Like I said I don't have all the answers, and it would be smart to ask a professional tax advisor on this issue, but there has to be a better way.

You guys need to back off here, it was just a suggestion..geeez. I'm not giving tax advice there is no way I can tell what might happen if this is done in this way, but I can tell you this...I'm not to afraid to ask. As a sole proprietorship, all property of the business is in the owner's name. The owner is responsible for all debts of the business and is legally liable for any problems that the business might have. In addiiton the life of the business is limited to the life of the owner. If the owner dies, the business legally ceases to exist. I just don't think the best way to start a trucking co. is to be a sole prop. As an LLC, the members have limited liability, income flow and losses to individual members tax returns. Any time there is a substantial personal liability for the owner I feel it would be wise to have LLC status. Just my opinion, I'm not a tax advisor in any way shape or form.

The situation described in your original post just sounded like more of a headache than it needed to be for hubby to go owner op. Yes, an LLC is a better option than a sole proprietorship as far as liability goes. Your best bet would be to talk to an actual accountant (not H&R Block) about that sort of thing. They are worth every penny when it comes to retaining one, but they are free to talk to.

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I didn't say it was your fault, I said I was going to blame you.

Dynamite comes in small packages, Nitro comes in smaller ones, take your pick!

There is a better way demand that the findings of the 1916 US Supreme court be upheld. It says the IRS is illegal.

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Ignorance scares me, Even in myself.
The only dumb queston is the one you failed to ask.
Just becasue its "legal" doesn't mean it's safe! I know when I need to sleep and when I am safe to drive. Fight the HOS. Write your Congressman.

There is no such thing as a "BACK-HAUL" everything has a start and stop point, If it needs to be moved then it is a load, period. Insurance, tires, fuel,etc... aren't any cheaper heading towards your home than they are going away. BACKHAUL is BS.

Good luck on that ......

You can join the ranks of the many who have tried and lost that arguement.

Attorneys will attempt to "pierce the veil of incorporation" in the event of a lawsuit to attach the owners assets. It happens all the time.

Many drivers are under the mistaken belief that once they "incorporate" they are safe from law suits and losing their personal possessions. In reality it simply provides a hurdle for the prosecuting attorney to walk over. This is done trough anylizing the businesses records and practices. If their is no separation of monies from the business to the "owner" with proper documentation then the "incorporation" will be nullified and all assets of the owner(s) will be up for grabs.

I am not a tax expert or cpa either but I can tell you if your going to be in business for yourself you sure better get a competent cpa, one who specializes in the trucking industry.

I believe LLC is a fairly new construct as well. I am not sure if it has been fully tested in the courts yet. My comment about sole proprietership was for simplicity. If your looking for liabilty protection then get an umbrella policy through your insurance company and have any personal assets either transferred into another relatives name or better yet put all assets into an irrevocable trust. That is the only iron clad way I know of that can save a private citizens assets in the event of an aggressive lawsuit.

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Knowledge is Power

Well,
There would be separation of monies from the co. to the employee a regular w2. You can own a company and still be an employee you know, as long as all your t's are crossed. Yes, it seems like a headache and we've owned 4 other trucks before so we are gun shy and don't want to be a sole prop. ever again. An accountant would have to be used, there's no way i would do all that paperwork. An umbrella policy is a good idea, but i'm not willing to put everything we own into someone else's name. It's called limited liability for a reason as long as earnings and profit get separated into respective accounts, and all taxes are taken out, you have an accountant handling all operations I really don't see a problem with it. Income would be reported as required on w2's per individual taxes, the owner is an employee and reports his income on his personal tax return. This is not my idea, there are guys that really do this. They have their own customers though, not independent contractors that's when you get into trouble and can't make the income. You have to have your ducks in a row and know the tax laws. As long as taxes are paid, there is no reason for an audit. Keep good records, that's the accountants job, and yet another deduction. An attorney cannot take the house if it's not included in the assets of the company. LLC is a hybrid taking the advantages from a schedule C corp and the advantages of a sole prop. without the liability issues and not having to sell stocks.
Still not convinced guys, I'm going to ask about this and find things out even if I have to take yet another class, a tax class.

Rosebud

I am an enrolled agent to practice before the IRS for over 20 years. I see holes in your plan as I mentioned earlier.

There is no problem being on a W2 and own the corporation. It was the leasing items your were discussing that cause the problem.

Again.... please report your Audit results and the ensuing penalties that you will receive for your crackpot idea....