Corporation vs LLC

You offer concrete info in this thread. You sound credible too. I hope you stick around longer on TR forum.

 

If it turns out to be advantageous to your situation, you need to file the S-Corp election as soon as possible. The official deadline is 2 months and 15 days after the start of your tax year (usually the calendar year, so March 15), but you can see the section for filing relief--they usually let you do it. You also need to get on payroll and file the requisite forms so you get yourself a W-2.

S-Corps file on an 1120-S, as an entity. There's also the usual payroll forms for payroll tax (940, 941, etc.) and the relevant state forms for unemployment, etc. Usually a payroll company can handle all these for you for around $5/month.

You still file a 1040, but instead of these things flowing through to a Schedule C, you get a K-1 which goes on a Schedule E. (Either way, it's still just plugging in numbers into a website if you do your own taxes.)

Depending on your particular situation, the added hassle, time cost and other things of the paperwork may not end up saving you much money in the end. You could ask your accountant to model it out for you.

More details:

S Corporations | Internal Revenue Service

 

OK. I see.

As for the other part, the IRS does not have a ATG for trucking, they do however seem to have some policy driven guidelines that put us in a different class as other industries. FLSA also has us in an "exempt" form of employment which puts us in a unique position.

 

This is not a good idea. Always keep business separate from personal.

 

This is exactly the way you're supposed to do it.

Usually, online checking/savings accounts have the highest interest rates. It doesn't matter where you sweep your tax payments to, as long as you have a single dedicated business savings account. I personally recommend CapitalOne 360 bank because you can almost instantly create separate accounts for various purposes. See: Best Online Savings Accounts and Rates of 2018 | Bankrate.com

NEVER EVER EVER EVER MIX PERSONAL AND BUSINESS FUNDS. This is one of the fastest ways to trigger an audit, it will drive your accountant and bookeeper crazy, can disqualify you from an S-corp election, renders the liability protection from an LLC useless in most cases and makes almost every other kind of leasing or borrowing application more difficult.

While it's always better to try to keep your accounts inside one institution, it really doesn't matter where your accounts are since you can easily ACH transfer from one to another. But always keep separate accounts for business and personal matters. Always.

 

Trucking has one of the most incredibly straightforward and well-documented revenue cycles there are in business. I can take a 10 lbs of beef and turn it into 80 $2 Hamburgers or 20 $50 steaks. With 100 gallons of diesel, you're not going to magically go 2,000 miles one day. There's really comparatively very little wiggle room to cheat the tax man in trucking, though people try--and those people usually stick out just on the numbers on their return.

Ah yes, the "Motor Carrier Exemption". That being said, it's an overtime exemption, not a minimum wage exemption. And even at that, a FT driver with a lot of experience has to have a really long string of bad luck to earn less than $30,000. I'd still put an O/O around $40,000 in an S-Corp and probably more to take advantage of the bonus exemption.

 

Thanks, @TallJoe! So far this has been a great resource for helping me get my CLP and maximize my time in school! More than happy to help pay that help forward.

 

@NYNNick ,Pretty good job at laying it out.

Everyone else remember LLC a state's statue, not the Fed's. And they vary wildly between states.

Don't get caught up in LLC vs S-Corp. You should be so lucky to pay too much in taxes your first 5 years. All too often I read posts about what software to buy from someone who hasn't purchased a truck yet. We went 15 years without a computer. Then we went another 4 or 5 without software aside from Lotus123. (Google it, it's not a car).

You're not going to be perfect, you'll never be perfect. Make some money, keep good records either on paper or excel and have an accountant prepare statements regularly.