Getting a LLC

Huh? ANYONE subject to the HOS gets to claim per diem for any days they are away from home...doesn't matter if you're company or owner, if you drive a truck and are away from home, you get to claim it.

Many companies have "per diem" as part of their pay package...which is nothing more than fronting you the deduction you'd claim anyway. You STILL need to figure that per diem pay as well as what the per diem deduction would have been, because if they paid you more in per diem than you are entitled to deduct, you owe income taxes on that extra amount...but if the didn't pay enough per diem to cover the deduction you're entitled to claim, then you deduct the difference.

 

Again, sorry to Kevo for using his thread.
Ok, so more info may help explain my situation.
I'm 45, single, no house or payments of anything associated with one, i.e. utility, gas, cable, etc.
No car or truck payments.
I have well over the 40 consecutive quarters needed for SS.
My kids are grown and have started families of their own.
My credit is good with a great driving record.
I'm in the process of buying a truck and going back out OTR. Its a 98 w900.
Just wanted to know if its better as LLC or C corp for initial growth and tax savings for company. As I stated earlier, and its not to brag only to show, I don't need a big salary.
My concern is, I want to put more into company pocket than mine right now as I have an older truck and it will look better should I expand in the future. The truck has had an inframe and brakes but other things will happen. Once I reach a substantial amount in company acct I can give either a bonus of some kind or raise in wages.

That's where im at now with my thinking about this business. I understand no entity will give you asset/ liability protection because driver and owner are the one and same and will treated as such in a court.

Again, thanks for all input and advice.

 

Not quite true on taxation and business structure. One can form an LLC as a sole owner, and file that it have a S Corp tax structure. The best of both worlds. Low regulatory requirements of the LLC, and the tax advantages of the S Corp. Mine is set up this way. I am a W-2 employee of my business, even though I am also the owner. My W-2 payroll is filed monthly and is subject to income tax and SSI. The money the business makes above all expenses and payroll, it a distribution to me as the owner, and only subject to income tax. No SSI tax on that.

My payroll portion reflects the mean annual income of heavy truck drivers in my area of the country as per the U.S. Dept of Labor. So I am not playing fast and loose with the numbers to the extreme.

One does not need to do full C or S corp business structure to get the benefits of corporate tax structure. Depends on how one is doing as to whether it is worth it, but I am saving thousands in taxes each year. $150 to set it all up, and my CPA files all monthly payroll stuff for me. Two tax returns at the end of the year, but total CPA costs for me is around $500-$600 per year. For almost every dollar I pay for my CPA doing all of this, I save probably $6-$7 in taxes.

This article sums it up quite nicely......

http://www.bizfilings.com/toolkit/news/tax-info/llc-plus-scorp-equal-best-of-both.aspx

 

Thanks for jogging my memory...been so long since I set up my LLC that I forgot all about that extra form you get to file that first year declaring how you want to figure your taxes. I was already operating as a sole prop, so it was easier for me to just maintain that status going forward rather than change the way I had been keeping track of things.

 

If Trump's new tax purposal of capping corporate tax to 15% pass, then incorporating would be very beneficial if you make a lot of money.

When i bought my first truck in 2005, i fell for the crap about corporation for tax savings and asset protection. I had a Nevada S-corporation and qualified it to CA where i lived. I spent thousands in setting it up and upkeep of my corporation. Two years later, i closed it down and payed more taxes due to transfering the truck to my name. Upkeep for a S-Corp was expensive. Thousands of dollars went out for nothing on filing fees. Bottom line is that a single truck owner operator doesnt make enough to benefit from the supposed tax savings from corporations. I consistently gross over 250k per year without my corporation and didnt pay much tax due to deductions that are already entitled to me as self employ with a 1099.

Usually, the 250k or more drops down to 40-60k of taxible income for me after business expense and deduction. Been doing this for over 10 years and never had tax audits or issues.

 

And that is why doing a full blown corp is not the best way to go. But all of that is avoided via LLC with a S Corp tax structure. The best parts of being just 1099 sole proprietor and the benefits of a corp. And total cost to set mine up was $150 one time fee. As opposed to getting hit for self employment tax (SSI and Medicare) on all income is avoided. Only on payroll to myself. Income above payroll from distribution of business profits is just income tax at the same personal rate with no self employment tax.

As sole proprietor, and my net each of the last 3 years hovering around $80K, SSI on that is around $12,240. By only paying SSI on payroll of $41K to me, that is around $6273. For a savings of almost $6k in taxes.

 

It all depends on your actual situation, the numbers matter. SO my advice is to get with an accountant and go over projections of what you could make, spell it out for him/her in detail with your personal goals and needs in the mix, let them show you the differences based on your actual situation.

 

I'm definitely getting with one but I also wanted the views of people actually out here doing it which is where you guys come in. Im usually a very conservative person as far as numbers go and has served me well in the past. Thanks again

 

Sole proprietary is best for one man setup. Later if you hire someone you can always incorporate.