NEW LEASE OPERATOR UPDATE - 1st post 4/18/13

Been over this in another thread ... you'll pay less in taxes as an O/O on the same income, than you would as a company driver ... a lot less.

 

Where can I find that thread so I can read it?

 

wait your taxed lower as an o/o such as Fica etc?

 

No you're taxed the same rates. The difference is in the writeoffs. You can write off so much stuff and combined with Swift's extreme low pay you can actually operate at net loss every year and owe big fat $Zero come tax time.

 

have very many of you o/o guys pulled in a decent profit worth the hassle over being a company driver?

 

Here

Sort of yes and no. It's a matter of where the deductions take place. For an O/O everything related to the business is deducted on Schedule C and you are only taxed on the amount transferred over to your 1040, here you still take your personal deduction.

The big hitter is per diem. Roughly, say you stay out around 300 days, the per diem deduction is about $14,000. For an O/O that is all tax free money. A company driver takes that deduction on Schedule A and the amount is still subject to the 7.5% SS/Medicare tax. Also on Schedule A, that deduction is limited only to the amount that exceeds 2% of the gross pretax income.

Also unless you are already using Schedule A, you will loose your personal deduction of $5,900, so your net deduction is only around $8,000 less the 2% limitation. For an O/O, you still claim your personal deduction, so your taxable income just dropped another $5,900.

 

I would go L/O or O/O if...

I wanted to spend every waking minute of my free time calculating every expense, saving every receipt, finding the right accountant, worrying about the next repair bill, figuring every fuel stop against the next and this or that pay period...

Pride of ownership?

Pride is the downfall of many a poor soul.

If you have a GOOD head for business being an O/O might make sense.
But being a L/O wih any company is (usually) simply asking for ruin.


I drive because I like to drive, and this job allows me to see family that I couldn't without the flexible home times.
But, personally, I have no head for running my own shop.

 

All that and I just don't want to!

I spent 30 years running multiple successful businesses, that was stress enough for one lifetime!

 

Popeye, I wish you the best of luck! However, I am afraid for you. You probaly should have stayed with your sailor job. In six months you will be broke and Olive Oyl will be with Brutus. I hope this does not happen to you but it always pays to be prepared.