Converting to S Corp ???????

Bookkeepers and accountants always say go s corp because it makes their job easier whether it does anything for you or not.

 

S Corp or LLC doesn't really give any liability protection to a 1 truck owner operator. You are the driver.

 

I would get a second opinion or research it yourself before making the switch. Most accountants I've discussed it with suggest LLC over S Corp for a one man operation. Much more simple and cheaper for you.

 

The only two situations a S Corp makes sense is if you have employees and can pass income through to your personal tax return that is not subject to the social security and medicare tax and not subject to the IRS recharacterizing the pass through as salary. The other situation is if you are a sole owner with no employees and have trouble making your quarterly estimated tax payments. You can take a monthly salary check to pay in your federal and state withholding along with the social security and medicare tax. This salary check should typically be close to 100% of your net income for the month factoring in the corporation 50% match of the social security and medicare tax.

I have a regular accounting and tax practice and a tax resolution business and I have several tax resolution clients currently in big messes with the IRS for not taking reasonable salary as a sole owner S Corp without any employees. The IRS is even going after tax preparers for filing what the IRS calls a negligent tax return based on the above circumstances. I tell my clients in this situation that you can pay the IRS now or you can pay the IRS and myself a LOT more money down the road!!

When the IRS comes back online with the collection division once the pandemic passes, they will be going after the low hanging fruit - S Corp no reasonable salary - when trying to pay for the trillions of dollars of stimulus. All the IRS has to do is look at line 7 (Compensation of Officers), line 8 (Salaries & Wages), and line 21 (Ordinary Business Income) of the 1120-S tax return to determine the cash cows!

My tax resolution business is organized as an LLC, I currently have no employees and do not have a problem paying my quarterly estimated tax payments, so I just report my income and expenses on my Schedule C.

 

They say that because you have to pay for a second tax return!

 

That's exactly how my CPA explained it to me and why I work under an LLC instead of a "S" Corp.

 

Don't think the OP was asking about an S-Corp VS LLC, he was asking about changing the name on his authority.

 

Anyone done this and know what steps to take with the FMCSA?
Thanks

 

I’m an LLC taxes as an S Corp. It helps with double taxation but I agree you need to do it legitimately or you’ll be low hanging fruit for the IRS. Pay yourself on payroll a reasonable wage. Then the rest through distributions.

As for changing the name, just call the FMCSA and get the needed form to hange it and make sure your insurance is changed to match. A couple calls is a lot quicker then asking strangers on an Internet forum.