Sacramento Accounting Services for Trucking Companies
Cook CPA Group
The trucking industry has proven to be incredibly profitable, especially in the Sacramento region of California. This reality is mostly due to the high demand for goods transportation. However, the more useful the trucking market becomes, the harder it is to compete in it. This is especially true for individuals who own a small or mid-size truck fleet. Managing and taking care of a trucking company’s finances can consume time better spent on other priorities – while creating lots of unnecessary stress. Without the support of a professional tax and accounting service for trucking companies, you will likely encounter more problems than solutions.
If you are facing financial difficulties with your trucking company, or simply want to overhaul your accounting systems for better efficiency, let our Sacramento accounting firm help. Call Cook CPA Group today for a free consultation at (916) 910-0323, or contact us online to get started.
What Does it Cost to Operate a Trucking Company?
There are specific expenses that trucking companies should take into account when planning a budget or creating a trucking business plan. These expenses and how they are managed can dictate the way a trucking company operates and develops – grows or fails. If you are starting a trucking business, or are thinking about overhauling your business plan, here are some major operational costs to keep in mind:
- Fuel: Fuel represents one of the highest costs for trucking companies. Whether you have a mid-sized or small truck fleet, fuel can skyrocket your operational costs. It becomes a more significant problem if you don’t keep a close look at the fuel pricing, management, and routings. One of the best ways to keep your fueling costs in check is prioritizing your delivery and transportation routes as these will impact the rate at which a truck consumes fuel. You also need to keep fuel taxes in mind. California recently increased fuel taxes under the Road Repair and Accountability Act of 2017.
- Maintenance: Ideally, you’d want your operation to run smoothly year-round. However, this is not always the case. When least expected, trucks can break down. Things like faulty brakes, worn-out tires, and engine problems can add up to hefty operational expenses. Budgeting for these scenarios can better prepare your business financially for when the unexpected happens.
- Insurance: Insurance coverage is a vital element of any trucking company. Your need for different types of insurance, like “bobtail” insurance and general liability insurance, will also determine your operational costs.
- Payroll: Besides the discussed operational costs, paying your drivers is another crucial part of your business. However, payroll compliance is more complex than simply issuing payments. For example, you will need to determine whether workers should be classified as employees or independent contractors. Then, you will need to collect, remit, and match various employment taxes accordingly.
- Other Costs: There are more costs associated with running a trucking company. Factors like food, lodging for truck drivers (when necessary), and tolling, among others, can significantly increase a truck company’s expenses.
Tax Preparation and Business Accounting for Trucking Companies
Trucking is a business. As such, they also have tax obligations with the Internal Revenue Service (IRS). Compliance is of utmost importance to avoid penalties and fines from the IRS. Filing an annual tax return can be confusing and challenging. We present some general information about tax filing for trucking companies.
The IRS sets forth specific rules for trucking companies. One of the very first things a trucking company owner should have is their Employer Identification Number (EIN). This number will allow you to file the appropriate tax form.
According to the IRS, Form 2290 (Heavy Highway Vehicle Use Tax Return) is generally a tax form required for “any taxable vehicle first used on a public highway after July 2017 by the last day of the month following the month of first use.” You use Form 2290 to calculate and “pay the tax due on highway motor vehicles [weighing 55,000 pounds or more] used” during the tax period. The deadline for filing Form 2290 depends on when the truck was used.
Filing your tax information with the IRS can be an overwhelming, time-consuming task to handle on your own. Therefore, it is always wise to consult with a knowledgeable Sacramento business tax preparer who can manage your finances while you focus on your business operation. Note that failure to file Form 2290 or other tax forms will result in hefty fines from the IRS. Likewise, failure to pay tax can result in fines, interest, and other penalties.
Sacramento Business Accountants for Truckers and Trucking Companies
Whether you run an extensive truck fleet or a small one, tax filing and financial planning will always be important. However, balancing your finances and making sure everything is in order can be an overwhelming task – especially while you are overseeing your day-to-day operations. Let our knowledgeable, experienced, and skilled accountants work for you. To learn more about our accounting services and how our team can help you with your trucking company’s finances, call Cook CPA Group at (916) 910-0323 today.