can I pay myself a monthly salary to offset quarterly taxes

If you are a sole proprietor then you do not have a “company”, you are a sole proprietor. It is one or the other, not both. It sounds like “Peoples Products” is just a DBA (Doing Business As) filing for your sole proprietorship.

If the above is correct then you’re and the “companies” incomes are the same thing to the IRS. It’s all on one tax return so it really doesn’t matter how you shuffle the finances around internally.

When you create a company you have a separate taxable entity to shuffle finances between. That is not the case with a sole proprietorship.

 

If I am reading you correctly then no, you would still have to pay taxes. Whether you are a sole proprietor or LLC the taxable income is still going to work out the same. One thing you could do to lower your tax liability is to set up a Roth IRA or potentially a 401K program - with many of these you would not pay taxes on that income now but later when you start taking distributions. The idea being you would be in a lower tax bracket in retirement then you are now.

 

As a sole proprietor you pay self employment taxes on any net income earned by the company, whether it is paid as a salary or not. If you are a corporation, LLC., etc., you can pay yourself a salary and any net proceeds can be paid as dividends rather than wages. That would save you self employment taxes when part of the money is paid as dividends. You pay income taxes either way. You can pay money along which would reduce the amount you may owe at the end of the year. I have a friend in this business who still operates operates as a sole proprietorship. He pays some taxes quarterly and then settles up with the feds at the end of the year.

 

Here is my advice, go find a good accountant who can answer this question for you because when you step into these ideas, the tax man can burn you if you are not setup right or have the right advisor. There is a lot to take into consideration when you are talking about 10k a month.

I would consider a corporation for this but that's me and my situation - you are without a doubt in a different situation.

 

Go to legal zoom. Com and set up an llc, prefferable a farm name so u can deduct about every thing u can , everything .!!!! All home expenses around the house painting maintain. N so on

 

Ditto on what has already been said.

Get an LLC set up, you can do all the paperwork on line in most states I believe. It's pretty cheep $50.00 bucks give or take a dollar. The small business department of Chase Bank was a great help to me. Then you can start paying yourself from the company as well as create tax shelters or deductions for you and the company. Investments, retirement plans, Heath Insurance etc. The list is endless. But before you get to far find a good tax guy/gal who you can talk to, not one of these big companies. Someone who knows trucking, very important. Good luck.

 

Each state has a different filing fee. My state charges $100 to set up a corporation or LLC. I believe you live in Texas and if you want to incorporate in your state, you need to go to your secretary of state section of your state's website. All the filing fees should be listed on their website. All requirements should be listed on the website. If you feel better using a lawyer, you will need to pay their fee in addition to the filing fee.

 

Just gp. If you have a 10k profit each month after expenses, you have to pay taxes on that amount, its how your entity
Is set up to determine how much.
Setting up as an llc with incorparation papers will save you on self employment taxes, as you will only pay both sides of the social security tax on the 3k salary, just as a company driver recieves his check.
The 3k plus taxes paid is then expensed just as fuel, repairs etc, so your company net profit will be 7k.
At the end of the year you will have already paid fed and state taxes through salary, on 36k
The 7k x 12 months is then passed to your 1040 personal form and you are responsible for the taxes on it.

In summary self employed at 120k =120x15.3x.925=16983
Llc = 30k x 15.3×.925=4245.
You will save about 12738 a year as an llc.but will lose about an 8k a year fed tax one half ss tax deduction.
As a whole it will save you about 9k a year.

Big question is your per diem.
Can you take it in the oil fields.