LLC, S-Corp or no?

Discussion in 'Trucker Taxes and Truck Financing' started by Metalicious, Aug 16, 2022.

  1. Metalicious

    Metalicious Medium Load Member

    449
    285
    Sep 27, 2015
    0
    Is anybody here well versed in whether or not S-Corp would be a good move for an owner operator that is getting his LLC? I am trying to understand how some of you might be doing with your current situation. It looks like S-Corp saves some money on taxes, but from what I have read for the most part if you have all the receipts for deductions anyway, chances are we as drivers don't owe much taxes anyway, if we are owner operators anyway.
     
    ZippyD Thanks this.
  2. Truckers Report Jobs

    Trucking Jobs in 30 seconds

    Every month 400 people find a job with the help of TruckersReport.

  3. Chinatown

    Chinatown Road Train Member

    59,234
    118,271
    Aug 28, 2011
    Henderson, NV & Orient
    0
    JoeTruck and Metalicious Thank this.
  4. Metalicious

    Metalicious Medium Load Member

    449
    285
    Sep 27, 2015
    0
    I have not. Is that the "go-to" for questions like mine?
     
  5. JoeTruck

    JoeTruck Heavy Load Member

    819
    2,635
    Mar 13, 2015
    LOWER 48
    0
    You really need an account/tax person familiar with the trucking industry. Especially now with 87000 new IRS agents to audit small businesses.
    With an Scorp you can pay your self as an employee and part of the tax is paid by the employer thus being deductible along with medical and 401k. Paying yourself 50k you can leave the rest of your profits in the company and remove it as profits at 15% tax rate.
    SAVE ALL RECEIPTS ON PAPER FOR 7YEARS
     
    ZippyD, AsphaltFarmer, trapart and 4 others Thank this.
  6. Chinatown

    Chinatown Road Train Member

    59,234
    118,271
    Aug 28, 2011
    Henderson, NV & Orient
    0
    Yes, the focus and website is for owner-operators and small fleet owners.
     
    Metalicious, tscottme and JoeTruck Thank this.
  7. Chinatown

    Chinatown Road Train Member

    59,234
    118,271
    Aug 28, 2011
    Henderson, NV & Orient
    0
    The one article I posted shows how important that is. Man & wife had to prove they spent money on truck repairs. IRS said they were flagged and audited because of truck repairs seemed too high. Fortunately, they had all the receipts.
     
  8. Chinatown

    Chinatown Road Train Member

    59,234
    118,271
    Aug 28, 2011
    Henderson, NV & Orient
    0
    Metalicious Thanks this.
  9. Metalicious

    Metalicious Medium Load Member

    449
    285
    Sep 27, 2015
    0
    Thank you, @Chinatown and @JoeTruck for your replies. I will definitely research the OOIDA site and thanks for the article as well, @Chinatown .
     
    Chinatown Thanks this.
  10. noworrez

    noworrez Light Load Member

    94
    131
    Aug 6, 2020
    0
    Starting out go LLC, you don't know what you'll make. There is a level of income that make sense to switch to an S-Corp. I've heard 50k to 75k range. Then seek out a CPA that can run the numbers for you before the end of your fiscal year, then decide what makes the most sense.
    There are added expenses to an S-Corp which will be taken into consideration when running the numbers. Saved myself about 11k last year by switching to an S-Corp. Your mileage may vary
     
    ZippyD and Lite bug Thank this.
  11. bbechtel16

    bbechtel16 Medium Load Member

    579
    73
    Oct 13, 2009
    PA
    0
    Are you a new owner-operator or have been in business but now getting an LLC? Do you have your own authority? Why are you getting your LLC? Not a big deal but it offers very little real protection. The good news is none of us have enough money for a high-dollar attorney to bother with (1 million plus). In most states, they can't touch your primary residence or your retirement.

    I agree mostly with noworrez. It only makes sense (due to expenses of payroll and a more complicated tax return that you will be charged more for) once you hit the 50-75k profit on your schedule C consistently. If you are new, and with rates falling, you probably won't be that high if you are using accelerated depreciation on the equipment you just bought to lower your tax bill. The only thing is I am understanding the S corp election has to be made in the beginning of the tax/fiscal year?

    Start listening to Kevin Rutherford on the free Let's Truck app.
     
    ZippyD Thanks this.
  • Truckers Report Jobs

    Trucking Jobs in 30 seconds

    Every month 400 people find a job with the help of TruckersReport.

  • Draft saved Draft deleted