What business type or entity did you choose?

Discussion in 'Ask An Owner Operator' started by cbradiohead, Dec 15, 2014.

  1. cbradiohead

    cbradiohead Bobtail Member

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    Hey all, happy holidays. I am wondering which business type you have chosen such as LLC or C corp S corp?

    I already know the general answer that it all depends on a bunch of individual needs and that its different for everyone. Of course but I am trying to find out who actually formed a company and not just a sole proprietorship and why they decided on what they did.

    My main goal is own a trucking company one day with several trucks but of course I'll start off as an owner operator. I have been driving for about 3 years now and Im still learning all the business ropes. This is part of my long list of research. Thank you for the help! Oh and let me know if I need to move this somewhere else. I wasnt sure where to post.
     
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  3. biodine

    biodine Bobtail Member

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    cbradiohead,
    I used an LLC, I believe C. Make sure you ck with a cpa along the way on all tax issues. A lot of business owners neglect working with the professionals (cpa, attorney etc) because of the costs, but if you ever run into a problem and they are there for you, that is invaluable. When you go to add employees, don't get discouraged if the 1st 1-4 don't work out. When you find the driver that thinks like an owner and takes care of your equipment and your business, the hunt and headaches to find them is worth it. Just give them the FACTS--> Fairness, Accountability, Consistency, Truthfulness and Sincerity. If you take care of your people, they will take care of your company. Be safe.
     
  4. biodine

    biodine Bobtail Member

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    cbradiohead,

    within an LLC you can set it up as a C or as an S. Sorry for any confusion sir.
     
  5. BASARAB

    BASARAB Light Load Member

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    I just spoke to my accountant about it last week. He made an example. Let's say u make 100k profit. With LLC you pay taxes for the whole amount. With corp you pay yourself a salary of 50k and from another 50k you pay only corp profit, no social security or medicare taxes. So in this scenario you will save 5-7k in taxes at the end of the year. In the long run, especially since u plan on adding more trucks, its better for u to do s corp. Because if you make 300k, you still can pay yourself only 50k salary
     
    Last edited: Dec 15, 2014
  6. ShortBusKid

    ShortBusKid Heavy Load Member

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    If you're a one truck O/O I don't see any benefit to going C corp. By the time you write everything off you're individual tax rate is going to be less than the corporate tax rate in most cases even with SSI added on. That's been my experience anyway. I'm not an accountant but I did stay at a Holiday Inn Express last night! :biggrin_25519:

    if I ever add another truck or two then it'll be corporation all the way for both tax and liability protection.
     
  7. Freakin

    Freakin Light Load Member

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    Del Mar, CA
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    Im in the same boat trying to figure out how to classify my taxation, I started off as an LLC but I chose the sole proprietorship, I asked around before doing that, but everyone I talked to at that point all said the same about the sole proprietorship.

    A couple months ago, I was invited to watch a video about setting up LLC's and "S" & "C" Corporations, the webinar was thru 800Accountants, it was interesting, did learn some more about this.

    Now I have decided to change over to a S-Corporation, cause of being a sole propietorship that's the highest taxation. I've grossed for 2014, close to 350k with a one truck operation. And in taxes I owe $60k for the year.:biggrin_2554:

    Im trying to figure out if I can change the way I want to be taxed for 2014, or if it's too late now?

    If anyone out there can help, I would be greatly appreciated.:biggrin_25520:
     
  8. cbradiohead

    cbradiohead Bobtail Member

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    I think that to take advantage of the corp taxing, you can form a LLC and have it taxed as a S corp or C corp.
     
  9. double yellow

    double yellow Road Train Member

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    Under the Amtrak Act, a sole proprietor with 1 truck and no employees is exempt from filing income tax returns for every state in which he does business.

    A corporation does not qualify for Amtrak Act protection. Most states don't care, but CA, IL, MA, MI, NJ & NY have been known to impound out of state trucks until state income taxes & penalties were paid.


    Something to keep in mind...
     
  10. cbradiohead

    cbradiohead Bobtail Member

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    You're saying that just by even quickly crossing through a state you need to file state income taxes for that state if you have more than 1 truck and youre not a sole prop? What if its not actually your truck but someone else's who has leased on to you? Wow I've never heard of that. That's a pain in the ###.

    Does anyone actually file? :biggrin_2559: Im actually wondering
     
  11. double yellow

    double yellow Road Train Member

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