Okay, so I bought a used truck from Crete Carrier.

Actually any profit that you have should never be spent. November through March you can anticipate to be lean times. Weather (mostly snow) and other unfor seen difficulties will put a stress on business.

At the end of the year, if you still have a substantial profit, that is when you consider upgrades to your equipment. But your profit is never to be a "personal expenditure"!

 

Okay, as a Noob, I'm going to ask a dumb-sounding question; what's a performance bond? Is that essentially load insurance?

 

Hey Redbeard, good to hear from ya. Sorry for the sucky month, but as you said its a big lesson learned and you were prepped for it. Thanks agin for sharing your numbers and have a good Christmas.

*($0.286 per mile).

With some lease programs that would be a good month

 

The IRS calculates things differently from normal business accounting practices. Some sole proprietors will pay the "employee" a salary for the actual labor done and consider it an expense. Any profit that remains can be reinvensted in the company or it can be paid as a dividend to the owner.

It many seem more complicated, but it actually lets you do a better job of analyzing how your business is doing.

 

Sole proprietors are the "emplyee". All income and expenses are the responsibility of the sole proprietor, therefore there are no dividens. Only profit or loss.

A sole proprietorship, also known as a sole trader or simply a proprietorship, is a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business. The owner receives all profits (subject to taxation specific to the business) and has unlimited responsibility for all losses and debts. Every asset of the business is owned by the proprietor and all debts of the business are the proprietor's. This means that the owner has no less liability than if they were acting as an individual instead of as a business. It is a "sole" proprietorship in contrast with partnerships.
A sole proprietor may use a trade name other than his or her legal name after filing a doing business as statement with the local authorities.

The many advantages of corporations are described in that article; chiefly they are the ability to raise capital either publicly or privately, to limit the personal liability of the officers and managers, and to limit risk to investors.
The disadvantages of corporations are advantages to proprietorship: reduced cost of a business, as corporations must do many things like purchasing, accounting, and legal actions in more expensive ways and are subject to special taxes and fees; easier and cheaper to start and discontinue without required fees and legal expenses; and easier management, particularly when a sole owner wishes to have exclusive control, as most corporations are required to be controlled by a board of directors of several persons.

Raising capital for a proprietorship is more difficult because an unrelated investor has less peace of mind concerning the use and security of his or her investment and the investment is more difficult to formalize;[3] other types of business entities have more documentation.
As a business becomes successful, the risks accompanying the business tend to grow.[citation needed] One of the main disadvantages of sole proprietors is unlimited liability where the owner's personal assets can be taken away. This is particularly true for wrongdoing or liabilities created by employees; a corporation only partially shields an owner or officer for his own actions according to the principle of piercing the corporate veil. Sole proprietors also commonly end their business shortly, or lacking continuity. Also, being alone in business, sole proprietors generally have a lack of money which will lead to a failure in business. The small size of the business causes limited management skills because there are less people working together. As employees generally seek stable employers, small independent businesses that have a high chance of failing have more difficulty attracting skilled people. Certain business structures such as Limited Liability Company allow shielding of personal assets, and sometimes, favorable tax treatment, but there are disadvantages[4] and limitations[5] also. Article copied and pasted from Wikipedia

 

Great thread!
Thanks for posting your experiences with this company.

 

I hope you are incorporated. It is not as complicated as some think. A Sub S corp allows all income to pass through to you without paying corp tax. There are may advantages to incorporating. Reduced liability and taxes are tops. As a corp you can deduct ALL of your medical expenses, including premiums. Without the corp you have to meet certain thresholds first.

A huge advantage is that you can greatly reduce what you pay in social security. Social security is only taxed on wages, not any other disbursements you take from the corp. Considering that SSN is around 15%, that's a lot of hay. Some may argue that you need to pay into SSN for retirement. Unless you are real close to retirement now, the government is going to steal most or all of it anyway. Besides, only what you contribute the last 40 quarters (10 years) matters. It's better to keep the money and invest it yourself, you will make more in the long run, and have more control over the government stealing it from you.

If your accountant advises you not to incorporate, find a new one now.