transportation company tax deductions

Transportation Companies and Tax Reductions: What You Need to Know as You Grow

In 2016, there more than 4,900,000 people working in the transportation industry in the United States. That means that there are a lot of transportation companies in the US, hauling all sorts of goods throughout our great country.

At Tax Reduction Concierge, we use a few different tax strategies to help high-performing businesses reduce their tax liability. Our team knows the tax solutions that can legally cut your taxes up to 65%.

The Research and Development Tax Credit

In order to spur growth in the American economy, Congress passed the Research & Experimentation Tax Credit, which allows companies to write off certain R & D expenses from their taxes. Large-scale transportation companies are looking into AI. In the very near future, we may see autonomous vehicles all over the road.

If your company has invested in this technology or is doing research on self-driving cars, it may be a good idea to consult with a tax professional. They will be able to inform you if you are paying too much in taxes, and how to decrease your liability.

Captive Insurance

Transportation involves a large degree of risk. Motor vehicle accidents cost the US economy $4,900 dollars per second. Even the strongest relationships between two businesses can break down. You never know when a massive hurricane will ravage the East Coast, or a series of tornadoes will tear through the Midwest and your trucking fleet. Cargo loss, losing a contract, and special risks must all be accounted for in your balance sheet.

Captive insurance companies could be what you need to not only help you deal with risk, but to pay less in taxes. These companies are wholly-owned subsidiaries. Using captive insurance means you can deduct up to $2.3 million per year against ordinary income. The captive receives all of the funds, completely task-free.

Captive insurance companies have many benefits. It is a good idea to contact a team of tax professionals about this.

Private Contractors vs. Workers

Employees and contractors are treated differently by the law. If an employee works for a certain period of time, then they need to receive benefits, like health insurance or workers’ compensation if they get hurt on the job. These have their own tax considerations. We broke down state vs. federal employment taxes in a blog and it may be helpful to read that.

If you run a transportation company, it may be a good idea to look into whether or not your drivers could be independent contractors. You might thank yourself in the long run. You are not required to file 1099s for outside carriers, but you ought to file them for owner-operators that you have under contract.

Tax Reduction Concierge wants to help your transportation company lower your taxes. Our team of tax experts has already helped many transportation companies before. The next success story could be you. Call us today at (800) 575-8496, book a live demo, or take our one-minute questionnaire today.