which is the way to go? as of right now i got nothing to my name, just 2 cars.


this is the most confusing part of all this!

 

A business structure is chosen not just for the limited liability it affords, but for some tax advantages. As you may already know, I prefer a corporate structure to a sold proprietorship. If you are unclear as to which way to go you should consult with a tax professional and seek their advice concerning your specific situation.

 

Don't get the idea that incorporating will protect your bacon from liability. Remember, you are the driver as well. So, if someone wants to go after you for something you did while driving, no incorporating will protect you or your assets if they want to sue the pants off of you. Likewise, if anyone thinks that incorporating will protect them, then ask the fellas who were running Enron if they didn't lose their personal residences over that fiasco. Or ask Bernie Madoff's wife if she thinks she got a got deal by Bernie being incorporated.

Incorporating really is only a good idea for accounting purposes. Mostly to reduce tax liability and , somewhat, financial liability, but not legal liability. Most O/O with a single truck would not really reap real benefits from incorporation, only accounting hassles if not done properly.

Like Gman said, check with a CPA with a solid reputation about whether you would benefit from incorporating. Spending an hour with an attorney who specializes in this is not a bad idea either. Both are worth the cost of an hour of their time. Then you will be able to make an INFORMED decision.

 

Like was said, you won't get any additional liability protection through LLC or incorporation. Substantive tax benefits won't begin showing up until you reach REAL net income exceeding $60-$65,000 annually. I know that many don't believe that, but it's been shown time and again to be true. I'm not a big fan of Kevin Rutherford, but even he echoes this point. Incorporating does not simplify taxes, it complicates them and in many cases will result in higher tax liability at lower income levels.

Bottom line; if you're a one-truck O/O and your net income is below $60,000 (like the great majority) keep things simple and stick with a sole proprietor.