Owner Operator discussion

you can get an EIN anytime you want. It takes about 5 minutes online. As a sole proprieter without employees I really haven't found much use for mine yet, but I guess it lets me fill in one more blank on bank forms and sech ??

 

I have a question I'd like to tack on here rather than start a new thread if anyone would care to answer.

As I said, my business is a sole proprieter owner/op with my own authority. I wasn't too concerned with establishing a corporation because I know the first few years I'm mostly going to be investing most all income back into the company and not showing much profit. When would the right time be to consider forming a corporation ? I mean I guess I'm not too interested in it unless it is going to save me a substantial amount on taxes or if I get to the point when I have several trucks or something worth worrying about the liability. Is this the right thinking or am I missing something ?

 

as a sole proprietor? When ever you feel you really want to waste the money.

My last company I had, I went S-corp immediately. I also had employees right away too though.

This time around, I will likely go LLC only filing Sole-proprietor for tax purposes.

The LLC will have an EIN and that is what the taxes will be filed to as well as the DOT number for federal and state. It's that layer of separation from my personal SSN that I am looking for.

 

What is the purpose of this? You can get a separate EIN without the LLC and I believe to get an MC # you have to have one.

Just curious why. Seems an expense with zero benefit.

 

I'm not sure I understand. Are you saying it would be a waste of money for me to form a corp, or it's wasting money not too ?

 

https://www.us-tax-id-number.com/?gclid=CNDZp8THgLACFQ8CQAodTWd9Nw

You are correct. You can get an EIN as a sole-proprietor. Thought you had to have a registered business to get one.

It would not be to your benefit as an O/O to form a corporation. IMO.

Sit down with an Accountant or Attorney to get a better answer though.

Knowing now that I can get an EIN as a sole-proprietor, I will likely be going that route.

 

Okay. So is it safe to say I would not be too interested in forming a corporation or LLC unless I am showing a large taxable profit ? Or is it more a matter of having employees ?

I guess I was wrong to say if I had a number of trucks. Obviously, those trucks would be property of corp if I went that route. The liability would only be a concern if I had a substantial amount of personal wealth to protect, correct ? Luckily, I need not be concerned about that right now !

 

as I recall. Mind you this is 10 year old memory...

Corporations are rather easy to punch through the veil of protection that a 3rd year law student can do it.

The protection comes in when you have more than one operating principal who is managing/running the business.

There is a somewhat protected level of "tax" liability if you keep the money in the corporation as operating funds. But you either have to show an expense for it at the end of the year or file it on a Schedule S for a corporation or a Schedule SE for a sole-proprietor.

Some will bring up the "double taxation" of how you pay a corporate tax and a personal tax. To a "degree" that's true as you will have dividends that you'd have to pay on as a receiver, but they would not be subject to income tax per se.

It's a rather convoluted mess and needs a CPA to really explain this stuff to you.

My knowledge comes from 2001-2005 when I was self-employed. Lot has changed since then.

 

It can go either way. Any "profit" (that is, more in the bank, than you started out with 1/1) goes over to your personal tax liability anyway.

The benefit of the corp/sub-s - is shielding your PERSONAL ASSETS from liability.

Truck in a corp name - run over a mini-van full of rug-rats - corp is on the hook.

Sole/P - you, your house, your car, everything YOU own is on the hook.

I have a sub-s for my IT consulting business (that I'll likely run the trucking business under also), it has NO assets - and really, computer consulting is a low risk business. But if someone were to sue me (like I screwed their computer up and lost their data) - there's NOTHING TO TAKE, and they can't touch car, motorcycle, home or personal property. Same if I did trucking under my corp - they can sue me and take the truck or anything in the business's name - but my liability ends there.

I am NOT an accountant or business attorney - and unless someone HERE claims to be - I suggest you "invest" in a consult with one or both of those professionals - and by the way - when I pay for an attorney or my accountant - it comes out of my CORP as an EXPENSE, and I WRITE IT OFF...

Just saying...

Rick