Florida Intrastate ELD Mandate

After the largest state in the United States of America, Florida queues up to adopt the intrastate Electronic Logging Device (ELD) mandate issued by the Federal Motor Carrier Safety Administration (FMCSA), in the year 2015. However, unlike the state of Texas, the deadline to update to the intrastate electronic logbook is December 31, 2019. This ELD mandate is no different from the Texas mandate and hence intrastate commercial motor vehicle (CMV) drivers are required to comply with the rule before January 1, 2020. Before we proceed, let us understand the difference between interstate and intrastate driving.

Interstate and Intrastate Driving

Interstate driving simply means driving from one state to another. Intrastate driving on the other hand is driving between two places within a single state. You could visit the official FMCSA website to determine if you are an interstate driver or an intrastate driver.

Drivers in Florida and Texas are expected to follow in-state hour rules that include bigger limits than the interstate rule. They are;

  • Longer period of time for on-duty status
  • A total drive time of 12 hours in a day
  • Lengthier cumulative limits per week

Interstate trading takes place only when you drive a commercial motor vehicle:

  • Between two states or outside the country
  • Between two cities or places within a state, but, the vehicle is driven out of the state or country for a short part of the trip
  • Within two cities or places of a state, but, the goods being transported or the passengers in the vehicle have begun or will be ending their trip in another state or country.

Intrastate trading is when you do not match with any of the aforementioned criteria.

The ELD mandate comes with rules and safety regulations. It also has exemptions and benefits in specific cases. Let us have a look at what they are;

Rules of the ELD Mandate

  • It is important that commercial motor vehicles have ELDs installed before December 31, 2019, in Florida.
  • It is a mandate to use the eld devices for log in of hours of service.
  • The ELD installed in the vehicle must be FMCSA certified and should match up with the FMCSA defined standard.
  • Drivers of the commercial motor vehicles have to carry supporting documents along with the ELD in case of any check by officials.

These documents may include;

  • A manual of how the ELD is to be used
  • A sheet of data transfer method supported by the ELD and step-by-step instructions to produce and transfer the driver’s records to enforcement
  • A sheet of instruction that declares the ELD malfunctioning reporting requirements and recorded procedures during the ELD malfunction
  • An 8 day record of blank hours of service graph-grid logs to be used in case of any ELD malfunction

Safety Regulations

There are a few safety regulations a driver must follow. Even if the truck comes under the ELD exemption rule, the driver is required to follow these safety regulations. An ELD will only ensure that these regulations are being followed by maintaining a record of the log time. These safety regulations are as follows;

  • A driver can drive his vehicle or be on the road for a maximum of 12 hours daily. This is inclusive of loading and unloading time.
  • After completing 12 hours on road, the driver must be off duty for 10 hours consecutively.
  • A driver cannot be on duty for more than 14 hours in a day. This includes both on duty and off duty driving time.
  • A truck driver must take a stop and rest for half an hour after every 7- 8 hours of driving.
  • A truck driver is only permitted 70 hours of work time in 8 days.
  • Overdriving, on the other hand will be considered as violation of the law.

ELD Exemptions

It is always a good idea to follow ELD rules of a given state. However, in some cases, it is not very possible to follow these rules. Therefore, there are some exemptions to the same. Enlisted below are a few exceptions of the ELD mandate;

  • Transportation of agricultural produce during harvest season within the 150 air-miles area, cannot keep up with majority of the rules in the mandate. Therefore, the transportation vehicle will be exempted from the ELD rules.
  • If the commercial motor vehicle is older than the year 2000, the ELD device will not accept the engine motor of that vehicle.
  • Towing trucks that deliver commercial motor vehicles are exempted do not have to be in line with the ELD rules.
  • Truck drivers that are usually not required to maintain record of duty status (RODS) for reasons like driving within the 150 air- mile area, etc. are not expected to install the ELD.
  • Truck drivers with record of duty status of less than 8 days due to short transportation may not install the ELD.

However, it is a must for every trucker to produce proof for a few FMCSA criteria which would ensure that his vehicle falls under the exemption in case he is stopped by an official during the trip.

Benefits of the ELD Mandate

  • The state will receive a boost in payroll efficiency because of their 12 hour drive time alternative along with a greater weekly cumulative limit.
  • Commercial motor vehicles transporting to Texas benefit from the ELD mandate as both the states already share the same intrastate hour rules and regulations.
  • The ELD mandate is bound to keep transport strikes at bay as every driver would get their deserving pay for their work.
  • ELDs are the easiest and most affordable solution in today’s day and age is likely to be adopted by other states in the country as well.

As both the states, Florida and Texas are in line with the ELD mandate; it is a compulsion that every commercial motor vehicle passing through either one of these states during a trip is required to have an ELD installed. It is also important that the trucker is in compliance with all the rules relevant to the ELD mandate in order to cross these states without violating any rules and regulations. Violation also results in an eld mandate fines wherever necessary.

For any assistance or additional information on ELD installation, you could visit us at Matrackinc.com

ELD Mandate For Texas

It is no secret that the Federal Motor Carrier Safety Administration (FMCSA) put a mandate on the usage of Electronic logging device (ELDs) in the year 2015. Ever since, the second largest state of the USA, Texas, is the first to adopt this mandate and imply the same for intrastate drivers. Texas has made the usage of electronic login devices (ELDs), a compulsion. The eld compliance date by December 19, 2019 and has also updated its Hours-of-Service code. By updating the hours of service code the state has made it obligatory for intrastate truckers to apply ELDs in their work.

For Compliance it is important that every commercial motor vehicle (CMV), transporting goods intrastate must keep themselves updated with this new rule.

ELD is a login device that records hours of service providing vehicle diagnostics and driver information. It has proved to be more efficient that other devices serving in the favour of the trucking business and therefore has been accepted by most after the FMCSA mandate. It is said that after Texas coming in line with the mandate, Florida is next to follow the mandate too.

The state’s new mandate is not very detailed with regulations and has scarce information to enlist. The regulations are more or less synonymous with the FMCSA’s ELD mandate and the different regulations of the final ELD rule. However, it is still not disclosed if the exemptions will be the same.

What are the ELD mandate rules? What are the exemptions? What category do you fall in? What are the current safety regulations? Let’s find out

Rules of the ELD Mandate

  • It is important that commercial motor vehicles are equipped with ELDs before December 19, 2019.
  • The ELD must be used to log in hours of service.
  • The ELD installed in the vehicle must be FMCSA certified and should match up with the FMCSA defined standard. Only then will the device be considered valid.
  • Drivers of the commercial motor vehicle have to carry supporting documents along with the ELD in case of any check.

The documents required may include;

  • A manual of how to use the ELD
  • A sheet of data transfer method supported by the ELD and step-by-step instructions to produce and transfer the driver’s records to enforcement
  • A sheet of instruction that declares the ELD malfunctioning reporting requirements and recorded procedures during ELD malfunctions
  • An 8 day supply of blank hours of service graph-grid logs to be used in case of any ELD malfunction

There were three parts to the FMCSA’s ELD implementation timeline. The state of Texas is in agreement with the third part. The ELD rule first came into existence in the year 2015. That is when this device replaced the register or pen and paper. Drivers were expected to switch to an automatic on board recording device (AOBRD) instead. By 2019, the third part, that is, the mandate will expect truck drivers to have ELDs installed for compliance, is what Texas has accepted.

Safety Regulations

There are several safety regulations a driver must follow. These regulations are important to follow irrespective of having to follow the ELD mandate or not. An ELD will only ensure that these regulations are being followed by maintaining a record of the log time. These safety regulations include;

  • A truck driver can drive his vehicle or be on the road for a maximum of 11 hours each day. This includes loading and unloading time as well.
  • After completing 11 hours on road, the driver must be off duty for 10 hours at a stretch.
  • A driver cannot be on duty for more than 14 hours in a day. This comprises of both on duty and off duty driving time.
  • A truck driver must take a stop and rest for half an hour every 8 hours while driving.
  • A truck driver is only allowed to work for 70 hours in 8 days.
  • Overdriving, on the other hand will be considered against the law.

ELD Exemptions

ELD rules must be followed wherever possible. However, in some cases, it is difficult to follow these rules. Although these exemptions are subject to change any time, here are a few exceptions of the ELD news mandate.

  • If agricultural produce is being transported during harvest period within the 150 air-miles area, the transportation vehicle will be exempted from the ELD rules.
  • If the commercial motor vehicle is older than the year 2000, the ELD device will not accept the engine motor of that vehicle.
  • Towing trucks that deliver commercial motor vehicles are exempted from the ELD rules.
  • Truck drivers that are usually not required to maintain record of duty status (RODS) for reasons like driving within the 150 air- mile area, etc. are not expected to install the ELD.
  • There’s an ELD short-haul exemption for truck drivers with record of duty status of less than 8 days. Due to short transportation they are not expected to install the ELD.

However, every trucker must be able to produce proof for a few FMCSA criteria which would confirm that his vehicle falls under the exemption in case he is stopped by an official during transportation.

ELDs have been a big success in recent years and hence are being willingly accepted by most businessmen and owners of the trucking companies.

Like Texas, many other states are likely to comply with the ELD mandate soon. Most states are already in line with the rules of the FMCSA. However, Texas is just the first state to announce their acceptation of the ELD mandate. Several states in the United States of America follow the FMSCA rules by default and hence would be in line with the new ELD mandate as well.

It is important to keep yourself updated with the rules and regulations of the ELD mandate. Check if your fleet needs an ELD installation or if it falls under the exemption points. Get the ELD installed the soonest you can if your fleet caters to intrastate driving in Texas.

Find the best eld devices for owner operator with Matrack. For any assistance or additional information on ELDs installation, you could visit us at Matrackinc

Advantages Of Tax Deduction For Owners

 

The good news is, maybe you are ignorant to the advantage of tax deductions as an owner operator of the trucking business and hence you are paying way more than what you are supposed to be paying as taxes.

Ever felt like your business is at a partial loss with the monster tax bill you received at the end of the year or quarter year? Did it feel like the government is eating into your profits? Did it urge you to think of wicked ways out of paying heavy taxes? Did the tax paying system seem downright unfair? If yes, then probably you aren’t much updated with the benefits of tax deductions in the trucking business.

As an owner operator of the trucking business, your tax procedures and rules are different from that of a normal employee. While employees have their taxes directly deducted from their paycheques, you need to file for your own taxes which include a lot of decision making, based on the current available tax rules and regulations. This may get a little challenging and tedious at the same time.

There are a lot of points to consider before filing for taxes, whether quarterly or yearly, and tax deductions are definitely one of them. So what exactly are these tax deductions? What is the list of factors that come under the term “Tax Deductions” for an owner operator of the trucking business? What is deductible and non-deductible tax?

Deductible Tax

Absolutely everything that comes under business expenses can be deducted while filing for taxes. Here is a detailed list of what you should consider for tax deductions while filing for taxes.

Tax on Depreciating Property

Equipment used for your trucking business that has a depreciating value can be deducted from the taxes you pay. These include property, trucks, trailers, office machinery, etc.

Business Loans, Mortgages and Interest

If you have mortgaged or taken a loan for the business, then you can deduct interest you pay on the loan or mortgaged property from your tax every year.

Medical Expenses

Business related expenses for DOT physical test, drug testing, sleep apnea test, etc. are deductible expenses.

Dependent Deduction

Child and parent support expenses can be deducted. The parent can be an in law or grandparent as well.

Dispatch Fees

Fees paid for a dispatch service is deductible.

Truck Supplies and Accessories

Supplies such as fire extinguishers, chains, atlas, ice scraper, etc. can be used as business related expense and hence is tax deductible.

Start-Up Cost and Investment

Setting up a business requires money in the form of investment which can be considered tax deductible.

Office Expenses

Office supplies like stationary, calculator, furnishing, etc. can be included in this list as well.

Safety Gear

Expenditure on safety gear like metal toe shoes, gloves, helmets etc. are to be claimed.

Uniform and Laundry

Uniform cost and laundry cost on the go is deductible when away for an overnight trip.

Guard Dog

You can deduct your dog expenses while filing for taxes as well, provided the dog is always on the truck as a guard dog while on the go. These expenses include dog food, veterinary bills, etc.

Office at Home

You are eligible for this deduction if you have opened your office in your house itself. You need to use the home office on a regular basis. The home office should be your main place of business. It should be used exclusively for business purpose.

Insurance Premium Costs

Both company as well as personal insurance plan premiums can be added to tax deduction. This stands as a big plus as insurances help you reap benefits later on in life while paying their premiums give you instant benefits on tax.

Retirement Plans

Any retirement plan that you sign up for can be filed for tax deduction. Retirement plans taken for your spouse include too.

License and Permits

Absolutely any fee paid for business purpose can be deducted from tax payment. 50 percent of self-employment tax is supposed to be deducted while filing for taxes, as well.

Travel Allowance and Fuel

The amount you spend while traveling away from your tax base is deductible. These expenses include toll, parking, fuel, registration fees, lodging, etc. You can also add cleaning equipment and material like detergent, etc. for tax deduction.

Truck Lease

Except for the down payment of the vehicle, all lease payment can be filed for tax deductions.

Communication Equipment and Bills

Use of phone for business purpose can be attached to your tax deduction file. The monthly phone bills can be claimed as well. Internet bill and cell phone data plans can also be part of the claim. However, only 50 percent of access fees are permitted for deduction by the IRS.

Repair and Maintenance

Truck or machinery breakdown expenses are deductible. Service and maintenance of the truck or machines at your work place can also be claimed for tax deduction.

Credit Card and ATM Fees

Only the fees for withdrawal of money for business purpose can be claimed for tax deductions.

Gym Membership

A gym membership can be used as a deductible expense only if it is recommended by a doctor in order to treat a medical condition. The membership must be taken only after the diagnosis and issued prescription.

Per Diem Costs

Per Diem expenses are assumed expenses by the IRS. These expenses include food, beverages, travel tips, laundry while on the go, lodging in case of an overnight business related trip, etc. The IRS gives a $60 to $70 allowance per day for which receipts or a log need not be maintained. Owner operators of the trucking business reap the same benefits through the Schedule C form and enjoy deductions on self-employment tax as well as income tax in the bargain. However, the IRS only allows for an 80 percent deduction on these expenses.

To put it in short, absolutely anything from a pencil to a new vehicle can be claimed for tax deductions as long as it is purchased for business purpose. These expenses can be as ordinary but equally necessary to run the business.

Non Deductible Expenses

As the aforementioned are things you can claim for tax deductions, there are also a few things you cannot. Tax deductions come with a set of rules to be followed and a criterion to fit in, in order to be eligible for the deductions. Let us take a look at what cannot be deducted as an owner operator of the trucking business.

Non-Productive Machine Time

If a machine is not in use or is inactive after work hours during which time and productivity is lost, the lost time cannot be claimed for tax deductions.

Fines

Rule breaking fines cannot be deducted. For example if you are fined for over speeding or breaking a signal, you cannot claim it as a deduction.

Less Than 50 percent for Dependent Cost

If you don’t pay for more than 50 percent of a parent support cost, you cannot claim that expense for deduction.

Your Own Clothing (Street Clothing)

Only uniform and safety clothing used for business purpose is deductible. Street clothing does not come under this category and therefore cannot be claimed.

Time Lost in Maintenance and Repair

The time an owner operator loses while repairing his truck in case of a breakdown, cannot be filed for tax deductions.

Deadhead Trips

Income lost due to empty return trips is not deductible.

Importance of a Tax Home

The travel expense claim demands that you travel away from home. It is therefore extremely important to have a tax home in order to determine whether you are traveling away from it or not. The IRS considers your city or surrounding as your tax home. This place could also be the place of dispatch or the place where you are handed assignments and not necessarily be the home of the self-employed driver.

The tax home refers to your city and area in general. It does not mean one specific place. However, if you do not have a place of work, then your residing house could be used as your tax home. In this case, you need to show that you help maintain your place of residence in some manner or the other when you are away from home, in order to have it as your tax home. In case you cannot show the maintenance, you cannot have that as your tax home.

A tax home could also be used as the places at which the travel begun and ended. For this you need to maintain a log book and save receipts to show expenses during the travel.

Maintaining Good Records

One cannot stress harder on the importance of maintaining good records when it comes to filing for taxes, whether yearly or quarterly. As tax deductions are the most ultimate way of reducing tax burdens for a self-employed truck driver, it is all the more important to have records and receipts of your expenses to reap the benefits of tax deduction. Here are a few tips you could follow in order to maintain strong records;

  • Maintain a file, either trip wise or month wise.
  • Use a hard drive or log book to store information. Google drive could be used as a secure option as well.
  • Organize your receipts each week instead of leaving all for the last minute.
  • Use an app for record storage. Applications are handy and very easy to use.

Rules for Owner Operators who Subcontract

An owner operator with more than one truck is likely to hire another driver. This is simply known as subcontracting the services. Every subcontractor you hire should be issued a Form 1099-MISC for payments that amount to $600 or more for that accounting year. The form requires the sub contractor’s name, address, tax ID, and payment amount.

The next step of the owner operator should be filing the IRS Form 1096 with a compilation of all 1099-MISC payments. The IRS Form 1096 should be submitted before the end of January every year to avoid unnecessary fines and penalties.

The Tax Cuts and Jobs Act of 2017 Law

The Tax Cuts and Jobs Act was a law formed in the year 2017 that actually raised concerns regarding the same. However, as per the law, owner operators of the trucking business could still claim their everyday per diem. The law also allows a 20 percent claim on pass through entities which benefit a lot of owner operators especially when it comes to double taxation.

Sole proprietorship, limited liability corporations (LLC), S corporations and partnerships come under pass through entities and it is necessary for the owner operators of such firms to ensure maximum tax benefit and savings while paying their taxes. The new law claims a minimum saving of $2000 for the owner operator of the trucking business. The law aims at guarantying more savings for more earnings.

Under this law, if the driver of the truck is not an individual contractor, he cannot claim his daily per Diem as an employee. The law also plans on removing the health insurance mandate on owner operators in near future.

Fluctuating Tax Rules

Tax rules and regulations are ever changing and hence are likely to fluctuate every year. It is very important for an owner operator of the trucking business to keep himself updated with the changing rules and file for taxes accordingly. Talk to your tax advisor in case of any tax related confusions. Tax advisors prove to be very helpful in eliminating unnecessary errors and gaining attention towards overlooked laws while filing for taxes.

Please not that filing for unnecessary and invalid deductions will lead to IRS audits and inquires. Keep yourself updated with the latest change in tax deduction rules before claiming deductions or ask your tax advisor for help.

Please refer to Everything Owners Need To Know About Tax Deductions, Blog for a better understanding on tax deductions.

Everything Owners Need To Know About Tax Deductions

Remember the time as school kids that we wasted in leisure and play and bit our nails off just one day before our tests hoping we had only prepared a little earlier? Those curses and self-deteriorating comments we passed at ourselves back then for being the procrastinator and knowing we would be much better students had we been more organized, is a synonymous feeling we face while filling for taxes as grownups.

Filing for taxes are definitely not a very fun thing to do as it eats up a whole lot of time and demands a lot of concentration and attention in order to get everything right.

If taxes are the least of your concern, then you probably are on the employee end, having them pre calculated and deducted directly from your monthly paycheque. However, this is unfortunately not the case with the owners of a business and this factor applies to owner operators of the trucking business as well. Hence it is extremely important to study this challenging procedure in detail.

In the trucking business, an owner operator is solely responsible for paying off taxes relevant to his firm, by himself. The owner needs to calculate taxes and see that they are paid to the state and federal agencies before their due date, in order to avoid penalties and fines for the same.

An owner operator is required to pay his taxes quarterly or yearly, quarterly being the more convenient manner. These taxes are supposed to be about 20 to 30 percent of the net income of that quarter or year. If these payments are done at regular intervals, the owner will save himself of a fine at the time of year ending (generally during the month of April). It is important to pay taxes, quarterly, if you owe at least $1,000 in taxes after subtracting withholding and credits. Owners also hold the advantage of tax deductions while running a business. Let us take a look at what tax deductions actually are.

Owner Operator Tax Deductions

As an owner operator of the trucking industry, you have ample of tax deduction benefits. These deduction benefits can be used to keep the money rolling and the cash flow on a constant up rise. These deductions include absolutely everything that comes under your company expenses. Owners are often oblivious to this fact. Most owners do not fully know the factors that come under this rule and the list of things that can be claimed under tax deductions for their company. The tax deduction rule has a lot of benefits when filing for tax returns and it is therefore a vital piece of information relevant to tax filing.

As the tax deduction rule includes all company expenses, it is extremely important that you save or keep a record of all the company expense receipts of the accounting year or quarter year, depending on the tax term you choose. Maintaining a file of these receipts could prove to be handy.

Before we get into the nitty gritty of tax deductions, it is important to first understand the need to pay your taxes on time and take a look at what owner operator tax payments include.

Why is it important to pay your taxes time to time?

This saves money and unnecessary trouble. The government charges a 3 percent interest rate on the tax for late payments. Hence if you don’t pay your taxes on time, it would only be a burden of extra money to pay and additional paperwork to cope with. It would also be considered as a legal offense if you don’t pay your taxes at all, thus taking away a lump sum amount from you at the time of the yearly audit.

Types of Taxes

There are two types of taxes that are applicable to the owner operator of the trucking business. They are:

Self-Employment Tax: Medical taxes and social security taxes rhyme with self-employment taxes. This tax is actually a combination of medical tax (2.9 percent) and social security tax (12.4 percent). Therefore, the self-employment tax amounts to 15.3 percent.

Federal Income Tax and State Income Tax: As an employee’s income tax is deducted from his paycheque, an owner operator on the other hand needs to take responsibility of estimating and paying this tax. The federal income tax and state income tax is generally calculated on the basis of tax return.

Types of Tax Forms

There are two types of tax forms; W2 and 1099. Often, W2 is a tax form issued to company employees. This is an indication that your taxes have already been deducted from your paycheque.

On the other hand, a self-employed individual who is also classified as the owner operator would have to fill in the 1099 form. This is because he would be responsible for filing for his own taxes and paying them off himself.

Schedule C

Schedule C is a form that reports the net income of the firm relevant to the 1099 form. This comprises of all other incomes as well that are incurred through truck driving by the firm.

Tax Facts and Guidelines

  • The IRS permits tax payments on the basis of your previous year records and data.
  • Every state has its own income tax website that should be referred to while paying taxes. Payment vouchers and addresses can be obtained from the state website itself. You could also find payment vouchers and addresses on the IRS.gov. website.
  • You can pay your federal income tax and state income taxes online. For federal income taxes you could visit – eftps.gov. website, whereas for state income tax you could visit your state’s department of revenue website and follow guidelines on the site for the payment.
  • To make the federal income tax and state income tax payment together, you could visit www.officialpayments.com. The website however charges an extra 2 percent of your payment as service fee.
  • It is absolutely fine to pay your taxes on a yearly basis. However, that is more time and energy consuming. Yearly tax paying simply accounts for more paperwork and more data to fetch from. This can add to confusion and hence the quarterly method of paying taxes is proven to be simpler and faster.
  • Set aside money from each pay cheque to avoid unnecessary hassles like money shortage at the time of tax payment.
  • One of the most important factors while filing for tax is record keeping. Keep a proper record of your data, tax documents, paperwork and other necessary documentation at the time of filing for taxes. Maintain a file of documentation for a smoother procedure.

You never want to annoy an IRS official

While most owner operators in the trucking business are used to filing for taxes on their own each year their experience tends to get them a little overconfident about never goofing up. However, with the “almost there” and “just managing somehow” attitude, there is a thick chance that you might just miss out on an important chunk while filing for taxes. No, you are not to blame. It is actually the ever changing tax rules that get you all confused and worked up last minute.

Tax is an elaborate topic with many aspects and loop holes that are invented and scraped every now and then. It is no wonder that owner operators are bound to miss out on a few of the constantly changing rules. Nevertheless, it is no use playing the blame game last minute as it would eventually land you in trouble. It is therefore very important to have yourself updated with the latest change in rules before you file for taxes, be it quarterly or yearly. Maintain a file of documentation would also smooth out regular audits thus avoiding clashes and confusion of any sort.

Understand that the tax deduction procedure is way different than that of an employee’s. This is extremely crucial if you are new to the business as this is one of the most common reasons of error while filing for tax. Here are a few questions that may help clear out some of the confusion.

Commonly Asked Tax Related Questions

Owner operators of the trucking industry are often confused with a lot of aspects related to tax payment. As there is information readily available on their websites, there are still a few questions that may not have clear answers. Given below are a few questions that are commonly asked while paying taxes.

Q. If I have a contract labourer, what are the forms that I would need to fill? (This person could be a team driver per say)

A. in this case you would need to run an employee through the payroll and hand them a W2 form at the end of the year. On the other hand, if you have a contractor labourer, you would have to hand them a 1099- MISC.

Q. What if I have not paid my quarterly taxes this year?

A. If you have crossed the due date then you will be charged a 3 percent fine on the tax amount by the IRS.

Q. Is it necessary to file different tax returns for company driver earnings and owner operator earnings?

A. You don’t have to. If you are the only proprietor in the company then you will need to fill in the 1040 form. This form comprises of a Schedule C that entails all your business expenses and earnings.

Questions Related to Family and Taxes

Q. Is it ok to claim a parent as a dependent on your taxes?

A. There is a provision for this factor by the IRS. However, you need to meet more than half of your parent’s support cost to fit in this criterion. This means, if you cover 51 percent or more of the parent’s support cost, only then you are eligible to file the claim for your parent as a dependent. This person need not only be your parent, he can be a grandparent on in-law as well. The costs you need to cover include food, clothing, shelter, medical services, equipment expenses, etc.

Q. Do spouses need to file their tax returns separately?

A. Now that is a choice you can make. You have two forms to choose from; marriage filing jointly and marriage filing separately. You need to see which one reaps more benefits for you and file for tax payment accordingly.

Q. How much of my or my spouse’s social security income falls under tax payment or is taxable?

A. The social security income tax depends on your marital status as well as your total income. For federal income tax return, your income should be between $25,000 and $34,000 respectively. In this case, your income tax would amount to about 50 percent of your benefits.

In case your income is above $ 34,000, about 85 percent of your benefits fall under the tax payment rule. In case you are married and file in for joint returns, you and your spouse together need to have an income between $32,000 and $44,000.  If it is so, your taxes would amount to about 50 percent of your benefits.

Q. Can a dependent be claimed on quarterly estimated taxes?

A. No. Dependents should only be claimed on yearly tax returns.

Paying taxes is not the sole responsibility of an owner operator of the trucking industry. It is important that he also checks for tax deductions and uses that rule for optimum tax benefits as well. Tax deductions reduce the burden of heavy taxes and also unnecessary taxes that owners often pay due to lack of information. There are also many available deductions that are often overlooked by owners that lead to extra tax payments. An owner operator should be well updated with the tax deduction advantages while filing for taxes so that he can fully avail its benefits and avoid extra loss of money.

Owner operators of the trucking industry have an array of deduction benefits on tax payment. However, there are many aspects such as subcontracting rules, rules for partnerships in business, etc. that need to be taken a close look at before filing for tax deductions.

As part of the trucking industry, you could learn gps and fleet management better with a Matrack gps truck tracking device. Please refer to the Advantages of Tax deduction for owners, blog for detailed information on the same.

Truck Driver Accident Procedures Part- II

As discussed earlier, there are quite a few things that a truck driver needs to take care of in the case of an accident. The seriousness of truck accidents can leave us with harsh consequences to face. Unfortunately, accidents are not something one can rule out completely. However, they can always be avoided if proper preventive measures are taken. Despite that, in case of an accident, there are a few rules and procedures that are mandatory to be followed.  These rules are generally set by the Department of Transportation or the Federal Motor Carrier Safety Administration. 

It is indeed important to adhere to these procedures in order to avoid unnecessary complications and heavy penalties during an audit. We have discussed earlier about the immediate steps a truck driver should take following an accident. After having a look at the aftermath of a crash involving a truck or a trailer, let us now see what qualifies for an accident according to the FMCSA (Federal Motor Carrier Safety Administration).

What is an accident for the FMSCA?

There is certain criterion the FMCSA follows when it comes to qualifying for an accident. The accident has to be a Department of Transport (DOT) qualifying accident. If the collision meets any of the DOT rules, the FMCSA will consider it as a qualified accident. That is;

  • If a vehicle involved in the collision requires to be towing to be taken away from the scene
  • A public road accident- means the accident has taken place on a public road
  • If there are any human fatalities
  • Any injury caused to an individual that demands medical attention away from the accident site

Meeting any of the aforementioned points, qualifies for a DOT approved accident. In this case, the FMCSA would require the accident to be registered and the record of the accident to be maintained for a minimum of three years.

Drug and Alcohol Testing

After an accident, the first legal follow up should be a drug and alcohol test. These tests generally determine which party involved in the crash was at fault, provided the results are positive. Employers generally feel the need to test their employed driver for alcohol consumption and drugs in case of an accident. Unless the employer has an individual policy of alcohol and drug testing which is in accordance with the regulations in their state regarding non-federal testing, they are not allowed to perform any such tests. However, in case of the following situations, an alcohol and drug test may be conducted.

  • Any injury caused to an individual that demands medical attention away from the accident site and the driver receives a citation for moving violation
  • If the accident has caused one or more human fatalities
  • If towing any vehicle involved in the accident is required and the driver receives a citation for moving violation
  • If the accident has taken place on a public road
  • If it is obvious that the driver was at fault for the accident

After an accident, within how much time must a driver have the drug and alcohol tests completed?

The FMCSA has a time stipulation during which the drug and alcohol tests need to be completed. The driver is required to be available irrespective of it being his fault or not in the accident, until the tests are performed.

DOT Breath Alcohol Test

This test is required to be completed within 2 hours of the accident. It often happens that being engaged at the site of the accident, the driver is unable to take the alcohol breath test within the 2 hour time frame. In this case he needs to document why he was unable to take the test within the time frame and continue to document the same every 2 hours after the accident till 8 hours have passed and he is still unable to complete the test procedure.

DOT Drug Test

It is important that the DOT drug test needs to be taken within 32 hours of the accident. Documentation is required if the test cannot be taken for any reason within the 32 hour time frame.

Tests Conducted at the Accident Site

In some cases, the on-site officer carries the breath analyser for alcohol testing. However, any on-site test result will not be released to the employer owing to the HIPPA laws.

The FMCSA on the other hand has certain requirements to be considered during the procedure of drug and alcohol test. The aftermath of an accident may suggest that the driver gets a blood test done. However, the FMCSA will only recognise and draw conclusions from the urine test for drug testing. For alcohol, they may only go by the breath analyser reports.

As the owner of the company, there is a chance you would not be given any of the details on sample collection procedures. However, it is a mandate that you complete all procedures only through a DOT qualified collection site.

In case of an accident, it is very important to follow the post-accident procedures correctly. Accidents can red-flag your company calling for an FMCSA audit at any time. If the post-accident procedures have not been conducted as per norms or have been skipped, you may have to pay heavy penalties. Therefore it would be wise for an employer to look into the follow up of an accident immediately. You could also hire a Third Party Administrator. This makes dealing with the complexities of DOT qualified post-accident procedures easier.

State Federal Laws for the Trucking Industry

The trucking industry has to comply with federal and state laws that set the bar of rules and regulations to be followed by truck drivers and employers of the trucking companies. These laws help determine who is at fault in case of an accident. The Department of Transportation (DOT) and the Federal Motor Carrier Safety Administration (FMCSA) are the two main pillars of the federal agencies that play a major role at setting these laws.

Every state has its own department of transportation that decides upon the rules and regulations of inter-state commercial trucking.

Commercial Driver Licenses

Following the state statutes and case law on commercial drivers’ licensing is a mandate for the truck driver. Be it any commercial vehicle for that instance, if the driver involved in the collision does not possess the required license, it can be used against him or his employer in the court of law. In this case even if the collision was not your fault, you may be held responsible because of a missing license.

Hours of Service

There are rules pertaining to the hours of service of the driver. The truck driver is required to take necessary breaks during the journey of transporting goods. He is also required to maintain a log or register for the same. The truck driver is not allowed to drive post hours of service or without resting. If it is proved that a driver was driving without sufficient rest, it could hurt his case in court.

Weight of Goods Being Transported

The size of the truck determines the weight it is allowed to haul from one place to another. While single axle trucks are allowed to carry about 20,000 pounds at a time, two axle trucks are allowed 34,000 pounds approximately. Overloading a truck is not only risky but also against the law. Therefore, checking on the weight and load carried by the truck involved in the crash can prove to be helpful during investigation. If the truck was overloaded, the crash would be considered as the truck driver’s fault.

Quality Check of the Truck

Get a thorough check done on the condition of the truck. There are federal laws for ABS (air braking system). If there is any fault in any part of the truck that could have been the cause of the crash, it could be used as a point for legal action. Truck drivers and owners of the trucking company are supposed to make sure that the truck they use for transportation is in top condition.

Hazardous Waste

There are safety regulations for transporting hazardous materials imposed by the Office of Hazardous Materials Safety (OHMS) on the trucking industry. Therefore, if those rules are not met by the driver of the truck or employer, it could be used against him or the employer of the trucking company, in court, in case of an accident. You could consult a lawyer to learn more about these rules.

Liability in Truck Accident Cases

If it is proved that the truck driver or employer of the trucking company is at fault using any of the aforementioned points, the case will automatically fall out of the driver’s favour. The legal theory of “vicarious liability” suggests that the trucking company can be liable for the damages caused by the accident of its employee. In other words, this means the employer of the trucking company is responsible for the accidents that occur during his company’s business hours.

Any negligence while driving proved, for example, violation of rules, etc. would make it easy to prove the fault the driver. Drunken driving, over speeding, being on drugs, etc. is clearly against the law and hence an accident caused under the influence of drugs or alcohol would leave no room for escape. Over speeding can also be used against the driver in court.

Damages That Can Be Compensated For

Learn what damages you can claim compensation for while filing a lawsuit. A few expenses that can be covered are as follows:

Pain and Suffering: You can ask for compensation for the mental stress and physical discomfort that the accident has brought about. This includes stress, pain, anxiety, etc.

Lost Money: Health care post-accident is bound to keep you at a financial loss. You could claim for all the wages lost during recovery period.

Medical Expenditure: You can claim for hospital and doctor fees. You can also claim for medical service at home and ambulance fees.

Lost Capacity to Earn: If due to the unfortunate accident, you have any damages that impair you to earn money in the future; you could file for claim of lost ability to earn. For example a broken arm, leg, loss of memory, etc. can be claimed.

Loss of a Loved One: In case of demise (could be parent, child or spouse) you could file for compensation of loss.

Talk to a truck accident lawyer for best advice on compensations and case related laws. It is important to hire a truck accident lawyer for any legal action post-accident.

As the aforementioned steps are essential to be taken after an accident, there are also a few measures that could be taken as preparation for a mishap. Nobody wants an accident. But in case you or your employee is faced with one, here is what could be handy.

Prepare for an Accident

There are a few things you could use to prepare your driver in case of an accident. You could keep your truck equipped with a fire extinguisher, warning triangles, disposable camera to record images, a pen and paper to note down the happenings immediately after an accident, etc.

It is extremely important to give your employee (truck driver) a reliable 24 hour first point of contact in case of any emergencies or an accident.

Let it Not Repeat

Identify the root cause of the accident and fix it so that it does not happen again.

Check if the driver had enough of time to rest before getting behind the wheel. If not what could be done to help the situation?

If he was in a hurry, then what caused that hurry? Was it his fault or are your company deadlines too stringent?

Check if you have hired a good driver and if you have done the necessary background check of the driver before hiring him. A truck accident can have very serious consequences and hence cannot be taken lightly. It is the duty of the owner of the trucking company to handle such situations responsibly. For more information on procedures post truck accidents, refer to our Truck Driver Accident Procedures Part 1 blog.

Truck Driver Accident Procedures Part- I

Accidents are those unfortunate mishaps you never want to face irrespective of your business line. Needless to say, the consequences of truck accidents are serious and often harsh. They therefore put a lot at stake. In addition, you can have the FMCSA monitor your company and other companies involved in the accident as well. As bitter as the truth could get, there is no way to strike out accidents altogether. They are bound to occur at some point or the other, be it for your fault or the fault of another. However, there are ways to minimize the risk of an accident. Taking preventive measures can sure reduce the frequency of truck accidents.

In case of truck accidents, it is crucial that these measures are taken seriously as these accidents have a much larger impact in comparison with normal car accidents.

Truck accidents cause grave injuries disrupting the mental status of everyone involved in the mishap. The seriousness of these accidents can never be underestimated. So, What causes these incidents to happen? How can they be avoided? In case of an accident, what are the immediate steps to be taken?

Trucks on road come with their own set of rules and procedures in case of an accident. Here are a few immediate steps you must take in case of an unfortunate collision.

Stop Your Vehicle

No matter how small the hit, it is very important to pull up and check if the person you have banged is alright. If possible, for best investigation, leave the vehicle in the same position as it came to rest right after the collision. You don’t want a hit and run case, therefore, do not leave the accident scene until the investigation is completed. Staying at the accident site will also help you gather more information about the accident for further help with investigation.

Who All Are Injured?

Check how many vehicles and pedestrians are involved in the crash. It is important to first cater to your own immediate needs. If you can move about without much pain, check on the other people involved in the accident and offer help.

Call 911 (The Police)

In case of an accident, call the police immediately. In most cases you would be dialling 911. If the accident has occurred on the highway then your call will be routed to your local law enforcement agency and emergency responding official as part of procedure. Give them exact information about the number of casualties so they can arrange for required number of ambulances.

What if the accident is very minor and there is less injury? Even in this case you will need to call the police. You need to document the accident right away and have records maintained of all involved vehicles by the police for further investigation and record maintaining purpose.

First Aid and Medical Attention

Accidents often lead to internal injuries. Although you may look fine on the outside, you may have some internal bleeding, blood clots, hairline fractures, etc. These injuries may show no symptoms immediately. However, it is important to get yourself and the people involved in the accident examined by a medical professional to remove any sign of doubt for the same. The sooner you have this examination done, the better it is, as any delay would cause confusion in case of an internal injury. It would be difficult for a doctor to say if the injury had really occurred from the accident or not if medical attention is procrastinated. This would also hamper medical insurance claim and cover.

Collecting Information from the Accident Site

If you are not as injured and are safe to walk around the accident scene, you should try to collect as much information as you can in order to help with investigation.

Usually, what looks like a minor incident at first, turns out to be a major one later on. Hence, collect all contact information of every individual involved in the accident. Onlookers can prove to be beneficial as eye witnesses too. If possible, take down their contact numbers as well. Here is a list of information you need to look for;

  • Names, contact information, addresses, of all victims involved in the accident, and all the witnesses present around.
  • Note down the insurance policy number and information of all victims.
  • The VIN numbers, vehicle model and make, license number of driver and license plate number of the accident involved vehicles.
  • All the property damaged during the accident and injury information.
  • Police and ambulance service information. Also, gather information about the tow truck.
  • The time and location of the accident
  • Description of the accident
  • Road condition, weather at the time of accident and the lighting condition

Take Pictures and Capture Videos of the Site

Soon after the accident has taken place, there is much evidence to capture that may not be easily visible to the naked eye. Photographs can prove the fault of the person owing to the vehicle position, skid marks, injuries etc.

These pieces of evidence may prove to be very helpful in case of any future legal action as well. Snap all the damaged vehicles, skid marks, landmarks and intersections at the accident spot. Do not leave out anything that could add body and proof to the incident taken place.

The accident may have you a little traumatized and hence you are more likely to forget bits and pieces of crucial information later on. Record an audio of the mishap as soon as possible to avoid loss of any information. Videos on the other hand, can be more useful.

Truck accidents often take a long period of time to reach a conclusion in court. These pieces of evidence can therefore help with faster decisions for judgement in case of any legal action.

Gather Witnesses

Absolutely anyone who saw the crash take place could be a witness. However, taking down the statement of a witness is the job of the police.

If the accident is a serious one, there is a thick chance your witnesses would disappear after offering needful help and may also slip away from the sight of the police due to the emergency situation. Therefore, as it could be almost impossible to find these witnesses again, it is important to collect their contact information as soon as possible.

Examine Your Vehicle Soon After the Accident

Even though the accident must have been a minor one, it is extremely important to get your vehicle appraised. However, there is a procedure to be followed for this. Hence rushing to your local repair guy and getting your vehicle examined may not be the best idea.

After an accident, you can claim insurance for the repair of your vehicle. Each insurance policy has its own rules depending on their company. While some companies may demand accident photographs, some may allow towing the vehicle to the company authorized repair station. If you do not follow the rules as per your insurance policy, you may not be able to claim insurance over damage. Comply with the rules in your policy and follow procedure accordingly to make the best of your policy.

In case of an employed truck driver, you may need to contact your employer so that he can contact the insurance policy company for further assistance.

Let Your Lawyer Do the Talking

It is very important to keep mum over the accident details after the happening. Do not flow in emotion and spill out words you would probably regret saying, later. There is a thick chance you have understood the situation wrong too. Maybe everything happened in such a jiffy that you hardly could make anything from what has actually taken place. So it is best to keep calm and keep quiet about the incident. Even if you feel you were at fault, do not be too quick to admit it. Narrate the whole incident to your lawyer and make statements only after you lawyer’s wise advice.

Make sure you do not reconstruct the accident with wrong information. It is also extremely important to take care that you do not lie about any happening during the accident. Hence, if you are unsure and confused due to the trauma of the accident, it would be best to keep silent on the matter till you seek advice from your lawyer.

Maintain the same rules in case you feel the other person is at fault. Do not get into trash talking or an unnecessary fight. This could stand as wrong doing in case of further legal action.

Keep Social Media at Bay

Keep only your family and friends in the loop. This should be done over call or message, strictly offline. Do not post any pictures or videos of the accident online to draw undue attention. For that matter even if you see a post of your accident online, avoid commenting or stating anything about it, since you know better.

Social media posting could call for legal action that would simply add to your trouble. Such actions could also hurt your case in court. Absolutely anything you say online could be used against you in court. Even if deleted later, there can be screen shots for proof. There could also be eye witnesses to a deleted post who could testify the post in court. Therefore, it is very important to stay off social media for a while or keep posts related to the accident away from the online web.

Hire a Lawyer Who Handles Truck Accidents

This is the first thing you need to do after finding yourself in a truck accident, being the truck driver. The sooner you appoint a truck accident lawyer, the more beneficial it would prove to be to your case in court. If you are seriously injured, contact a family member to get you a lawyer. A truck accident lawyer can help in multiple ways. The lawyer will help you recover lost wages in the present and future (until recovery from accident) both. He can also help you with the settlement cost of the accident. He would look into the matter of medical treatment cover and other insurance covers as well.

Most accident cases get complicated due to the involvement of two or more parties along with the shipper, manufacturer, employer of the driver and the trucking company. As a truck driver, you may not have sufficient information for dealing with this legality, therefore a truck accident lawyer is extremely important for you to handle such cases with ease.

Soon after an accident, you would need to work closely with your insurance company to avail cover for the damage incurred. However, it is not a mandate that you have to talk with an insurance company official about the accident details soon after the happening. There is no rule as such either. You could always ask for time to hire and consult a lawyer before you make any statements to any official.

It is crucial that you understand that the insurance company official is not a friend although he expresses concern and sympathy for your situation. Most of the times it is just part of their job to be extra polite to get the right words out of your mouth. Although it may sound like the official is favouring you, you must remember even that is only a part of his job. Insurance companies earn their money by paying out less settlement and damage costs.  Mostly an “I am fine” or “I am good” response may give you a smaller settlement amount than deserved.

Therefore it is indeed wise to hold back your emotions and consult a lawyer before making any statements to anyone about the unfortunate accident.

The aforementioned points are the immediate steps a truck driver should take after finding himself in a truck accident, provided he is lucky enough to not be wounded badly. However, in case of a serious injury, most of these steps may not be possible. It is still important to call the police in case of an accident to seek help with the same.

For more information on truck driver accidents, why do they occur? What can be done to avoid such accidents? Does the incident qualify for an accident? If yes, how to go about with the legal procedure? And general rules to follow after the truck accident, refer to our part 2 blog of Truck Driver Accident Procedures.