may be, Trucker CFO is able to represent you in that audit.  And we can help you navigate that audit with the IRS.  We can also help you navigate audits with your state tax agency if that's something that comes up.  In any case, you absolutely need to get representation.  That's very similar to if you are sued.  I would recommend you never handle some kind of lawsuit on your own.  I get that it's expensive hiring an attorney but you need that legal representation to walk you through that lawsuit.  With an audit, you are working with the IRS.  Generally the auditor, that is the IRS representative, is being paid and their employment is based on their ability to successfully collect and find additional tax funds.  So they are not your friend. You need somebody who is your friend.  You need somebody who understands the tax code, understands what they can and cannot ask for, and how to push back in situations where they don't have the right to do something a certain way.

Greg Thompson:
Colton, you've given us a lot to think about.  Some valuable information during the first edition of the Tax Bootcamp Podcast on PodWheels and of course the Tax Bootcamp Podcast is presented by Trucker CFO.  As we close, I wanted to ask you if somebody who's been listening to this has a question or they like to contact you or a member of the team at Trucker CFO, what's the best way to get in touch with Trucker CFO?

Colton Lawrence:
There's a few different ways they can get in touch with Trucker CFO.  First, you can visit our website TruckerCFO.com.  Once they're on the website they can fill out the get started form and hit submit.  That will then send an email to a Trucker CFO representative and they will be in contact with you shortly.  Also you can call our direct 800 number which is 1-800-533-4230 and hit option two for sales.  You can also email us at info@truckercfo.com.

Greg Thompson:
Hey Colton, thanks again for spending time with us and sharing your perspective on the first edition of the Trucker CFO Tax Bootcamp Podcast and as we close things out, do you have any final thoughts for us?

Colton Lawrence:
Greg I appreciate you having me on the podcast.  It's been great spending some time with you and hopefully I've been able to get out some good information for independent contractors and owner-operators.  We would love to help any of you out that have many questions.  The best piece of advice I could give you is to be prepared.  Take the time to understand your goals and get in touch with the professional.

Announcer:
That's Colton Lawrence, The Trucker CFO.  Everyone at PodWheels would like to thank you for listening to the Tax Bootcamp Podcast from Trucker CFO.  As we noted in the opening of the podcast, please keep in mind that every tax situation is unique and the perspective shared on this podcast should not be considered as tax advice.  If you have questions regarding your specific tax situation, you should consult a qualified tax professional.  The clock is already ticking on tax season and Trucker CFO is ready to go to work for you.  Do you have a team of tax and accounting professionals who understand the complexities of the trucking industry?  There are a number of ways you can contact the team at Trucker CFO, visit the company's website at TruckerCFO.com.  From the home page you can fill out the get started form which will send an email to a Trucker CFO representative.  If you would rather email Trucker CFO directly, you can reach out to the company through the following address info@truckercfo.com.  That's info@truckercfo.com.  You can also call Trucker CFO toll free 1-800-533-4230 and hit option two for sales.  The toll free number once again is 1-800-533-4230 and choose option two. 

Once again, thanks for connecting with us on PodWheels.  You can stay up to date on the latest from PodWheels by downloading the PodWheels app.  It's available in the Apple store and on Google Play.  Just search PodWheels in either store and download the app. Be on the lookout for the next edition of the Tax Bootcamp Podcast from Trucker CFO and as always stay safe out on the roads.