Advantages of LLC for partnership

[Bob of SW Ohio]

I just purchased a van (in my name) but am about to form an LLC along with my brother as we plan to "team."

I understand an LLC will be a tax advantage (at least in ease of tax filing) for a partnership and an LLC will be easier and cheaper to form than a regular partnership. True?

Also, I plan to transfer the van title to the LLC (w/written agreement it reverts to me if LLC dissolves) plus I plan to start a company checking account. Would it be wise to wait for the LLC documentation and issuance of tax ID # prior to doing these things (probably 3-4 week here in Ohio)?

Also, I understand the LLC is viewed as a seperate entity in the eyes of the law and therby provides at least another layer of protection to our personal assets in case of a lawsuit. True?

Finally, with an LLC, is there a type of tax "flow through" so that we do not need to file income taxes on the LLC, rather, we can still just file individual taxes? Is there an advantage to filing taxes for the LLC?

O.K. Upon review of this message some of my questions may be legal in nature but, answer all of which you feel qulaified to do so!

Note: I have an appointment w/my lawyer next week to start the LLC and fed. tax I.D. info and I plan to utilize a local accountant.

Thanks in advance.

 

[Fkatz]

I just purchased a van (in my name) but am about to form an LLC along with my brother as we plan to "team."
I understand an LLC will be a tax advantage (at least in ease of tax filing) for a partnership and an LLC will be easier and cheaper to form than a regular partnership. True?

[B}That is a true Fact, But in the beginning I cannot see you spending the $$$$ to do it at this time, I would try the business first if you have not already done so and see if this is exactly what you want to do as a business. You can set yourself as a sole propreitor and pay your brother on a 1099MISC. you can split all expenses also on your each individual tax return.

With an LLC you can either file as an individual or a "S" Corp election, BUT WHAT IS YOUR STATE LAWS IN REFERENCE TO LLC'S THAT IS THE QUESTION ??. YOU CAN STILL SEE THE LAWYER, BUT I WOULD HOLD OFF AT FIRST THE LLC. YOU CAN APPLY FOR AN ASSUMED NAME FOR THE BUSINESS AT YOUR COUNTY COURT HOUSES. FOR THE BUSINESS CHECKING ACCOUNT, YOU CAN ALWAY CONVERT TO AN LLC AT A LATER TIME.


Also, I plan to transfer the van title to the LLC (w/written agreement it reverts to me if LLC dissolves) plus I plan to start a company checking account. Would it be wise to wait for the LLC documentation and issuance of tax ID # prior to doing these things (probably 3-4 week here in Ohio)? OK

Also, I understand the LLC is viewed as a seperate entity in the eyes of the law and therby provides at least another layer of protection to our personal assets in case of a lawsuit. True? YES BUT TO A POINT. I CANNOT GIVE YOU THE EXACT LEGAL ASSPECT OF THIS.
Finally, with an LLC, is there a type of tax "flow through" so that we do not need to file income taxes on the LLC, rather, we can still just file individual taxes? Is there an advantage to filing taxes for the LLC?
;
Taxes for the LLC have to be filed as a Sole propreitor or an "S" Corp, If you file as an individual you are only protected to a point

O.K. Upon review of this message some of my questions may be legal in nature but, answer all of which you feel qulaified to do so!

Note: I have an appointment w/my lawyer next week to start the LLC and fed. tax I.D. info and I plan to utilize a local accountant.

You can apply online for a Federal Tax ID. at no charge to you by filling out online or calling the IRS directly, you do not have to pay a Lawyer to do it. $$,

As far a your local accountant, the main question is DOES HE KNOW THE TRUCKING INDUSTRY??. 95% OF THE ACCOUNTING INDUSTRY DO NOT. THERE ARE ONLY ROUGHLY AROUND 25-50 OF THE THOUSANDS OF CPA'S, ENROLLED AGENTS, AND JUST TAX PRACTIONERS THAT ACTUALLY KNOW THE TRUCKING INDUSTRY, THEY SPECIALIZE IN IT. DOES THIS ACCOUNTANT KNOW TRUCKING.

HERE ARE 3 QUESTIONS THAT YOU MIGHT ASK HIM BEFORE YOU SIGN Up

1. HOW MANY YEARS CAN A CARGO VAN DEPREICIATED AND WHAT IS IT LIFE. or CAN I CHOSE TO TAKE THE STANDARD MILEAGE DEDUCTION INSTEAD.

IF HE SAYS YOU CANNOT USE THE STANDARD MILEAGE DEDUCTION, HE IS WRONG.
He must specify on the return in business id # the Courier/messenger classification.

2. WHAT IS THE PER DIEM FOR OTR DRIVERS. AND AT WHAT PERCENTAGE IS ALLOWED.

IF HE SAYS THE RATE IS BASED ON WHERE YOU ARE TO USE THE PER DIEM, and you get 50% as the allowance HE DOES NOT KNOW THE TRUCKING INDUSTRY

3.A Does he know what a lumper is,
B)Can you deduct a potta potti, and the tiolet paper,
ANYTHING THAT YOU PURCHASE FOR THE VAN ITSELF AND USE ON THE TRUCK IS DEDUCTIABLE. PERIOD

I think every one knows what a lumper is. he is a guy or gal who loads or unloads trucks

If he says you cannot deduct the porta potti AND SUPPLIES. HE DOES NOT KNOW TRUCKING.

I MYSELF DROVE AS A COMPANY DRIVER, AND WAS ALSO A OWNER/OPERATOR
I AM ALSO A MEMBER OF OOIDA # 640-573

I ALSO WOULD SUGGEST THAT YOU FIND ANOTHER ACCOUNTANT THAT SPECIALIZES IN TRUCKING.


YOUR WELCOME, BUT ASK THE QUESTIONS TO YOUR ACCOUNTANT. IF HE DOES NOT GIVE YOU THE CORRECT ANSWERS FIND ANOTHER.

fRANK

 

[Crazynuff]

A few things I learned about LLC's . Many states do not recognize LLC's from other states . You will have to pay a fee and register as a foreign LLC in their state . If you are contracted to a carrier this shouldn't be necessary . Your contract is with the carrier . The carrier is doing the business in other states . An LLC does not protect your personal assets if you are driving and found negligent . You can be found negligent and you personaly as well as the LLC can be sued . The LLC protects personal assets when you pay someone else to drive the truck .

 

[Fkatz]

Thanks Crazynuff for the input, You have seemed to answer the question for him, which is correct, I have not really checked into it as far as you did, right after Thanksgiving, I have some Tax Update seminars, and they will be going over the LLC's indepth more

Frank