I have a chance to run small automotive parts, mainly tires for a decent sized Logistics company {personal truck,with a trailer sometimes} about 350 miles per day,5 days a week, company umbrella type insurance, independent contractor,they don't take taxes out,and get $600/week....is this a lucrative opportunity for me to jump on right now? Or will tax time next spring become a nightmare since they haven't taken taxes out? Can i write off all my expenses being a independant contractor? like say repairs,fuel,say a new set of injectors because the old ones went bad? ...what do you guys think? the truck has a ways to go..only has 50,000 miles on it..i appreciate the input....Greg

 

600 a week gross for 1750 miles with your truck doesn't seem like enough $$$. Calculate what fuel alone will cost you, what you want to earn outa it, wear and tear. I don't think I'd do it for that.

 

The cost to you will be at least $.20 a mile for vehicle cost. Depending on fuel milage and your truck payment. Keep that in mind.

 

Sorry..$600/week is minimum for this particular route to the coast...TAKE HOME by the way...

 

I wouldn't consider that kind of money lucrative, but it probably depends on where you're coming from. I'd never survive on $600/week takehome.

My last business trip paperwork is at the office, but I thought the going mileage rate is approx .33/mile.

No bennies other than sitting in the truck 5-7 hours a day?

I'd keep my day job.

 

Just a thought. The business mileage allowance for the IRS is $.36 per mile. Based on your figures, you would be spending $630 per week on the truck and your personal labor would be free.

Just my $.02
Wayne

 

Sure you would be able to write off most if not all your earnings on schedule C on your tax return and pay no taxes on that income BUT your CTD will be both literallly and figuratively massively depreciated. I just looked it up., they (IRS) is allowing 37.5 cents per mile deduction for the 2004 tax year. They are only paying you .34 cents per mile. That is way too low a payment . As a guess you should get 2 to 3 times that, but that is just a guess.

 

If your not making $1.00 a mile forget it. I get 40.5 cents a mile plus load & unload fee driving for an oil co. & I don't own a bolt in the truck.
If your going to put wear & tear on your truck & pay your own fuel & maintence, you would be working for peanuts.

 

I am self employed and use my truck as my office so I can tell you about some of the tax burdens. First you will have to pay the Self Employment Tax which means you get to pay 100% of your Social Security or about 15% of your gross. You will have to pay your taxes quarterly not each April. If the GVWR is over 6000 pounds you may be able to deduct an amount equal to the depreciated value of your truck the first year. The IRS allows you 37.5 cents per mile for vehicle expenses and that includes your fuel, oil changes, and vehicle repairs. I was told the IRS considers vehicle repairs as part of your normal expenses or wear and tear on your vehicle. Any meals, motel bills, and other business expenses are deductable. Your best bet is to visit with a CPA to find out exactly what your tax burden will be.

One up side to this - my CPA told me I should buy a new truck over 6000 pounds GVWR for a tax deduction. Buying the truck will reduce my taxable income by an amount equal to the cost of the truck. I am waiting for my company to tell me they have enough work to keep me busy and then I am going to get rid of my little Ford Ranger and move up to a real truck. I am looking for a Dodge, Quad Cab, Cummins, auto trans. I have been reading everyone's talk about the new trucks and I am ready to buy but I am distrubed about all the talk of poor gas mileage. By the time I am ready to buy there probably won't be any early 04s left.

 

cummz
from what i have read the folks delivering rv's with their own truck get $1.00 per mile so your does not sound to good.i would talk to a tax man.

 

Don't kid yourself, some may be getting that for delivering RV's but most are getting a lot lower. Some as low as 65 cents a mile. And that is one way. You have a choice with IRS, you can either deduct the parts, repairs, fuel, and other maintenance or claim the cents per mile, not both. The truck can be depreciated over three years. Technically the only parts or repairs that cannot be claimed is something that specifically extends the life of the truck, but that is never a problem. Claim all bills and expenses. You can also claim another vehicle as a parts or backup vehicle and depreciate it.

This is not personal expenses or claims, you file the business on a Schedule C and all that goes on the personal filing is the total from the bottom of the Schedule C. Your toys and anything you need for the truck or yourself is deductable on the C. You can use a laptop and claim it, etc. You can deduct food or a percentage of it if you are out overnight, not local.

He will not be running heavy so fuel mileage will be great and no real wind resistance. The mileage is ok if it is all miles out. You won't set the world on fire with $600 but it will pay the bills and give you some income. Be hard to support the family on it. The insurance is a big increase, mine is over $500 a month which is $125 a week to get specific.

You need to start an acount for repairs and faithfully put the money in it. Dump it on toys in November or tires or whatever.

Self employment tax and income taxes are paid on the personal filing figures not on the Schedule C, all that is before taxes or income. If you show $1000 on the Schedule C at the bottom total, that is what you pay tax on.