Tax Questions for Independent Contractors

[SpaceGhost58]

For all you experienced Independent Contractors who are driving for O/O's I have a question.

What is the best way to set up my business? I have am thinking of setting up as a LLC and was curious to what other I/C's do.
My main concern is to protect and seperate my business from my personal assets.

Just curious to what is the norm in this particular career.

I know tax time will be here before I know it and want to make sure I
have things in order before I get behind the wheel to expedite.

Thanks!

Spaceghost58

 

[RichM]

I don!t know what the norm is but I have been operating as a S Corporation for the past 12 years. With a S Corp there is no double taxation. The profit or loss of the S corp is passed on to the shareholders and is included in their personal taxes. It cost me about $200 to set it up.We issued 100 shares of stock that my Wife and I jointly own. We are also the Board of directors,the Officers and the employees of the Corporation which pays us a monthly salary plus bonus.You can reduce your social security hit by taking a very low salary.this is earned income which you pay SS on.The other bonus or distribution funds are ordinary income and while you pay income tax on it you do not pay SS. This is a good way to protect your personal assets.
Another small bonus is that after you have been a S Corp for several years and pay your bills on time ,everyone wants to lend you money.