Trucking accountant in Oshawa

Tractors and trailers are the balance sheet

For a carrier, the equipment is the business. Tractors, trailers, reefers and the shop that maintains them are usually the largest assets, often financed, and they are claimed through capital cost allowance rather than expensed. Tractors and trailers fall into different classes with different rates, so each unit is tracked on its own line rather than lumped in as “equipment”. A unit has to be available for use before year-end to be claimed that year.

Financing adds its own entries. Lease payments and loan payments are treated differently, interest is deductible while principal is not, and a lease that is really a purchase is recorded as one. Getting those right is what makes the balance sheet match the lender’s statements. CCA classes covers the categories.

Freight is also uneven through the year. Rates, volumes and repair bills rarely line up, and a major engine or transmission job can land in the same month as insurance renewal. A simple cash forecast, updated from the monthly books, shows those months coming; cash flow management covers how it is built.

Selling or trading a unit

Carriers replace equipment on a cycle, and each sale or trade-in has tax consequences. The proceeds come off the undepreciated balance of the class, and if the class goes negative the difference is recaptured into income. If the last unit in a class is sold for less than its remaining balance, the shortfall can be a terminal loss. A trade-in also carries HST: the dealer generally credits it against the new unit, and both sides of the transaction need to be recorded, not just the net cheque. We look at timing with you before a big trade, because moving it across the year-end can change the result. See terminal losses.

IFTA, IRP and the records behind them

A qualifying carrier running across provincial or state lines reports fuel through the International Fuel Tax Agreement, allocating fuel tax to each jurisdiction by distance driven there, and files IFTA returns quarterly through its base jurisdiction. The International Registration Plan apportions registration fees the same way, by distance in each jurisdiction. Both depend on the same underlying records: distance by jurisdiction from trip records or electronic logs, and fuel purchases by location.

Those records are also the bookkeeping. When fuel is coded by card and unit, and distance is reconciled to the logs each quarter, the IFTA return, the fuel expense on the income statement and the HST credits on fuel all agree. When they are kept separately, they rarely do. We work from the same data for all three.

Fuel is also the largest source of HST credits for most carriers. Every fill-up on a fuel card carries recoverable HST, and a card statement that is posted as a single lump each month tends to lose credits on individual purchases that were missed or disputed. Coding fuel purchase by purchase, against the unit that burned it, recovers the tax and shows cost per kilometre by truck, which is the number that decides whether a lane or a customer is worth keeping. See input tax credits.

Long-haul meals and travel

Long-haul truck drivers get a meal rule of their own. Where a driver is away on a qualifying long-haul trip, a larger share of meal costs is deductible than the ordinary meals limit allows, and the CRA offers a simplified per-meal method instead of keeping every receipt. The trip has to meet the definition, and the logbook is what proves it, so meal claims are built from the trip record rather than estimated at year-end. The rule applies to employed drivers through their own returns and to owner-operators through their business income. Trucking meal claims sets out the conditions.

Owner-operators: sole proprietor or corporation

Many Durham owner-operators run one truck leased on to a carrier. As a sole proprietor, the income goes on a T2125 with the personal return. Incorporating can make sense once profit builds, but a corporation that drives for one carrier, on that carrier’s schedule and dispatch, can look to the CRA like an employee dressed as a company. A personal services business loses most corporate deductions and the small business rate. The contract, how loads are accepted, and who bears the costs all matter; see personal services business risk.

The same question runs the other way for carriers. Paying drivers as incorporated contractors when they work like employees can bring a payroll reassessment with CPP, EI and penalties. Payroll in Oshawa covers running drivers as employees instead, and should I incorporate sets out the wider trade-off for a one-truck operator.

What EverStone handles for you

One CPA, one fixed fee agreed up front:

• T2 corporate return and year-end financial statements, or the owner-operator’s T1 and T2125
• Unit-by-unit CCA schedules for tractors and trailers
• Fuel coded by card and unit, reconciled for IFTA
• Long-haul meal claims built from the trip record
• HST on freight revenue and fuel credits
• Driver payroll or contractor documentation
• Ontario Business Registry annual return

Fixed fees, fully online

EverStone is an Abbotsford CPA firm, and Oshawa is ahead of us on Eastern time. Everything runs by video, phone and secure upload, which suits a business where the owner is in a cab more than an office: receipts and settlement statements can be sent from a phone at a truck stop. The fee is fixed and agreed before work starts. See what it costs.

Remote accounting for trucking from Abbotsford

Trucking accounting for Oshawa clients is delivered remotely from Abbotsford, British Columbia. There is no Oshawa office and no local team. Meetings are virtual, documents are signed electronically, and you deal with the CPA directly. Fuel, unit costs and settlements are tracked as they happen rather than reconstructed at year end.