Corporation vs LLC

Listen to your accountant.

LLC to start. Leave the taxation alone until you get up around $70,000 per year, then your accountant will probably advise you to file the form and become taxed as an S Corp.

 

Sole proprietorship and an llc are two separate entities.

Per diem is still a tax expense if you are itemizing the return.

The llc DOES NOT provide asset protection when you are a single truck owner or a low numbered fleet owner. It's purpose is to limit liabilities within certain segments but trucking is not one of them.

You are an owner and operator which negates any protection because you are on both sides of the fence, management and operations and that means your liabilities are such that your decisions are a contributing factor in an accident from both the management and the operations of that truck.

You have an accident in my state with me involved, your state laws do not apply and my state's laws can remove all protections.

To the OP, you got the answer you need, not the one you want.

 

I am not a trucker, but I DO setup and BOC-3 work, to get truckers into the o/o position. Most don't have an accountant but, you should ask any accountant what the legal structure of a LLC is and its benefits, same thing with a CORPORATION. What I am finding with my clients, is that in the beginning the LLC which is a tax structure works best for a single LLC. Then once the business is established, by this time you have an accountant, check with him/her because NOW he has a complete picture of your finances and can advise you on YOUR numbers.
Just my thoughts, I love reading this board. Thanks for the information you provide me. Sandra

 

Like I said earlier, I am not a truck driver, I own a business, but the information that I provide my clients is relevant to the success of both my clients and my business. So this with that said, I gotta check out this information. Thanks

 

This is false. I do it every year.

 

The TCJA (i.e. the Trump Tax Law) substantively changes how per diems are handled, and in most cases they're eliminated. While Publication 463 hasn't been updated for 2018 with the newest guidance, truckers were mostly spared under the text of the new law in this sense. You can still claim it if you're a 1099 O/O, but not a W2 employee.

You will want to review your situation with an accountant in any case before the tax year ends.

 

another thing to consider is record-keeping requirements of LLC vs Corp. Corp must have annual meetings minutes and you must be paid a salary and that needs to be a realistic amount, not some token amount like $50 per week. Also doing that makes you an employee of the corporation and now you are paid a salary and you have to file the state and federal employee taxes as you would for any other employee. I realize most people end up not doing this, and that can complicate your life once the appropriator "authorities" catch up with what you are doing. Also not meeting each and every corporate requirement, as is commonly stated "pierces the veil of protection" offered by the corporation. So in a lawsuit however unlikely it may be, the opposing attorney(s) will go through your records to find any item you cannot prove was done properly and on time, and if you are missing anything you are now on your own as an individual. LLC does not have most of those requirements and is much simpler to make changes as you go along. If you want to get into more of a corporate structure with your LLC you need to be a multi-member LLC which DOES have the ability to be treated and taxed differently than a single member LLC which the IRS views as a pass through entity. Multi member LLC is never a pass through entity and is always a legal entity of it's own. You can do this and still be the only PERSON that is a member, by creating a trust such as The Billy Bigrigger Trust and then you (Billy Bigrigger) and The Billy Bigrigger Trust are the two members of the LLC ... The trust may only be 1% owner but it has its own tax number and will file it's own tax return as such. There is a whole lot that can be done with an LLC and it is much more flexible than a corporation. Unfortunately a large number of accountants are not familiar with much of this, they stick with the simple stuff that applies to 99% of people.

In my case my trust owns a part of my trucking LLC, as part of my real estate LLC it also owns rental properties, and as part of my futures and stock trading LLC it allows me to trade as a company and not an individual which completely changes the tax reporting on these activities and can save thousands, even tens of thousands in taxes. A trust also allows all assets to pass on to the benefactor(s), known as Succesor Trustee(s), of the trust tax free when that day comes. These items bypass probate and all such legal entanglements, as ownership just changes from the original Trustee to successor Trustee or Trustees, who can then designate their own successor Trustees.

All of this may sound complicated yet it is quite simple to do.

 

I learned a lot about what you've said by doing my own research. The correct info is on the net an it's there for anyone that wants to take the time to do the research.

Besides a lot of accountants not knowing some of this, a lot of the others don't want to mess with the extra "hassles" involved so they tell you there's not much benefit.

A family trust is a really good thing to have from what little I've learned about it so far. I'm still learning so I haven't taken advantage of it yet. My wife and I are the members of our LLC but since we are husband and wife is really treated like a single member LLC unless applying for a loan or signing on with a company.

 

I am at default now. Sole Prop. So is s-corp way to go for one man show?