Becoming an O/O Questions

Discussion in 'Ask An Owner Operator' started by WilsonRS, Apr 17, 2015.

  1. WilsonRS

    WilsonRS Bobtail Member

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    My husband is currently a company driver, hauling frac sand for the oil fields in West Texas. He would like to become an O/O ASAP. Funds are not an issue for starting up.

    Questions are:

    We would own our truck and trailer and would be signing a lease through a company, doing this would we still have to file for a DOT Number or any other permits?

    Do you have to have a business name and file a business permits of any type if you only wany to work for yourself? Or can you just be a 1099 employee and pay your quarterly taxes?

    I have been trying to find as much as I can through the internet but it is extremely hard to find straight information.

    He is also looking at leasing through a company, that does flat bed hauls and is NOT invovled with the oil fields (start up costs are much cheaper, as pneumatic trailers and blowers are extremely expensive).

    Any info, would be helpful. We currently live in W. Texas but are wanting to relocate to E. Tennessee (hence getting out of the oil fields).
     
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  3. maggard359

    maggard359 Medium Load Member

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    Leasing on to a company you do not need dot unless buying your own plates. If company provides them at a cost or free you don't need dot. Don't need business name you can do 1099 no problem. Don't do a lease purchase truck, there is nothing to gain where you rent a truck to haul their freight. He may want to decide where he will be using this truck because there are two very different spec'd trucks for oil field versus highway flatbedding if I were buying it.
     
  4. WilsonRS

    WilsonRS Bobtail Member

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    Thank you for the reply. As far as taxes go, do you have to have a tax ID number? How do taxes work yearly? Do you just estimate and pay your quarterly federal and self employment taxes? Do you need an ifta permit or does the company you lease with normally have that as all?

    We would be looking at making E. Tennessee our home base and no oil fields, unless oil came way back up.

    He left me to figure out everything and how to get it started ...
     
  5. maggard359

    maggard359 Medium Load Member

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    Ssn will be fine no tax is needed although you will need ein number from irs when paying 2290 heavy highway use tax. You can do estimates quarterly or not at all and pay at end of year. 17 years I have never paid quarterly.
     
  6. WilsonRS

    WilsonRS Bobtail Member

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    How do you go about getting an EIN? And is $2.20 per mile with an average of 2900 miles a decent job? I figured that the gross would be around $300k and then take 50-65% of that for taxes, fuel, insurance and expenses. I don't know if that is realistic or not?

    And just to clarify, you do not have a business name or anything right, you just use your ssn to pay your taxes? Also, can you be taxed by states in which you pick up and deliver loads or no? And how does ifta work?
     
  7. terryt

    terryt Heavy Load Member

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    Check out Mercer out of Louisville KY very good company and would help you with all the tax stuff. Use to work there wish I never left the drivers there are always helpful treat you like a family. They are a true open door company. For you wanting to live in TN it would be a good fit.
     
  8. tnevin225

    tnevin225 Road Train Member

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    And is $2.20 per mile with an average of 2900 miles a decent job? Yes it is if you can get it. As far as taxes and things go just get hooked up with a good truck tax place like ATBS, ,alot of company's will get you hooked up right from the start with that especially ones that deal with O/O like Mercer and Landstar? Good Luck
     
  9. blairandgretchen

    blairandgretchen Road Train Member

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    michaelg and truckon Thank this.
  10. GAPathfinder

    GAPathfinder Light Load Member

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    I agree with maggard359, hold your self-employment taxes in a separate account and pay at the end of the year, as if you have a catastrophic repair that money will be available and the expense will reduce your tax base anyway. Don't give Uncle Sam more than you have too. The rule is your suppose to quarterly if you owe $1,000 or more. First year in business, you probably will not show a net profit with all your deductions.

    EIN can be obtained at IRS.GOV

    If you do setup a fictitious name such as ABC Trucking, then you would use the EIN instead of your SSN. But if you operate business as a sole proprietor under your legal name such as Tom Doe, then you would use your SSN. Do not recommend setting up a S Corp or LLC until your company net profit reaches to $80,000.00 or more. Then it is advisable to protect your assets.

    Good luck and do the hard work as Kevin Rutherford says.
     
  11. blairandgretchen

    blairandgretchen Road Train Member

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    Agreed, Roy, but hold x amount each week for maintenance, and taxes separate. Don't touch tax account - regard as a potential back up savings AFTER taxes have been settled.
     
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