L.L.C. or Incorporated?

Discussion in 'Trucker Taxes and Truck Financing' started by istumped, Dec 2, 2019.

  1. Mirch

    Mirch Bobtail Member

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    I asked that question on Tax forum and here's the answer I've got.

    Is there a way to deduct per diem by paying it with the payroll? On the S-corp it will absorb the deduction because it will be paid thru reimbursing the employee. The per-diem allowance method can’t be used to substantiate business travel expenses incurred by a person who owns more than 10 percent of an S corporation. So, if that’s your situation, no dice. Instead, you must turn in proof of your actual travel expenses to the corporation. You can then receive tax-free reimbursements from the company.
     
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  3. Accidental Trucker

    Accidental Trucker Road Train Member

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    Ask the forum folks if they are talking about per diem, which is the term used for reimbursing employees NOT SUBJECT TO HOS, or for the “meals and incidental expenses” reimbursement for employees subject to HOS.
     
  4. johnnyman1099

    johnnyman1099 Medium Load Member

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    Why are you incorporating if you have one truck and plans to drive it yourself ?

    Every new Owner operator dreams about making over $100,000+ profits yearly. And if true, starting a corp or LLC would stream half of that income as business income which have lower taxes.

    My best profitable year gross me $285k with one truck. After deductions i made around $60k before taxes. LLC or corporation would not help me save much on taxes and instead an expense and liability for me.

    Every financial books and financial advisors always recommend starting a LLC or corporation for every business. This model does not fit the Owner operator trucker. Most owner operator can expect an Adjusted Gross Taxable Income of $40-$60k a year and no legal protection if the owner driver is involved in an accident. So, incorporating have very few advantages over sole proprietary as an Owner Operator.
     
    Last edited: Dec 25, 2019
  5. Accidental Trucker

    Accidental Trucker Road Train Member

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    Everything you say is true.... but way to P on the dream, man!

    They only part I would quibble with is the upside. Even making only $60K, you could exempt $20K from Self Employment tax, and that's $3K right there. (not counting any state or local income taxes) That'll more than pay for any additional accounting costs. There is SOME legal protection in the Corporate structure, and more and more carriers are going to demand it for leased on O/O's, anyway.

    Finally, there's going to be that time when you hang up the keys, and that year will likely be a good one when you sell that depreciated asset. That'll push your AGI up to where you'd wish you were able to avoid some self employment tax.
     
  6. Driver Eight

    Driver Eight Light Load Member

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    Wait, you grossed $285,000, and after expenses only made $60,000 before taxes? I’m not understanding something right. Granted, most of the is thread is over my head. But that figure, wow. On 285k if you only make 60 grand that makes owning a truck seem pointless. What do people who only gross $140,000-170,000 make before taxes?
     
  7. Driver Eight

    Driver Eight Light Load Member

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    If most owner operators only make 40-60k before taxes, then wtf why do it? Company drivers can kick that ### any day of the week. If true, this Xmas my OO plan is learned to give me a lump of coal in my stocking. 60k net before tax income on 285K gross is mind blowing.
     
    Last edited: Dec 25, 2019
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  8. fishonron

    fishonron Medium Load Member

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    Got to love that internet....
     
    Last edited: Dec 25, 2019
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  9. Driver Eight

    Driver Eight Light Load Member

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    The internet is a societal race to the bottom. And I’m winning!
     
  10. JonJon78

    JonJon78 Road Train Member

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    I see your Inquiring about leasing onto Mercer, have you checked with them what the average contractor grosses a year? What is the ideal number your looking to hit yearly? Any idea?
     
  11. Driver Eight

    Driver Eight Light Load Member

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    I would hope, anywhere from 140-190k. Realistically, prob less especially first year or 2. But I sure don’t know what the average is. I’m actually less interested in the average and more interested in the median. Average includes a lot of bad business people I would imagine.
     
    Last edited: Dec 25, 2019
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