Finally got my own truck

Discussion in 'Ask An Owner Operator' started by BoyWander, Jan 1, 2017.

  1. MysticHZ

    MysticHZ Road Train Member

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    ... I thought you were on a lease from Loan Mountain?
     
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  3. BoyWander

    BoyWander Road Train Member

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    I am. But it's not a typical lease. It's not a rent lease. They don't rent trucks out. It's a capital lease. I owe the full price on it and can't give it back. There is no interest. They buy it, mark it up, and sell it, and divide the price by x months after a down payment. So I can't deduct the payments directly.
     
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  4. CaptainDaveG

    CaptainDaveG Road Train Member

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    BoyWonder,
    Great Job. Keep on CPA it only takes a day to get EIN. You are also going to want to title that truck in your company name. Lone Mountain should understand I'm sure there is a fee for that.

    You have to get out here it's high dollar....


    Be Safe Out There

    Captain Dave
     
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  5. Coronado1785$

    Coronado1785$ Light Load Member

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  6. Coronado1785$

    Coronado1785$ Light Load Member

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    Question. If you get a LLC and lease the truck to your LLc . Would that qualify as a lease allowing you to deduct payments for the duration of the note.
     
  7. nax

    nax Road Train Member

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    You dont "need" her to do it....5 mins of your time and VIOLA!!....IRS issues you a new EIN.
     
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  8. nax

    nax Road Train Member

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    If truck is owned by BOYWANDER LLC, then @BoyWander can lease it out to WONDERMOVE TRANSPORTATION, INC.

    Then WMT, Inc, can deduct lease payments, but those would be reflected as revenue to BW LLC, and then taxed accordingly.

    His CPA better be good at shell-game companies, and maybe register BW LLC as an offshore company...hahaha
     
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  9. BoyWander

    BoyWander Road Train Member

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    The articles of incorporation have to be filed and approved by the state of MI. And I'll get my EIN. I have an EIN with my sole proprietorship, but apparently I'll get a new one with the corporation, and I need that to open up a new bank account, which I have to have for the corporation.

    Also, i.could have WonderMove DBA rent the truck out to WonderMove Transportation Inc for 8 days and I wouldn't need an ELog. And then I'd rent it out for another 8 days. And so on and so on. If you want to talk about shell games. ;)

    Speaking of leasing, I'm starting to get curious about the possibility of a full service lease. For my next truck. I'd want to be able to lease a new truck for 2 years, have all maintenance and repair included, insurance included, not have to shell out a dime for anything, run it as a team, and then give it back after 2 years and then get a new one. I wonder what the cost for something like that would be. I imagine I'd be willing to pay a bunch for that.

    If say I bought a new truck outright from a dealership for $150,000, ran up 500,000 miles on it in 2 years, sold it for $50,000?, would cost me $60,000 per year including my non trucking ins and PMs. That's about what it costs to run a truck as a team btw. I'd rather have to not sell it, and be able to just turn it in. And deduct the lease payments. And not be stuck under it for 5 years and I'd always have a good truck to hire a team with.

    Ryder doesn't advertise these kinds of rates, I'm sure it all varies quite a bit depending on the situation.
     
    Last edited: Jan 7, 2018
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  10. Liquidforce

    Liquidforce Light Load Member

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    Exactly what I have done. My offshore company owns the truck, and will lease it to the US entity to operate on a non maintained lease, at a reasonable market rate (not a perform rental as this appears as an obvious sham) This is to offer an additional level of protection in the off chance something goes arwy... If you choose to go this path make sure you select a country that has a double taxation treaty with the US.
     
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  11. BoyWander

    BoyWander Road Train Member

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    Update. Important Per Diem info below.

    Well I'm now the President and CEO (and all other applicable officers) of WonderMove Transportation, Inc.

    Got my new bank accounts. Had to loan my corporation money which CPA says I can do, and get reimbursed tax free. Also emailed cresco capital, the lone mountain people, and going to have them start taking payments out of the corporation account. But I'm still liable for the truck personally. They're not going to let me hide behind a corporation and not pay the truck payments.

    Also talked.to my CPA about Per Diem. Might want to read this closely.

    Apparently the new tax.code says no more itemized deductions. Therefore, you, as a W-2 employee, cannot deduct 80% of $63 every day you're on the road. If you're a sole proprietor, you can, because it's a business expense.

    Since I'll be paying myself and a driver as an employee, what my CPA suggested is, and this is legal, to take away some salary and add per diem reimbursement. So instead of paying an employee $1300/week, for example, I'd pay $1000/week and then reimburse $50 every day the driver is out on the road. This reimbursement would then be tax free for the employee as well as the employer. Don't have to pay payroll taxes on that. So the corporation would be saving 7.65% of around $13,000 of payroll per employee. And the employee.would be saving the 7.65% on $50/day plus probably income taxes as well. And on top of that, the employees still get to take their $12,000 standard deduction for 2018. The corporation just has to have proof of that and the ELogs are easy to do that with. CPA said doing the reimbursement every 4 weeks would work, just can't be more than 45 days.

    So if my driver and I spent 250 days on the road, the corporation would save 7.65% of $25,000. That's nearly $2,000 in payroll taxes. Plus the employees would save their half, nearly $1,000 each in taxes plus (I think) income taxes on the $12,500 and PLUS take the $12,000 standard deduction. This is how my CPA explained it.

    So if you're driving for someone on a W-2, you need to have your employer designate some of your pay to per diem reimbursement. Because if you don't, you'll be losing your per diem.


    EDIT: I just thought of this as well - since the reimbursement isn't counted as employee wages, I also don't think that amount counts towards workers comp. Because workers comp is based on employee wages. So that's basically another 5.5% that I'll save on that $13,000 (or whatever $50/day times x amount of days on the road). So that's another $1,400 I'll save. And as an S Corp, I don't have to pay payroll taxes on the leftover profit after all expenses and wages. It flows through to me, but I'd only pay income tax on that amount, not the 15.3%. If I chose to distribute extra funds from the corp to myself. So this really does make sense as far as taxes go. In case anyone was wondering about it.
     
    Last edited: Jan 8, 2018
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