Taxes, taxes, taxes

As a sole proprietor you will be responsible for income taxes (15% fit the first $74,500 income) & the 15.3 % FICA taxes. There is payroll calculator software out there. This is something you should talk to your accountant about is what I would recommend.

 

The LLC depends on how you elect it to be taxed. I'm having mine taxed as a corp. Done people don't do that because they are worried about "double taxation" which is you paying personal taxes & the LLC paying taxes also. Then when you distribute funds in the form of dividends to yourself that the LLC had already paid taxes on your taxed again. I know it's confusing. I've been researching this fit a month. Do a Google search for LLC as a S corp vs C corp. You would probably be better off as an LLC taxed as a S corp.

I would start by holding 30-35 % until you are sure.

 

You're very welcome. There's lots of info about the best way to set up your business. Like I said, I poured over it for a month & a half, reading some articles multiple times. Also, make sure your accountant is a trucking accountant.

 

Make sure you pay yourself a salary and take taxes out of that
I've been in business for 20 years the first year I did not pay myself a salary and got hit big-time
Since then I pay myself a salary and take taxes out of that and that helps a lot

 

He said he is setup as a sole proprietor so a salary does not apply. Salaries are something you pay yourself with when incorporated, as a sole proprietor the business and personal income are one in the same to the IRS.

While he might want to designate some of his income as a salary for his own personal breakdown of costs, to the IRS it would be meaningless.