:shock:

What did we learn from '07? :wink:

Boots, flashlights, postage, truck wash...anything related o the busness can (almost) be written off.

 

Thank you for clearing that up Straman.That was exactly what he said.he also added that it protects you from suits from accidents as far as your property is concerned and also from the IRS coming after your property since a SS# is attached to a name rather than the FEIN # attached to a business name..
Bandit, you know some stuff!

 

Not if you're the one driving the truck. Once again this guy is giving you bad information on basic subjects of taxation and liability. And if you want protection from the IRS he'd better be well-versed in what constitutes the "corporate veil" and how not to pierce it. Simply having a FEIN has nothing to do with it, it's about the structure. You sure this guy's an actual CPA and not just a tax preparer? Incorporating a one-truck operation is rarely a wise investment. If you have any interest in keeping what you should and not spending for things you don't need, you might want to find another adviser.

 

So your saying if your a one truck operation, there is no protection from sole proprietor to LLC to incorporated????

 

Well, I did learn some things from my dad who's been an o/o for over 30 years :wink:

 

If you are the sole proprietor they gonna sue the corp and the driver(you) thus no protection.

 

Boom, if you are operating the vehicle and are in an accident, the fact that you are incorporated won't provide any protection from liability. Both the company (the corporation) and the driver (you) can be held liable. So, if you're the driver in an accident there is no entity that will shield you and your personal assets from liability.

Liability in a bankruptcy scenario is a different ballgame. Incorporating offers protection there...provided the corporate veil is maintained. However, a one-truck operation should have little need to protect personal assets from bankruptcy. Only a true incompetent could get so far in debt with one truck that bankruptcy is the best solution.

 

Sometimes you will have protection under a corporate structure, other times you may not. Keep in mind that anyone can sue you for anything. They can sue you personally, corporately or both. That doesn't necessarily mean that they will be successful. I prefer a corporate structure for a number of reasons. Taxes are at the top of my list. It can be easier to shelter some income under a corporate structure than as a sole proprietorship. You can pay yourself dividends rather than salary and save self employment taxes. You can set up your own retirement program under the corporation that isn't available under a sole proprietorship. It also makes running your business a little cleaner at tax time as long as you keep everything separate. There are usually some additional fees and paperwork which must be done at the end of each year, such as an annual report. In my state, the minimum fee is $100. It isn't really a big deal. If you don't want to deal with it yourself, then you can always hire a CPA to do it for you.

 

He already has a supposed CPA who told him that incorporating would protect his personal assets if there was an accident, which is simply not true if he's driving. That's on top of the misinformation regarding M&I.

Just out of curiosity, what advantage is a retirement plan set up under your corporation?

 

You can put aside more income into a retirement plan, such as through a 401k. It is one way to defer or reduce your tax bite. You are limited by how much you can put in an IRA. By having a retirement program set up through the corporation, you will be able to build your retirement fund more quickly from pretax dollars. If you work for some companies they will provide matching funds in a 401k or other type of retirement fund. If you own the corporation, you make the decision as to when it vests and how much you want to put into the fund.

As far as protecting personal assets is concerned, most lenders will require a personal guarantee for a new corporation. If you sign for corporate debts personally, then there is no protection should the corporation fail. When you are the driver and owner, you could still be held liable for damages in an accident. It depends on the type of accident and how aggressively the opposing attorney's want to be. Most of the time, they sue everyone going after the deepest pockets. If it is something about which you are concerned, then I would make sure that I was heavily insured.