ment based solely on whether or not they needed it, while keeping a close eye on whatever changes occur in Washington.


STRATEGY TWO - STATE INCOME TAX DEDUCTION If your company has had a good


year and you’re flush with new capital, one strategy might be to consider some of those known expenses you’ll have in 2015 and capture those payments sooner rather than later. They will need to be paid eventually so it may be better to have those expenses now rather than later if you are a cash basis business. For those businesses that have a


state income tax, consider paying it before Dec. 31 to get that deduction in 2014. If you are a C Corporation, then those state taxes are deductible at the corporate level. If you are a pass-through entity, then those taxes are deductible on the personal level. However, there are some income limitations. This also assumes you have enough itemized deductions and are not subject to the AMT.


STRATEGY THREE - MULTI-STATE TAXATION You should make sure with your


CPA that you are filing multi-state tax returns in the appropriate states. Most trucks run in multiple states, and your company may need to file in some of the states where they haul, pick up or deliver freight. The rules requiring a company to file in a state it does busi- ness in are different for every state. The best way to know if you need to file in multiple states and in which states is to consult your tax preparer. Because of the variation in tax rates among states, if you are apportioning all of your income to one state, you may be paying too much.


STRATEGY FOUR - CASH VS. ACCRUAL BASIS What’s your status, good buddy?


It’s a serious question, and it could help you in your 2014 tax liability. If your status is cash basis, then you don’t pay


ARKANSAS TRUCKING REPORT | Issue 6 2014


taxes on income you haven’t received (even if it has been billed), and you will not deduct on your bills that you haven’t yet paid. If you are a cash basis taxpayer,


then pay everything you can pay before year-end. This means the check has to be written and in the mail by Dec. 31 in order to be deductible. If you are accrual basis, then you should make sure you accrue those expenses when the bill comes in during the middle of January.


STRATEGY FIVE - CAPITAL PURCHASES A lot of companies are looking


to add equipment or other assets as their business grows. But it’s not only important to buy it before year-end. You need to have it in hand. If it’s time to go on a buying spree and if you do plan to buy equipment before year-end, make sure it is on the yard and in service by Dec. 31. If you have not taken delivery by that date, then it is not considered in service, and you do not get a depreciation deduction for that.


STRATEGY SIX - PLAN NOW FOR 2015. I know I said there are five


strategies here, but the first and last strategy is to plan early and often. If you’re just now talking with your tax advisor, then you’re starting far too late. Get an earlier start next year preferably as soon as you’ve finished the five strategies listed above. Plan to meet with him or her at least quarterly to keep you on the road to higher profits and no later than the middle of 2015 to start preparing tax projections. It is better to know where you are now to plan for where you will be 12 months from now.


Richard Bell is the CEO and managing partner of Bell & Company, PA. He is a CPA and an Attorney at Law. Jeff Lovelady is also a partner at Bell and Company, PA and he is a CPA and the manager of out Trucking Division of the firm.


35


Truck Safety Program


Funding


APPLICATIONS NOW BEING ACCEPTED.


The Arkansas Commercial


Truck Safety and Education Program has begun its first application cycle.


APPLICATIONS ARE AVAILABLE AT: ArkansasHighways.com/ACTSEP.aspx — or —


Arkansas Commercial Truck Safety and Education Program


c/o Arkansas State Highway and Transportation Department


Program Management Division P. O. Box 2261


Little Rock, AR 72203-2261 — or —


Arkansas State Highway and Transportation Department Central Headquarters 10324 Interstate 30, Room 501 Little Rock, AR 72209


Telephone: (501) 569-2261 Fax: (501) 569-2623 Email: LFPA@ahtd.ar.gov


APPLICATION DEADLINE: FEBRUARY 2, 2015, 4 P.M.


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