Your Trucking Business Had a Strong Year: What Could That Mean for Your Tax Bill?

More loads, better rates, a second truck on the road. Cash flow looks great and the year feels like a win.

Then your accountant tells you what you owe in tax.

If this year came in well above what you expected, you'll want to know before the return gets prepared.

At Truckers Pro CPA, we'd rather go through your numbers in the fall than explain them in March, when most of the choices are already made.

Revenue And Taxable Income Aren't The Same Number

You get taxed on what's left after eligible business expenses, not on what came in. If you added a truck or picked up new routes but your costs didn't rise as fast as your revenue, your profit jumped, and so did the income that gets taxed.



Your bank balance won't show you that. A company can have plenty of cash on hand and still owe a big tax bill it hasn't set money aside for.

Pull Your Numbers Together Now

Sit down with your year-to-date figures while there's still time to do something about them. You'll want revenue and net income first. Then go through fuel, repairs and maintenance, insurance and licensing, interest on any financing, equipment purchases, payroll, and what you've paid yourself.



Vehicle expenses need special attention. The CRA expects records that support business use, including your total kilometres and the kilometres driven to earn business income. If your logbook has gaps, fix them now while you can still reconstruct the trips.

The same goes for the rest of your records. A receipt stuffed in a cab and never entered won't be deducted, and a repair coded to the wrong account can throw off your totals. Match your books to your bank and card statements and sort out whatever doesn't line up.

Decisions That Can Still Change The Outcome

A few things can still move before December 31. You can pull a planned equipment purchase into this year or push it into next, and you can bill and collect on a different schedule if your contracts allow it.



If you're incorporated, you can also change how you take money out of the company. Salary and dividends are taxed differently, and the mix you chose when profit was lower may not be the best one now. 

Income splitting and tax deferral can come into it too, depending on who owns the company. Each of these carries into next year's return as well, so run them past your accountant with your full numbers in front of you before you commit to anything. 

Think Twice Before Buying Something Just For The Deduction

After a big year, someone will tell you to buy equipment to save on taxes. Spending a dollar to save a portion of that dollar in tax leaves you with less money than you started with.



If you were going to replace that tractor in the next year or two anyway, the tax treatment can help you decide when. If you weren't, a deduction alone rarely justifies the purchase. Ask whether the business needs it, then look at what it does to your taxes if you buy it now versus next year.

Structure Matters More As Profit Grows

Incorporation is usually the first structure question once a trucking company starts clearing real profit. If you're still a sole proprietor, ask whether staying that way is costing you. 



If you're already incorporated, the questions get more specific: how much profit stays in the company, and whether you pay yourself in salary, dividends, or a mix. A carrier with one truck and a carrier with six often end up with very different answers.

The CRA also has rules that apply to trucking in particular, including reporting requirements for certain payments made for trucking services. They're easy to overlook while the business is growing, so have your accountant check that you're covered.

Get A Rough Number Early

You don't need a figure that's right to the dollar. A rough projection of this year's profit and tax tells you whether you're heading for a bigger bill than you planned for, and whether anything is worth acting on before December 31.



If your company is having a strong year, Truckers Pro CPA can go through your year-to-date numbers with you and map out your options while the year is still open.

Book Your Consultation Now!