Asking for your thoughts and guidance....

I'm not a tax expert but I always figured any tax savings would be negligible for a 1 truck guy incorporating that's why I say keep it simple as a sole proprietor.

 

Unless you are losing money, or making so little, you cant pay yourself only $35,000 and not have another $20,000 left in profit? If you do, you save at least $3,060.00 in taxes. Why wouldn't the first thing you do is to create a corporate entity?

 

You still have to pay taxes on that twenty grand in profit. Just at a slightly lower rate. The magic number is much higher, if memory serves me correctly it is up around 130k before the difference in taxes becomes big enough to be worth the extra accounting cost.

 

You do not avoid the self employment tax. You pay the exact same tax rate as a corporation and employee. Employees split the fica tax with their employer. As a sole proprietor you pay the full amount. As an llc you pay half the amount twice, once on your individual tax returns and one on your company tax return. And your personal assets are not protected from corporate creditors. As the owner of the company they can come after ALL of your personal assets because you are the one in charge of the day to day operations. I think you are confusing a single owner llc with an llc partnership with one or more "silent" partners.

All thay being said, you do make a valid point about image. But an llc doesn't give a great professional company image. To ready to file for and ran not much more different than a mom and pop outfit. If you want to give the image of a big professional company, it needs to be a c corp. Anything else and every knows your still one guy and his wife and maybe a cousin or brother in law helping out in busy season.

 

You pay FICA only on wages, not income. By paying yourself $35,000 in wages, as opposed to having to pay self-employment tax on the entire $55,000 you pay $5,355 in FICA, both employee's and employer's share, vs $8,415 in self-employment tax. Which do you prefer?

 

It`s been a while since I`ve really looked into any of this stuff, but....but have any of you looked into a Delaware company, or Nevada company?

 

There is a problem that many small businesses have, and that is comunglung the money. If you use the corporate card to buy dinner instead of your personal card, it makes it easier to pierce the corporate veil.

The carrier where I was leased determined they would terminate the contract of any O/O that was not in a corporate structure. But in hindsight, it was probably an attempt to win a miss-classification lawsuit.

 

I'm assuming this is in case you wanna lease to a company...so what if,you want own authority and work wth brokers?
You still want you own plate but which is better truck on your own name or,on LLC name?

 

Doesn't matter in the vast majority of cases. It could be argued that a broker is going to be impressed by an llc for image reasons. But i highly doubt it, considering it's so easy to become an llc.