LLC or Sole Proprietor or S Corp?

Sole proprietor if you just doing one or a few trucks. No real protections for a small business owner in the llC or s corp. As your income grows then it can be useful, one truck lots easier filing as a sole proprietor.

 

You can be a LLC, but then file your taxes as a sole propietor. The IRS does not recognize a LLC. But there is some benefit to the LLC tax wise, but not as far as the liability issues. After you are sucessful, paying taxes on 70,000 or more, then you can file for an S-Corp, and if you get relly good at it, the IRS will tell you when to change to a C-CORP. DO NOT fall for the ads incororate in Nevada or Delaware etc. If you incorporate in another state, then you have to register in your home state as a foreign corporation. When you start as a S-Corp, then you have to pay yourself as a driver in a payroll situation, but as a sole propietor you don't have to do a payroll.

 

you pay social security, you just pay it as a "self-employed" tax.

Your Gross income is over $200K? There's a big difference there.

 

seems like a lot of taxable income for one truck?
I waNT TO HAUL THAT TO.

 

If you are a single-member LLC, you are essentially a "disregarded entity" for tax purposes and you file as though you are a sole proprietor. Essentially, to add up all of your revenue, subtract all of your deductions, and what is left is your income. You pay the self-employment tax (social security & medicare) on all of your income.

If you are an S-corp or C-corp, you pay yourself a salary. You pay social security and medicare taxes on the amount you pay yourself...along with the personal income taxes on that amount (minus whatever you can personally deduct). Then, the corporation files it's taxes, based upon the revenues minus the business deductions. What is left is the profit (taxed at the corporate rate), and then you can pay yourself dividends from what's left of that profit....which is taxed again on your personal taxes at the capital gains rate. However, you do not pay social security and medicare taxes on this money.

The current tax system is definitely screwed up....but nobody seems to be willing to make any meaningful changes to it in order to simplify they system.