Whether your transportation company has one or dozens of vehicles on the road, smart management can save you money. Familiarity with tax laws, simple maintenance steps, and high-tech solutions can reduce the costs of operating your fleet and keep it safer.

START WITH TAXES

One of the best ways to save money is to spend some time with financial and accounting professionals. Deductions make a major difference in the cost of operating a fleet. Smith Schafer has the experience and understanding of the transportation industry to make a positive difference in your future success. Our Transportation Group, comprised of numerous professionals, is committed to serving over 100 Minnesota transportation entities.

Depreciation

  • Depreciation deductions are allowed on vehicles used for business purposes, including passenger cars, light trucks, and vans.
  • The various rules surrounding depreciation can be complex, but Smith Schafer professionals are here to help you simplify your options.

Operating Costs

  • Routine operating costs deductible to the extent of their business-use percentage.
  • These costs typically include:
    • Gasoline
    • Oil
    • Maintenance
    • Insurance
    • Registration and License fees

Leases

  • Monthly lease payments are deductible to the extent of their business-use percentage.
  • Limitations apply to certain passenger cars, light trucks, and vans.
  • Operating costs of leased vehicles are also deductible to the extent of their business-use percentage.

Mileage

  • Whether you buy or lease, it is important to keep good records of business miles driven for tax purposes.

Beyond tax savings, simple maintenance can keep your costs down and your safety record up. Here are five tips to managing your fleet:

  1. Tires
    • Check the air pressure of your tires daily when they are cold and fill if necessary. Low air pressure causes stress and irregular wear that can result in loss of control.
    • Inspect tires every 30 days for wear and evidence that the suspension isn’t aligned properly.
    • Rotate tires regularly to help achieve more uniform wear. The guideline for tire rotation is approximately every 6,000 miles.
  2. Gas
    • Avoid premium gasoline unless necessary. If your vehicles do not specifically require an upgraded fuel, buy regular unleaded.
  3. Maintenance
    • Shop around when you hire out routine maintenance. Costs can vary as much as 50% depending on which shop you use. Consider doing in-house maintenance. Your business can be more productive if your vehicles continue to run during normal hours and are serviced by staff mechanics after hours.
  4. Insurance
    • Keep your fleet in a garage or parked under a carport. As a result, it will help keep them in better condition and if garaged, may lower your insurance cost.
    • Shop for insurance. Re-bid your insurance policy to make sure you’re getting the best deal.
  5. Safety
    • Encourage safety. Run a motor vehicle report on every driver in the company. Revoke driving privileges for those with multiple infractions. Consider rewarding those with good records.

Questions?

What’s driving your business? You should have an advisor on your side to take a tax efficient, customer-centric approach to managing the top and bottom line and everything in between. Transportation has been a key practice area of ours since 1971. Contact us today to learn more about how we can help while providing accurate, timely and professional financial advice.

car and semi on a freeway

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