Connect with us

Business

Tax Cuts and Jobs Act had positive impact on owner-operators

Published

on

Because of the Tax Cuts and Job Act, owner-operator taxable income increased 21% while actual tax liability increased only 12.6%, according to American Truck Business Services. (©2019 FOTOSEARCH)

LAKEWOOD, Colo. — Preliminary data based on over 3,000 tax returns indicate that the Tax Cuts and Jobs Act had an overall positive impact on owner-operators in the trucking industry, according to American Truck Business Services (ATBS).

ATBS has observed the following statistics related to how owner-operators fared on 2018 taxes.

First, the average owner-operator’s taxable adjusted gross income (AGI) went from $43,093 in 2017 to $52,180 in 2018.

This was an increase of $9,087 or 21%. The increase was predominantly related to a booming year in the transportation industry.

During the same time, the average owner-operator total tax liability went from $8,242 (2017) to $9,284 (2018). This was a much smaller increase of $1,042 or 12.6%.

The overall effective tax rate for owner-operators went from 19.1% (2017) to 17.8% (2018) or a reduction of 1.3%. The net result is that owner-operator taxable income increased 21% while actual tax liability increased only 12.6%.

Following are some of the specific reasons for the reduction in owner-operator tax liability.

  • 68% of ATBS owner-operator clients took advantage of the qualified business income education with an average of $6,235 being deducted from their tax liability. This was a new deduction for 2018 as a result of the Tax Cuts and Jobs Act.
  • The average client’s standard deduction went from $9,439 to $18,862. The number of drivers filing the standard deduction increased from 71% to 94%. The Tax Cuts and Jobs Act essentially doubled the standard deduction for most tax filers.
  • The average owner-operator depreciation deduction increased from $17,072 (2017) to $20,965 (2018). The significant increase in depreciation was a result of the Tax Cuts and Jobs Act allowing faster depreciation methods than prior years.

The only negative consequence of 2018 taxes was the number of drivers that paid the Affordable Care Act’s individual mandate penalty. In 2018, 28% of ATBS clients paid the penalty with an average penalty amount of $1,027. However, this mandate will no longer be in effect for 2019 taxes.

Overall, statistics from ATBS show that owner-operator clients enjoyed a mostly positive impact from the changes that came with the Tax Cuts and Jobs Act.

American Truck Business Services is the largest tax, consulting and bookkeeping firm in the transportation industry with over 20 years of experience working with owner-operators and independent contractors.

For more information, visit www.ATBS.com .

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

Descartes Systems Group acquires BestTramsport.com for $11.2 million

Published

on

BestTransport has been connecting shippers and carriers to streamline transportation processes for more than 15 years. (Courtesy: DESCARTES)

WATERLOO, Ontario, Canada — Descartes Systems Group, a global company that unites logistics-intensive businesses in commerce, said it had acquired BestTransport.com Inc. (BestTransport), a cloud-based transportation management system (TMS) provider focused on flatbed-intensive manufacturers and distributors.

BestTransport has been connecting shippers and carriers to streamline transportation processes for more than 15 years.

Shipper and carrier customers leverage BestTransport’s platform to more efficiently manage numerous shipments each year across North America and Europe, according to Andrew Roszko, executive vice president of global sales at Descartes, adding that the company offers a full TMS suite of solutions from contract rate management through to load building, shipment execution and freight payment, with extensive capabilities for flatbed transportation moves.

“Moving goods in the flatbed market requires domain expertise and special equipment, and the associated transportation management processes have some unique characteristics,” Roszko said. “BestTransport has built a great business by creating a platform that addresses these unique characteristics with solutions available for both shippers and carriers.”

“BestTransport, like Descartes, sees the value in creating a common platform for multiple constituents to collaborate and manage the lifecycle of shipments,” said Edward J. Ryan, Descartes’ CEO. “By combining BestTransport’s platform with our Global Logistics Network, we can offer additional solutions to the community, such as Descartes MacroPoint Visibility and Capacity Matching. We welcome the BestTransport team of domain experts and community of customers to Descartes.”

BestTransport is headquartered in Columbus, Ohio. Descartes acquired BestTransport for $11.2 million, net of working capital, satisfied from Descartes’ existing line of credit.

 

 

 

 

 

 

 

 

Continue Reading

Business

ATA Freight Forecast projects 25.6% increase in tonnage by 2030

Published

on

ARLINGTON, Va. — The American Trucking Associations Wednesday released its latest ATA Freight Transportation Forecast: 2019 to 2030, an annual projection of the state of the freight economy, showing continued growth in the industry.

“America’s trucking industry, and the overall freight transportation industry, are poised to experience strong growth over the next decade as the country’s economy and population grow,” said ATA Chief Economist Bob Costello. “Our annual Freight Forecast is a valuable look at where we are headed so leaders in business and government can make important decisions about investments and policy.”

Among the findings in this year’s Freight Forecast:

  • Overall freight tonnage will grow to 20.6 billion tons in 2030, up 25.6% from 2019’s projection of 16.4 billion tons.
  • Freight industry revenues will increase 53.8% to $1.601 trillion over the next decade.
  • Trucking’s share of total freight tonnage will dip to 68.8% in 2030 from 71.1% this year, even as tonnage grows to 14.2 billion tons in 2030 from 11.7 billion tons.
  • Truckload volume will have an average annual expansion of 1.5% a year through 2024 and 2.1% for 2025-2029.
  • Less than truckload volume will have an average annual expansion of 1.8% through 2024 and 2% for 2025-2020.
  • Private carrier volume will have an average annual expansion of 1.5% percent year through 2024 and 2.2% per year for 2025-2029.
  • In 2019, truckload will handle 71.1% of truck freight volume, LTL 0.9% and private truck 35.1%
  • Trucking and total rail transportation will lose relative market share, even as revenues and tonnage grows, while intermodal rail, air and domestic waterborne transportation will show modest growth and pipeline transportation will experience explosive growth – surging 17.1% in tonnage and 8.6% in revenue over the next decade.

As with any industry, forecasts are in part based on what’s happening with the U.S. economy.

The executive summary of the Freight Forecast notes that the forecast is being released when the U.S.  economy is experiencing some volatility as uncertainties mount.

“Despite prospects for solid trend-like growth in the U.S. in 2019, investor concerns over rising risks of a downturn after 2019, stoked by developments abroad and policy concerns, resulted in sharply worsening financial conditions in late 2018.

“Helped by a dovish pivot in Federal Reserve Board monetary policy, a recovery in financial conditions is now supporting Gross Domestic Product (GDP) growth above trend. The second estimate of first-quarter 2019 U.S. GDP growth was 3.1%, up from 2.2% in the fourth quarter of 2018 and in line with the strong 2.9% economic growth for 2018. The healthy economy in 2018 resulted in a very strong freight market for the year.

“The robust first-quarter pace of 2019 economic growth is expected to be temporary, as it was driven by two sources of strength that could easily reverse later this year: inventory investment and net exports. Both components are volatile and rarely indicative of underlying momentum in the economy.

“Real 2019 GDP growth is expected to moderate beginning in the second quarter, and we look for a 2.7% increase for calendar year 2019. We predict annual real GDP growth will slow further to 2.1% in 2020 and 1.8% in 2021, with implications for slower growth in freight transportation demand.

“Freight Forecast clearly lays out why meeting challenges like infrastructure and workforce development are so critical to our industry’s success,” said ATA President and CEO Chris Spear. “It belongs on the desk of every decision maker in our industry and in the supply chain.”

Continue Reading

Business

ATA Truck Tonnage Index surges 6.6% in July, 7.3% higher than July 2018

Published

on

Compared with July 2018, the SA index surged 7.3%, the largest year-over-year gain since April. (Courtesy: AMERICAN TRUCKING ASSOCIATIONS

ARLINGTON, Va. — American Trucking Associations’ advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index increased 6.6% in July after falling 1.2% in June. In July, the index equaled 122.7 (2015=100) compared with 115.1 in June.

“Tonnage in 2019 has been on a rollercoaster ride, plagued with large monthly swings, which continued in July as tonnage surged after falling significantly in May and June,” said ATA Chief Economist Bob Costello. “However, take out the month-to-month noise, and you see that truck tonnage is still on a nice upward path. It is important to note that ATA’s tonnage data is dominated by contract freight, which is performing significantly better than the plunge in spot market freight this year.”

June’s reading was revised down compared with our July press release.

Compared with July 2018, the SA index surged 7.3%, the largest year-over-year gain since April.

The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 122.8 in July, 4.5% above June level (117.5). In calculating the index, 100 represents 2015.

Trucking serves as a barometer of the U.S. economy, representing 70.2% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 10.77 billion tons of freight in 2017. Motor carriers collected $700.1 billion, or 79.3% of total revenue earned by all transport modes.

ATA calculates the tonnage index based on surveys from its membership and has been doing so since the 1970s. This is a preliminary figure and subject to change in the final report issued around the 5th day of each month. The report includes month-to-month and year-over-year results, relevant economic comparisons, and key financial indicators.

Continue Reading

Trending