L/O Sole Proprietor or LLC ?

Its going to vary based on your income, your state, & what else you have going on. If you don't feel like doing hours and hours of mind-numbing research, contact a tax advisor who has no conflicts (meaning someone who isn't in the business of charging fees to set up business entities).

Just to give rough guidance: for my situation in California (which has an 8.8% corporate tax rate with $800/year minimum tax), an llc doesn't offer any real financial advantages until netting more than $60,000/year. And if you are the only employee it doesn't really offer any legal protection either.

 

I see a bunch of posts on here about LLCs and S Corps that from what I have learned is wrong information. Here is my understanding:

Disclaimer - I AM NOT A TAX ATTORNEY NOR A CPA. I did used to work for a tax firm, but that was many moons ago and I am not certified to give you proper legal advice.

Sole Proprietor - EVERYTHING in your business is linked to you and your business and personal assets. If someone wants to sue you, they can come after EVERYTHING you own. It doesn't matter how much or little your income is. You are also liable for all taxes for all the income you generate to include full FICA on all monies. You file your taxes just like always, but with certain business forms.

LLC - will let you basically be in a corporation type entity without all the C-Corp rules. It will GENERALLY shelter anyone who comes after you from getting access to your personal property such as vehicles or your house. You file your income tax as usual, but you will include the business forms along with it. You pay full taxes just like you have done in the past, but with some business deductions as well. You still owe FICA on your entire income. The purpose of an LLC is to protect your personal assets apart from your business.

S-Corp - Shelters you in the same manner as an LLC, but you are not paying FICA on the entire amount of money you earn, only the amount you pay yourself. The money is not double taxed like it is in a C-Corp.

With that measly bit of knowledge, I encourage you to NOT take anyone's word on this who is UNQUALIFIED such as myself. Get yourself a CPA AND an Attorney who knows the trucking industry, explain to them what you want to do, and see what they tell you. This forum is not a good place to get tax and legal advice. (No offense to anyone; I include myself in this).

Here is what the Small Business Administration says about each entity:

http://www.sba.gov/category/navigat...s/starting-business/choose-your-business-stru

Good luck!

 

There is really no "sheltering" of assets with a LLC or corporation if you are a single O/O involved in an accident. If you have significant personal assets they will make short work of it (google "piercing the corporate veil") and you will not be able to evade paying by saying that your corporate self and personal self are different. In short, unless you grow beyond a single truck under most circumstances there is no benefit to incorporating and especially not the notion that you can shelter anything.

 

True,

While a LLC or Sub-S corp can isolate the “company” from liability it dose not isolate the driver and when you are the company and the driver you have not really protected yourself from anything.

Best to look at those options from a tax standpoint rather then a legal liability standpoint for a one truck show.

 

The best thing to consider is how detailed they want to be.

If they want access to the money, then a sole proprietor is the best. Since there are no tax implications for removing the money. When you get into the LLC, there are restrictions.