Successful OOs if you were starting out new, how would you do it?

My first year sucked for taxes because I was running as a sole proprietor.

Things got better and the accounting worked out better when I went LLC filing as an S corp. Paid the wife and myself each a monthly salary. With an occasional owner draw or reembersment. Worked out better for overall taxes and did nothing sleazy.

 

I spent way to many years paying way to much in taxes before I finally went to an S-corp. I really didn't want to just because sole proprietor was easy for me. My money was my money to do with what I wanted. Wasn't really that way with the Corp. Of course a year and a half after I incorporated I quit trucking..

 

you can’t even take per diem as a company driver anymore which is worth over 10k a year in write offs for most. As an owner op your car becomes a business car and is a write off. Your dog is a guard dog and is a write off.

heck, I know of real estate guys who go out and buy a G wagon because it’s over 6500 lbs and qualifies for the section 179 deduction in the first year.

and those guys writing off vacations may be perfectly valid write offs. Wanna go look at a truck to buy in Florida during the winter. That’s a business travel expense and perfectly legal.

not financial advice, but the tax system is intentionally mostly gray area rather than black and white because the rich hire cpa’s and lawyers to push the limits of the gray area to minimize their taxes legally.

we could have a simple flat tax with no exemptions, but they intentionally make it complex and full of gray areas.

 

I did the S corp thing for years and found it to be a bit needlessly complex if you’re not running really hard. You can put so much into retirement accounts that you can get your income tax super low without it. Still stuck with self employment tax, but if you’re itemizing correctly shouldn’t be bad unless you’re a hard runner all year and if you are then try taking a business trip to a warm sunny place for a bit. Lol

 

I've been thinking about this thread since it keeps popping up. Everyone's journey and situation is different but here are 3 things I think are very important.
1. Drive for someone else first. Get plenty of driving experience and some maintenance experience. Age and time are the only things that will get you here. Maturity, patience, etc. I would've been a disaster of an O/O before I was about 40. Too many other priorities in life distracting you from this kind of work when you are young. Just my opinion and experience.
2. Don't borrow money to get in. This means most people shouldn't do this. I cashed out one of my retirement plans from a previous job. I did finance a truck but it wasn't killing me like it does a lot of people who risk it all financially just to get started.
3. Plenty of people say know your costs before you start. This is impossible. Most of them you'll have to guess. Think about the things a lot of people don't. Is your home life really balanced enough for you to disappear indefinitely? Where are you going to park this truck/trailer? How close is a trustworthy mechanic?

 

Thank you for that, It echos/resonates with my thoughts.

Will drop another thread reply later to continue the discussion. Probably with the overreaching point: Being an owner operator is a business, a person needs to make good business decisions.

 

What's a good Carhaul company that "shares the wealth"?

 

Depends on where you live.

 

I started as an LLC and paid payroll and taxes like an S-Corp for the first year. Did my own taxes through TurboTax and quicken and used ADP and their outrageous fees for the first year.

Second year I switched to ATBS and just went as a 1099 employee of my company, and I made significantly more, but paid Gov't less, legally.

Right about 250K gross income and more than one employee is where the difference is, tax wise, also whether or not you need things like SS, ROTH Ira, Backdoor IRA, 401K's and childcare expenses, health, dental, etc.

I'm 52 and already paid max into SS until I start drawing credits. Gaming the tax advantage rules in place (whcih change all the time) is part of being an O/OP and running your own business.

 

I didn't want to edit my post, and some may call it wrong.

But that's the grey area of the tax code, and legitimate how you should run a business.

Because you can change from LLC to S-corp and back again changing your profit from %5 to %45, just by filing a piece of paper and changing your corporate structure. It's agrey area and everybody adjust's this game.

Don't hate the player, hate the game.