In both time management and business there is a constant conflict between the urgent and the important. Too often they are not the same thing. For example, answering a phone call from your credit card insurance provider may be urgent but scheduling an oil change for your truck is important, yet too often the urgent demands attention over the important. Though events such as these may seem simple to prioritize, there are other decisions that are less obvious.
How about specific research on your personal fuel consumption, maintenance and tax reporting? These questions are critical for your survival, but when do you fit them in? When you’re at the side of the road? When you’re staring at your fuel infested paycheck? That’s way too late for survival.
If there was something that you could do to save $7-8,000 per year in taxes it may not be urgent today but wouldn’t that be important? The urgent “day to day issues” should be placed into perspective in comparison to important big picture savings. With taxes, too many operators still wait till they are on the side of the April tax road before evaluating their reporting techniques. Many things have changed in the last ten years to lease/owner operator taxation. A self employed operator faces more tax and potential tax liability than ever before.
For instance, Canada Revenue Agency issued IC73-21R9 in October 2006 which affirms that self employed operators can no longer use the TL2 simplified method (log books used to calculate per day or per meal estimated expense). If you are self-employed and NOT keeping your meal receipts you are either paying too high taxes or your accountant is having you carry a tax liability (probably without you even knowing it). If you ARE keeping receipts you are usually still paying a higher amount of tax than you ever have prior to October 2006 (unless you actually eat $51 per day in meals). You are dealing with either higher taxes or higher liability. You don’t have to be exposed to either if you do your homework.
Truck drivers in Canada make an average of between $50-55,000 per year in taxable income and pay taxes anywhere from $12-18,000 per year. These averages assume either self-employed status or T4 company driver. However, operators who use the per-diem system pay taxes of $4-12,000 per year. The system usually requires a great deal of change in format but it is still easily adaptable by most operators. Check it out for yourself. Don’t wait until you’re at the financial side of the tax road next April or June.