We'll keep you constantly in the loop with bookkeeping updates. Got urgent queries that can't be ignored? Rest assured, we'll respond to you within one business day or even less; tailored to meet the demands of tow truck drivers.
Bench Accounting equips you with a platform designed to automate data records from most principal providers and steer clear of frequent errors. We collaborate with key service providers such as Gusto, Stripe, Shopify, and Square, ensuring your towing business's finances are consistently on point.
Say goodbye to mountains of receipts and endless hours spent tracking finances—we automate inputs directly from your linked accounts. Get insights straight from one centralized dashboard so you can easily gauge the financial health of your tow truck operation, allowing you to make informed strategic decisions.
DR. BUKKY KOLAWOLE
As a tow truck driver, you may be eligible for a variety of tax deductions. Here are a few examples:
- Vehicle expenses: Tow truck drivers can claim a deduction for the costs associated with running your tow truck for business purposes. This can include gas, repairs, maintenance, and even depreciation.
- Office expenses: If you manage your business from home, you might be able to deduct part of your housing expenses. These can include a portion of your rent or mortgage, utilities, and property taxes.
- Supplies and equipment: Purchases of any equipment needed for work, such as safety gear, towing equipment, necessary tools, and uniforms that are not suitable for everyday wear, may all be deductible.
- Professional fees: Fees paid to accountants, lawyers, or industry consultants can be written off.
- Insurance: Business-related insurance premiums, such as liability insurance, are usually deductible.
Note, it's important to keep meticulous records for all business-related expenses, as you'll need these in case of an audit. It's recommended to consult with a tax professional or an experienced bookkeeper who understands the specific nuances and laws related to your industry.
Tracking and documenting income and expenses for your tow truck business can be done in several ways. The most efficient method is to use an accounting software program, ideally something cloud-based and accessible from anywhere. These types of programs can automatically record and categorize your financial transactions, saving you time and ensuring accuracy.
For income, you should document all payments received from customers and any other sources of revenue. Keep all receipts and sales transactions. You might also need to account for tips received, if applicable.
For expenses, save all receipts and document all your costs, no matter how minor they may seem. This includes not only obvious big-ticket items like truck maintenance and fuel, but also smaller costs like meals, office supplies, and communications expenditures.
Keeping track of your incomings and outgoings will not only help you maintain control of your business finances, but will also be crucial when it comes to tax time. Without an accurate record of your income and expenses, you might pay more tax than you need to or, worse, find yourself in trouble with the tax authorities.
Yes, you can depreciate your tow truck. Depreciation is a way to spread out the cost of a large purchase over the life of the item, in this case, your tow truck. This is done for tax and accounting purposes. In accounting, depreciation allows you to allocate the cost of an asset over its useful lifespan. This reduces your taxable income, and thus, the amount of tax you owe.
Depreciation impacts your accounting by reducing the value of the asset (the tow truck) on your balance sheet over time. Meanwhile, it increases expenses on the income statement, reducing your net income. Despite this, your cash flow isn't directly affected because depreciation is a non-cash expense. Remember, you've already made the payment when you purchased the truck.
When depreciating your tow truck, it's recommended to adhere strictly to the IRS rules on depreciation. The IRS issues tables that indicate the lifespan of different types of assets. For tow trucks, which fall under five-year property (according to IRS), you can depreciate the truck over a span of five years.
Nope! All bookkeeping is completed in-house.
Your bookkeeper will be your main point of contact, but at times you might hear from another member of your team. This is usually when your bookkeeper goes on vacation, is sick, or otherwise unavailable.
We handle the bookkeeping for you but sometimes we’ll need your input, especially at year-end. On average, expect to spend 15 minutes each month answering questions for your bookkeeper, or uploading supporting docs.