Best State for Owner Operator Trucking LLC

I got my LLC in nov. and let me tell you, its a ##### in CT to get a truck on the road if you dont have money coming out of your #####. Tax this, tax that, reg, sales tax, IRP, DOT, IFTA, Business entity tax, Insurance, ITS freakin nuts.

 

Am I alright with as a O/O with two trucks, pickup & T300 Kenworth, Fl address, both trucks titled in Fl, pickup-Fl plates, Kenworth-Indiana apportioned plates. Filing taxes in Fl. No state income tax.

 

I'm only taking in about $2k per week, after all truck expenses are taken care of.
I already have an accountant; I think she's a CPA.
I was thinkin about a fixed salary at about $40k, plus IRA and health insurance for my wife and I.

I'm thinkin she may be trying to keep me out of the 1%er and 5%er brackets.

 

How about starting a sole p in Cali or would a llc be a better option? Or would I be better off moving to Nevada?

 

If you are actually moving then YES Nevada is much easier. No BIT, less taxation, less government.
For those of you saying you need to LLC or Inc. to "protect" yourself, the only way you could be sued personally is for CRIMINAL incidents not civil. So an accident that you cause while drunk is very different than a simple accident. If you put a driver in the truck just follow the law (pre-employment screening, drug/alcohol random testing etc) then you are not liable if he does commit a criminal act.
Being protected from financial repercussions is impossible because most start up loans are personal guarantees anyway.

 

ok and between nevada and new mexico, which would you guys choose?

 

In Nevada probably

I heard SD, WY, NV, FL is ok but not sure, I'm trying to find out if that's good information.

 

That is pretty much all true. I am formed as an LLC with a S corp tax structure. I pay myself $750 a week salary (the average weekly income for truck drivers in my state per the U.S. Dept of Labor), and, sure, I have to pay both income tax and SSI on that, but the profit my little one truck company makes above that is only subject to income tax and not SSI. As of today, 9/15/16, my net profit this year, even after the $750 a week payroll, is $55K. Since I don't have to pay SSI on that, right now, as of today this year, I have saved $8400 in taxes. And my CPA, who files all my monthly payroll taxes for me, charges me $75 a quarter to do it. And when she does my yearly returns, they are done for about $200 total, both personal and company returns. Total cost to do all my taxes and filings for the year.... $500. It cost me all of $150 to set the whole thing up as an LLC with S Corp tax structure. My CPA did it for me. Got the papers from the IRS that I am recognized as an S Corp for tax purposes.

So is it worth it to do LLC with S Corp tax structure? For me is definitely is. Everyone else will have to work the numbers and see if it would work for them. It can be the best of both worlds... the low regulatory requirements of an LLC (no requirement for monthly board meetings and such) along with the tax advantages of an S Corp. Here is a good article that explains it.....

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

I think too many folks get all hung up on the wording "Limited Liability Corporation" or LLC. These kinds of things are set up primarily for financial liability reasons and tax structuring. It has almost nothing to do with liability for other stuff like accidents and such. You screw up out here on the road, and some attorney is going to come after everything you own and more. No LLC, S Corp, or C Corp is going to protect you from that. Ask the guys who headed up Enron. Or Exxon/Mobil when that tanker cracked up off the coast of Alaska.

And the best state to set one of these up? A state with a very low or no income tax! But since the bulk of what you are going to pay in taxes is to the Feds, where you set up things may not be all that important.

 

How's the business going? I'm in CT and am considering getting a truck sometime this year

 

Thank you for your very instructive and clear reply! I certainly appreciate that! I'd also appreciate A LOT if you share your CPA contacts. You may PM if you wish. I'd be happy to be his/her client. Thank you!