When you are a truck driver in New York, one of the biggest concerns you may have is how you and your business are taxed. You will not be surprised in April when you file taxes when you have this understanding. You are not alone; there are close to 3.5 million truck drivers in the U.S. Before you get to the point at which you are filing your taxes, you should review this information to ensure you have a complete understanding.
Typical Tax Deductions
When you are a truck driver in New York, there are some deductions that you may be able to claim on your tax return. Deductions are items that you paid for as a part of your job, and you can deduct the cost from the taxes you owe. These items include insurance premiums, interest for business loans, permits, licenses, communication equipment, and accounting services, just to name a few.
There was a new tax law in 2018 that allows small businesses with an annual gross receipt of under $25 million in a period of three years can use the cash method of accounting. Cash accounting is a method of accounting where receipts are recorded when they are received. Also, expenses are recorded in the period when they are actually paid. This cash accounting also applies to truck drivers living in New York.
Anyone that believes they are going to owe more than $1,000 once credits and withholdings are subtracted is required to make payments for incomes taxes and self-employment. This applies to anyone living in any state, including New York. The IRS permits estimates based on data from the previous year. You can use an application to estimate the payments.
Fuel Use Tax
In the U.S., there are more than 500,000 trucking companies. There are more than 15 million trucks on the road, with 2,000,000 of them being tractor-trailers. For those truck drivers in the state of New York has a fuel use tax for carriers that drive motor vehicles on the public highways of New York State. This fuel tax guarantees that fuel that is purchased outside of New York and then used to operate a motor vehicle on the highways of New York gets the same tax as that purchased inside the state of New York. If you drive your vehicle only in New York and buy all your fuel in New York, you are not subjected to the fuel use tax. You are already paying taxes at the gas pump.
Alcoholic Beverage Tax
If you move more than 90 liters of liquor with the state of New York, you must keep a record of what you transport. In addition, when you are driving the liquor, you must have some other items with you while you drive. These items include a completed Manifest Form for Liquor or the same manifest form in a different type of document. The document must be completed before driving the liquor.
Cigarettes and Tobacco
When they drive tobacco or cigarette products, truck drivers in New York must also keep accurate records, including invoices and delivery information. They must be available for review when it is requested. In New York, these items can only be transported to a licensed or registered agent, wholesaler, or retailer. It can also be delivered to an agent of the federal government or the New York State government.
If you have a basic understanding of this tax information, it can help you when you file your taxes each year. In addition, this information can help you determine if you need to pay an estimated tax payment. Remember, just in Kentucky alone, there are over 335,000 businesses. That means there must be many resources out there to help you learn about taxes for your business!