question for owner operators

I don’t know what his state requires but in Florida you wouldn’t be able to get tags without the lease contract. Same with 2290, no tags until you pay it.

 

I'm from Ohio I haven't received the contract yet

 

That is correct you need a contract for the plates and ifta,

 

Get it before you do anything else, he is supposed to provide a copy before you sign it so you can have a legal review within a reasonable time limit.

 

One thing you want to look at for sure when you do receive the contract is the fixed deductions the carrier you're leasing onto is going to take from your settlements. I can almost assure you, at 85% you will be paying the insurance cost yourself. So, there is the reality that you may end up not even wanting to work with this carrier when you do review all the costs.

 

OP needs to slow down and learn a little bit more about this 'leasing on' aspect of trucking.

The actual lease contract lists the rights and obligations between the carrier and the leased owner AKA lessor and lessee in business language.

This lists anything to be charged back to you, how and when you get your settlements, etc.

You won't be 100% covered by their insurance.

You will be covered by their general liability which covers the public for the damage you and their trailer do in an accident, however your tractor's physical damage coverage is on you and is required by the finance company as long as you have payments.

Their insurance covers you regarding the legal aspects of an accident but not your truck so when the lawsuit comes in your mail, they get your lawyer, etc.

Non-Trucking Liability [often miss-named as 'bobtail' coverage] is your monthly premium to cover you for those times when you are not 'under dispatch'; however, some aspects such as maintenance will also be considered as 'under dispatch' when you are not working.

That's why the monthly cost is so low as it will only cover you for a few nanoseconds out of the year.

Tip: Physical Damage coverage only pays out Actual Cash Value [ACV] when a truck is totaled but your PD insurance payment is based on the declared value, usually your purchase price as the finance guys need to be covered.

Every year you should adjust the declared valuation to match the declining value of the truck; why pay for more than you are going to get?

OP, do some research and learn about Leasing a power unit to another DOT number/authority.

 

Talk to an accountant. EIN and s Corp is said to be best. Make your decisions based on tax liabilities. Avoiding a big surprise tax bill that often puts people out of business. Avoid being a company driver with a 3 yr IRS payment plan for your failed business. Seen it many times.

 

Yes I do gotta pay my insurance also through them

 

the why and how and how much are some of the many things in the contract [lease]

 

Running S-corp, which can be LLC or a corp, does not cost more in terms of administrative tasks, any more than a ordinary accounting that one should also do as a sole proprietor. Also you should try and set it up yourself. It can help saving on taxes by splitting your gross net (your net to the truck or net before you pay yourself) onto your W-2 wage and corporate income K1. The latter involves a lesser tax. That's the whole point of it.