Owner Operators - Tax Tips

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Problem: The 1099 you received shows the wrong amount of income.

Solution: Request a corrected copy of the 1099. If you are unable to get a corrected copy of the 1099 you should report the incorrect 1099 information as it appears on the form, then add or subtract the amount of the error when computing your total. Be sure to include a letter of explanation with your return.

Problem: Your tax return is not done yet.

Solution: If you haven't filed your tax return yet and you just don't have time to get things together, get help now. Get help from a tax professional, preferably one who specializes in trucking. It doesn't matter if you're a company driver, independent contactor, or owner-operator, you will benefit from having your taxes prepared by a tax preparer that specializes in trucking.

Most tax firms offer free tax organizers to help you gather the proper information needed for income tax preparation. If you would like a free 2007 Income Tax Organizer (trucking specific), you can call our office and request one or download one from our website at www.pbstax.com. A tax organizer helps to simplify the information gathering process and helps prevent the omission of important deductions.

Problem: You have not filed a tax return in several years.

Solution: The IRS wants you back in the system. They are willing to work with non-fliers to get them caught up. The sooner you get caught up the better. Contact a tax preparer and discuss your situation. They will be able to guide you through the filing of your back taxes. You can download income tax organizers going back to year 2000 on our website at www.pbstax.com or call our office to have the organizers mailed. We also have tax organizers available for tax years prior to 2000 by request.

Problem: You owe the IRS money with your 2007 tax return and you can't afford to pay.

Solution: If you owe the IRS, there are options for handling payment of your liability.

• You can file the return and wait for the IRS to send you a bill with interest and penalty.
• You can file Form 9465 Installment Agreement which is generally accepted if the amount you owe is under $25,000 and you have no prior year tax liability.
• You can request a monthly installment plan from the IRS or contact your tax preparer if the amount you owe is more than $25,000 or if you owe for prior tax years in addition to the current year.

You can apply online for payment arrangements of the tax you owe. Go to www.irs.gov and use the pull down menu under "I need to...." to select "Set-up a Payment Plan."

Problem: You just received an audit notice in the mail.

Solution: If you receive an audit notice contact your tax preparer as soon as possible, so that he/she can either:

• Help you prepare for the audit
• Act as your representative and handle the audit instead of you.

It is never wise to handle an audit yourself. It is always advisable to have professional representation.

The more organized your receipts and the more substantiation you are able to produce, the faster and easier it is for the IRS to determine that you and your tax preparer filed a proper tax return.

The best way to avoid an audit is to file a complete, accurate tax return with the help of an experienced tax preparer. Your tax preparer can make you aware of any potential audit risk and make sure you have all the proper documentation in order before you file your tax return.

Economic Stimulus Package
Legislation passed approving tax rebates for millions of qualified Americans. To receive the rebate you must file a 2007 tax return. The tax rebate provides up to $600 for individuals and $1,200 for couples. Families meeting the income requirements could receive an additional $300 per child under age 17. The tax rebates are part of the government plan to stimulate the economy through a boost in spending. If you normally would not be required to file a 2007 tax return you should file one anyway. By filing, you establish your eligibility to receive the tax rebate. If you file your tax return by April 15, you can anticipate receiving your rebate check as early as May or June. Taxpayers who file after April 15 can expect a delay in receiving their rebate checks.

Everyone's financial situation is different. This article does not give and is not intended to give specific accounting and/or tax advice. Please consult with your own tax or accounting professional.

This article has been presented by PBS Tax & Bookkeeping Service, a company that has been providing income tax and bookkeeping services to the trucking industry for over a quarter century. Contributions to this article were made by Shasta May, Director Business Development for PBS. If you would like further information, please contact us at 800-697-5153. See our website at www.pbstax.com.