EIN Question - Truckers' Trucking Forum

Globetrotter · **^ Top** #1 09.17.2009

I have been reading through the forums and I am having a bit of trouble finding answers to my question.

Hubby and I are new Owner Ops and just purchased our first truck to lease on with an LTL company.

We are confused about if we should be using an EIN # and then pay me (wife, co-driver) via 1099? Or is that necessary? It seems from what I have read we don't fit the sole proprietor since we both are owners.

We have a tax person, but I'm not sure if they are knowledgeable enough to do our taxes now that we aren't company drivers. Would any of you recommend ATBS or Higher Roads? Or would we be better off finding a local tax person with some trucker tax knowledge?

Bigray · **^ Top** #2 09.17.2009

if your only interested in payroll, its not necessary. one's social will suffice.

ein, if i recall correctly come w/ corp. status.

Roadmedic · **^ Top** #3 09.17.2009

Quote:

Originally Posted by Globetrotter

I have been reading through the forums and I am having a bit of trouble finding answers to my question.

Hubby and I are new Owner Ops and just purchased our first truck to lease on with an LTL company.

We are confused about if we should be using an EIN # and then pay me (wife, co-driver) via 1099? Or is that necessary? It seems from what I have read we don't fit the sole proprietor since we both are owners.

We have a tax person, but I'm not sure if they are knowledgeable enough to do our taxes now that we aren't company drivers. Would any of you recommend ATBS or Higher Roads? Or would we be better off finding a local tax person with some trucker tax knowledge?

If the business is owned by both of you, an EIN is required. It would be because you are a partnership.

If it is owned by one, you would probably be better off with a EIN in case you ever have to give a 1099 for labor performed on the truck over 600.00 in the year.

You will also need one for the heavy use tax, I believe.

A local person who is well versed in trucking is a good choice. Try for an enrolled agent to practice before the IRS or CPA. You must be comfortable with who you choose.

JasonTheRock · **^ Top** #4 09.17.2009

Quote:

Originally Posted by Roadmedic

If the business is owned by both of you, an EIN is required. It would be because you are a partnership.

If it is owned by one, you would probably be better off with a EIN in case you ever have to give a 1099 for labor performed on the truck over 600.00 in the year.

You will also need one for the heavy use tax, I believe.

A local person who is well versed in trucking is a good choice. Try for an enrolled agent to practice before the IRS or CPA. You must be comfortable with who you choose.

Yes you do need it for the 2290 (HVUT). You should get an EIN anyway because your social security number will be attatched to it. That way you will not have to worry about identity theft. No sense in having a SS# all over the place.

I use brokers to get loads under my own authority, so I give them an EIN instead of my SS# (I am a sole-proprieter), for security reasons. I have about 20 brokers that I use. The more your SS# is out there the more likely that you could have your identity stolen.

Working Class Patriot · **^ Top** #5 09.18.2009

Quote:

Originally Posted by Globetrotter

I have been reading through the forums and I am having a bit of trouble finding answers to my question.

Hubby and I are new Owner Ops and just purchased our first truck to lease on with an LTL company.

We are confused about if we should be using an EIN # and then pay me (wife, co-driver) via 1099? Or is that necessary? It seems from what I have read we don't fit the sole proprietor since we both are owners.

We have a tax person, but I'm not sure if they are knowledgeable enough to do our taxes now that we aren't company drivers. Would any of you recommend ATBS or Higher Roads? Or would we be better off finding a local tax person with some trucker tax knowledge?

I take it since you have an EIN you are an "S" corp.......

What I do is is take what is known as an "officer loan"..... You'll pay less taxes......

In fact....if you do it right, you can reduce your "payroll" to a minimum......

The trick is show that the corp is not profitable......or as profitable.....
Also make sure you leave a "paper trail"...
Find out what you can write off and just not your rig.....
If you have a home office...some of it may be written off as well as the phone and electricity bills.....as a percentage due to business use.

Globetrotter · **^ Top** #6 09.18.2009

Hey all, thanks for the reply's already. After digging a bit deeper I did find this on IRS.gov for married team owner/drivers, so I think we are good with having the EIN # and still being considered sole proprietors.

Question: Can a husband and wife run a business as a sole proprietor or do they need to be a partnership?

Answer: For a business to be classified as a sole proprietorship:

Either the husband or the wife would be the ownerof the business.
Either of the spouses can work in the business as an employee.
If a married couple who file a joint tax return elects to conduct their business activities as a qualified joint venture:

The husband and wife must materially participate in the trade or business.
The spouses must divide the items of income, gain, loss, deduction, credit and expenses in accordance with their respective interests in such venture.

Working Class Patriot · **^ Top** #7 09.18.2009

Quote:

Originally Posted by Globetrotter

Hey all, thanks for the reply's already. After digging a bit deeper I did find this on IRS.gov for married team owner/drivers, so I think we are good with having the EIN # and still being considered sole proprietors.

Question: Can a husband and wife run a business as a sole proprietor or do they need to be a partnership?

Answer: For a business to be classified as a sole proprietorship:

Either the husband or the wife would be the ownerof the business.
Either of the spouses can work in the business as an employee.
If a married couple who file a joint tax return elects to conduct their business activities as a qualified joint venture:

The husband and wife must materially participate in the trade or business.
The spouses must divide the items of income, gain, loss, deduction, credit and expenses in accordance with their respective interests in such venture.

Ok.....

Now we know.......

My advice..incorporate....
As a "sole proprietor" you have more exposure than a corporation.
You can lose your house if you are a sole proprietor......

You want to reduce your exposure....why??????
When you have your name on the door.....people only see $$$$$$$$...
not John Smith Transportation....

Depending on what state your in, you can file all the necessary documents yourself to become an "S" corporation......

Remember....you need to cut down on exposure as much as possible...

Show the IRS you made next to nothing........

Find the best accountant you can afford.......

For book keeping, payroll, banking, billing...I would suggest Quickbooks.

Back-up your files on a thumb drive and take it over quarterly to your account......

Magicmantx · **^ Top** #8 09.18.2009

Agree with Patriot... Incorporate . All liabilities become the responsibility of the corporation. You are also able to deduct alot more expenses if you play the game right. Your goal will be to write off as much as possible of all recipts. I always recommend to find a good CPA . Ask around, if you have a good relationship with your bank ask the bank manager who they recommend for your type of business. Meet up with a few . DON'T be shy ask alot of questions up front now. A good CPA will basically pay for themselves with what they save you. Keep doing exactly what you have started here ...ask. Read everything you can find. Figuring out what is good advice and what is garbage will soon be clear. Good Luck

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