As a special addition to Dennis Bridges’ brand new monthly column, he has also created “Hotshots!”, a collection of several short features of hopefully high value. These are from a combination of questions that he has received and/or issues that are affecting a wide number of transportation, logistics and supply chain professionals.
So welcome to the first installment of…
1) So in the U.S., we’re at the dawn of “tax time”. And taxpayers’ thoughts are turning towards the government agency that we all love to hate, the IRS.
Already we are getting calls and emails from drivers as well as million-dollar companies repeating a familiar question, “My records are in a mess—what can I do?!”
We actually touched on this question last time. Fortunately, relief is available for a business whose records are less than complete.
We here at eTruckerTax received a baptism by fire several years ago. As a result of the devastation of Hurricane Katrina upon the U.S. Gulf Coast, especially Louisiana and Mississippi, hundreds of businesses including owner-operators and trucking companies had records that were literally swept away by flood waters.
We took it upon ourselves to master the combined art and science of records reconstruction. Long story short, records reconstruction became a specialty of sorts for our office, especially in the areas of transportation and logistics.
So if you are waking up to a situation where your records are missing, incomplete, in poor shape or altogether a hot mess, you can breathe easier…help is available.
2) Speaking at trucking events or at trade shows gives me a unique opportunity to find out what is on peoples minds on a grassroots level.
One of the questions we are asked most frequently by all business owners is “What are my chances of being audited?”
What would you think are the odds of your individual income tax returns being audited by the IRS?
Got your answer? No peeking. Write it down or tell someone. I’ll tell you the answer in just a minute. When I’m speaking at a trucking or logistics event, I get that question fairly often as I said above, and I turn it around on the audience just like I’m doing right here.
Typically, audience answers range from maybe 4% of returns getting audited to more than 10%.
On average, throughout the U.S., the IRS audits just 1% of all individual returns filed. That’s one out of a hundred!
What’s even more interesting is that for most income ranges, even up to about $10 million, the likelihood of an audit is cut by half simply by being incorporated.
That’s right. Simply by converting your business from a sole proprietorship or even a single-owner LLC, you can cut your audit chances by HALF!
And we have business clients set up a corporation with this as their sole reason. Never mind all the tax and legal benefits and advantages.
3) Do you or your U.S. business owe sizeable prior-year balances to the IRS? Or do you have two or more prior returns that you need to file? Even the IRS themselves are saying that this may be the best time in the past ten years to deal with those issues.
The IRS has not declared an official amnesty arrangement. However, they have said that now that the U.S. economy is in recovery, they are “taking off the gloves” and pursuing back-tax situations much more vigorously.
I guess this means “no more Mr. Nice Guy!”
4) Many thanks to the many of you that have reached out to us from literally all over the world! We would still love to field your questions, get your comments of topics you’d like to see, and receive your recommendations of experts from around the world that should be considered for our advising panel.
Until next time when we dig into a far-reaching topic, this is Dennis Bridges with “HotShots!”
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Dennis Bridges is a CPA and recognized leader in tax and financial issues for logistics professionals and logistics-based enterprises. He is the author of The Truckers Tax Relief Toolkit, and co-author of Amazon best-seller, Breaking the Tax Code, 2nd Ed.
In honor of the sacrificial work effort expended by drivers and other logistics professionals, he has created the “Truckers Million Dollars Tax Cut”, a nationwide initiative to save over $1 million in income taxes for at least 2,014 truck drivers and others. He welcomes inquiries from individual drivers and others for tax preparation.
Dennis strives to bring the maximum value to every client relationship, whether income is measured in six figures or nine figures. He is best known for reaching innovative solutions to tax and business problems.
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