Colorado’s trucking industry is the backbone of our state’s economy, keeping goods moving from the Rockies to the plains. But the demanding life of a trucker – long hours, endless miles, and complex regulations – can make it incredibly tough to stay on top of everything, especially taxes. Are you a Colorado trucker who’s fallen behind on your tax filings? Maybe you’ve been putting it off, dealing with more immediate concerns on the road. Or perhaps you’ve received a dreaded notice from the IRS or the Colorado Department of Revenue. You’re not alone. Many truckers find themselves in this situation, and the consequences can be severe, including hefty penalties, interest, and even wage garnishment. That’s right, that money has been earned and it is about to be taken, but you can stop it!
Why Colorado Truckers Struggle with Taxes
It’s no secret that the tax system is complicated, and for independent truckers and owner-operators, it’s even more so. Here’s why so many Colorado truckers find themselves facing tax trouble:
- Complex Filing Requirements: Are you an independent contractor (1099) or an employee (W-2)? Do you operate as a sole proprietor, an LLC, or an S-Corp? Each classification has different filing requirements and deadlines. Knowing which forms to file, and when, can be a major headache.
- Quarterly Estimated Taxes: As a self-employed trucker, you’re likely required to pay estimated taxes quarterly. Missing these deadlines can lead to penalties and interest, quickly snowballing your tax debt.
- Deductible Expenses: You’re entitled to deduct many business expenses, from fuel and maintenance to per diem and insurance. But tracking these expenses accurately and knowing what’s deductible (and what’s not) requires meticulous record-keeping, which is tough when you’re constantly on the move.
- Colorado-Specific Regulations: Colorado has its own state income tax requirements, in addition to federal taxes. Navigating both can be overwhelming. Also, are you driving within the state of Colorado or are you going state to state?
- Time Constraints: Let’s face it, truckers are busy. You’re focused on delivering your loads safely and on time. Finding the time to organize receipts, calculate taxes, and file returns can feel impossible.
- Record Keeping on the Road: Keeping perfect records while living out of your truck is a challenge. Receipts get lost, mileage logs might be incomplete, and the constant pressure of deadlines can lead to procrastination.
The IRS and Colorado Department of Revenue Won’t Wait
Ignoring your tax problems won’t make them disappear. In fact, it will only make them worse. The IRS and the Colorado Department of Revenue have powerful tools to collect unpaid taxes, including:
- Wage Garnishment: This is the biggest fear for many truckers. The IRS or the state can directly garnish your wages or 1099 income, leaving you with significantly less money to cover your living expenses and business costs. This can happen quickly, and it can be devastating to your livelihood.
- Bank Levies: The IRS can seize funds directly from your bank account.
- Property Liens: A tax lien gives the IRS a legal claim to your property (including your truck!) as security for your tax debt.
- Penalties and Interest: Your tax debt will continue to grow with penalties and interest, making it even harder to catch up.
- Suspension of CDL in Colorado: In extreme, persistent cases of unpaid taxes, and depending on the specific circumstances and agreements between state and federal agencies, there could be indirect consequences that might affect a CDL. This is rare and usually involves other violations, but it’s a risk to be aware of. The best way to avoid this is to address tax issues promptly.
Tax Relief Advisers: Your Colorado Trucker Tax Solution
If you’re a Colorado trucker struggling with back taxes, Tax Relief Advisers is here to help. We specialize in providing tax resolution services to truckers across the nation, and we have a deep understanding of the unique challenges you face. We’re familiar with the Colorado-specific tax landscape and can help you navigate both federal and state tax issues.
Here’s how we can help:
- Stop Wage Garnishments: This is our top priority. If you’re facing a garnishment, we’ll immediately contact the IRS or the Colorado Department of Revenue to negotiate a temporary hold or release. We understand that your income is essential, and we’ll work tirelessly to protect it.
- File Back Tax Returns: We’ll help you gather the necessary information and file any unfiled tax returns, bringing you into compliance. Even if you’re missing records, we can help you reconstruct expenses using industry-standard methods (like calculating per diem based on your approximate days on the road).
- Negotiate with the IRS and Colorado Department of Revenue: We’ll represent you in all communications with the tax authorities. Our experienced team knows how to negotiate effectively to achieve the best possible outcome for your situation.
- Develop a Payment Plan: We’ll help you explore all available payment options, including:
- Installment Agreements: Allows you to pay off your tax debt over time in manageable monthly payments.
- Offer in Compromise (OIC): In certain circumstances, you may be able to settle your tax debt for less than the full amount owed. This is based on your ability to pay.
- Currently Not Collectible (CNC) Status: If you’re facing severe financial hardship, we can help you request CNC status, which temporarily suspends collection activity.
- Set Up a Business Properly. We will suggest the best business and tax entity to make sure you pay the least amount of tax.
- Get You on Track for Future Tax Compliance: We’ll help you understand your ongoing tax obligations, including quarterly estimated taxes, and develop a system to stay on top of them. We can even assist you with setting up a system for tracking expenses and mileage.
FAQs
It’s recommended to set aside 25-28% of your weekly net income for quarterly taxes. Or, use the amount you owed from previous year and divide by total income to come up with a more accurate percentage. Be sure to include state taxes if you live in a state that has income tax.
If you have an employee, run them through payroll and issue them a W-2 at the end of the year. If you have a contractor, issue them a 1099-NEC. Make sure you know the difference between and employee and an independent contractor. If you are paying people as IC and the IRS determines they are an employee guess who pays all the past due taxes—you!
Per Diem is a tax deduction for meals and incidental expenses on the days you are working away from home. The current rate for 2024 is 80% of $80 per full day, and 75% of this amount for partial days.
No, as a sole proprietor, you will file one return, Form 1040, which will contain a Schedule C listing business earnings and expenses. It is important to track expenses properly. Call or email us for a free template that will assist you in being accurate.
The IRS will charge underpayment penalties and interest for the tax not paid.
Yes, if you have the full year of e-log records.
This depends on your individual situation, but it’s not likely if you are an owner-operator and file a Schedule C.
Did you know you are paying way too much in tax if you make more than $60,000 and operating as a Sole Proprietor? There are some simple tax strategy that can keep more money in your pocket. Call us and we can explain how an LLC or S-Corp may save you thousands of dollars in hard earned income. We can walk you through the process.
Let your tax preparer know as soon as possible. They can file a one-time 6-month extension for you.
Contact us.
Don’t Wait – Take Action Today!
The longer you wait, the worse your tax problems will become. Don’t let the IRS or the Colorado Department of Revenue derail your trucking career. Contact Tax Relief Advisers today for a free, confidential consultation. We’ll review your situation, explain your options, and help you get back on the road to financial stability.
Call us at 877.501.2220 or visit our Contact page to schedule your free consultation.
Let us be your trusted partner in resolving your tax issues and keeping your wheels turning!
