Operating under an LLC or an S-Corp?
- Thread starter zenrider
- Start date
greg334
Veteran Expediter
Gasp !! Sole Proprietor - because it works for me.
LLC and S corp would be good if you are in a situation where you needed to protect the revenue to a point. BUT it will not protect you or your assets even if other tell you it will. I was told if I sued someone, the only thing I can't go after is a pension or retirement program.
LLC and S corp would be good if you are in a situation where you needed to protect the revenue to a point. BUT it will not protect you or your assets even if other tell you it will. I was told if I sued someone, the only thing I can't go after is a pension or retirement program.
paullud
Veteran Expediter
The only reason to incorporate is if you have another person driving for you. If you were to incorporate when you are an O/O you don't get any extra protection because if you were ever in an accident the other person will sue the business and you as an individual since you are the driver. On the other side if you have a driver you would incorporate so if they hit someone they could only sue the business which helps protect your personal assets.
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That makes sense if you have another person driving your truck. However As an O/O, would you get a better tax deal if you setup an S-Corp or an LLC taxed as an S-Corp?
greg334
Veteran Expediter
Why?
If you have a good accountant and listen to them, your tax burden will be less. LLC and S corps tax at personal tax levels so the advantages are few.
With an S-Corp tax status, you get exactly the same benefits of an LLC, except with the S-Corp you have to jump through a bunch of hoops that you don't have to jump through with an LLC. They are both designed to do the same thing, which is be a "pass through" entity which passes through the income from the company to the owner and gets reported on the owner's tax return. This is also what happens in a sole proprietorship. So if you are an O/O who drives your own truck and have no employees, then you can get all the benefits of an S-Corp or an LLC by doing nothing.
Did you need to get a business license from the state you are based out of?
I understand what you are saying, but what if you have a team partner driving the same truck. Would they not be your employee?
As for Husband and Wife teams I think they are considered as one person in the eyes of the IRS.
greg334
Veteran Expediter
No, I am not a DBA, I operate under my own SS number as a at will contractor.
Ok, how do you show your co-driver on your taxes? Are they considered a employee?
Is your co-driver your wife?
In my case, my wife is the co-driver, however she is not listed on the title of the truck and FedEx considers her as my employee.
paullud
Veteran Expediter
Why do they consider her your employee? I would think they just consider her another 1099 IC just like my company does with my wife. When you file taxes this way you file jointly and you both take the per diem.
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