Do you need to incorperate

Why do you ask that question?

 

Many people think incorporating will protect their personal assets in a lawsuit . It won't . If an O/O is negligent (violating HOS , driving defective equipment , speeding , etc) he can be sued personally along with the corp . What incorporating or forming an LLC will do is keep your personal property from being considered as assets if the company goes bankrupt .

 

An Owner Operator , owning his own truck has nothing to do with a Trucking Company .

That's why my question toThe Bully was, why he asked that question. There is no involvement concerned with a Trucking company, as an Owner Operator. So therefore, there is no need to incorporate. It's two seperate entities. That's what "Insurance" is for.

If you are a "driver" working for the company and they lease you a truck, and they go bankrupted, you lose out. Though you can't incorporate while being "leased" with a trucking company with their truck. But there's other ways around it.

You need to be a little more specific in what you're asking.

 

Let's put it this way,, "I've never heard of an O/O Incorporating for the Sake of Leasing to a Trucking Company".

To make this plain and simple for you to understand,, the reason is, the trucking company "Owes You Money."

A Small Business will Incorporate for the sake of
"Owing Someone " money and can't pay it.
It protects losing their personal items, thats not related to the business.

If something happens to that business, like for an example, the business is folding under and they can't fulfill paying out that money, another business can sue them for their personal belongings.

The trucking company is paying you money. So there is no need to "Incorporate."

 

I incorporated my truck in 1999. I owned the truck and was leased to a truck company.

The reason I incorporated into a standard C Corporation was to establish retirement plans at 25% of my income. It also allowed me to pay my wife for the work she did for the company.

Do not assume that you know the reasons for another person.

 

Now why in the world would you want to file as a Corporation, when you can still pay your wife for doing the business and can also set up a 401 Savings plan , without the added expenses and taxes as a Corporation? For the money you put out in being a corporation, you can add that to your individual savings plan.

Here is a Link:
Tax Aspects of Corporations


Businesses that are engaged in operations that are considered "risky" or subject to frequent lawsuits are often encouraged by their legal advisors to incorporate. Moreover, the corporate structure can make it much easier to obtain investment capital and to pass the business down to the owner's children or other successors upon death or retirement.




From a tax perspective, there are two options for corporations under federal income tax law:

• C corporations are what we normally consider "regular" corporations and are subject to the corporate income tax.
• S corporations are corporations that have filed a special election with the IRS. They are not subject to corporate income tax but are treated as similar (but not identical) to partnerships for tax purposes.

There are a number of nontax factors that may influence your decision as to whether a corporation is the right form of business for you, and we recommend that you seek expert legal advice in setting up a corporation and writing up the articles of incorporation.

http://taxguide.completetax.com/text/Q10_2023.asp

In My Opinion,, Corporations are only good for people who have a lot of Expensive Assets they want to Protect., for the sake of "Being Sued."

People who advertise to get everyone to Incorporate are just looking for money in their own pockets.!
It's NOT Necessary for the One Truck Owner and net profits are under 100,000.
That's My Opinion.

You are so right RickG, that one can get sued personally too. Doesn't matter if you're incorporated or not, as long as someone who is suing you, has your personal name and address.

 

All right . Suppose an O/O buys a truck , can't make the payments and the truck is repo'ed . He still owes $10,000 after the truck is auctioned off . If he was not incorporated his creditors can go after his assets . If he was incorporated with the truck owned by the corporation the corporation can go bankrupt and that's it .

 

Easy to explain.

My tax background is greater than most. I have been preparing tax returns since 1982. Corporations, Sub S Corporations, Partnerships, Non Profits, LLC's etc.

The tax paid by the corporation when the profits are limited to 50,000 are only at the 15% bracket.

As far as the pension, why not let the business pay the contribution which results in a tax free benefit to me. The use of the corporate money to fund it and I pay no tax. It also provided me health insurance and other tax benefit plans.

I used my background in accounting and income tax to provide these write offs. I do not suggest that a normal person would be of similar mind and ability.

 

You're absolutely correct on that RoadMedic. Most Truck Drivers are lost when it comes to Taxes. Since you know much about it, you know the ropes of what to do and what not to do.
As far as pension,, a sole proprietor can file a schedule C which they can also deduct for their insurance and so forth. You still don't pay any tax on it. So how does that differ from filing for the Corporation?
How does the Corporation fund the money?
You still have to work for the same amount of money,to invest into the corporation. Clue me in.

RickG-. I have never met ONE person in 30 years that had their truck Repo'd and lost their Personal Assets over it. They can take the truck but can only sue for the balance. Yet , I never met or heard anyone being sued for the balanced owed. It is so difficult beyond that, that people won't even go that far.
If you never had something repossed,then you wouldn't know. There are Laws to protect People of Losing their Assets., even when filing Bankruptcy. You are allowed certain amounts , to retain your assests.

The same as for an example,,, Sears sells you a Great Big Tractor for several thousand of dollars. You're behind four months and they come take the tractor... They do not take your personal assests nor force you to sell for the balance owed. The same goes with credit card companies. The balanced owed is reported to the Credit companies., that goes on your record. Talk to a Lawyer. Property Rights.