The cycle is over, and we are now starting a new one. First, I want to wish you a profitable new year and hope that all your goals are met. The most important thing is family, and we strive for it. The first thing is to take care of our health by exercising, either at a truck stop or yard and taking advantage of walking while unloading. We have to take care of our diet and try to get enough sleep to be in shape.
Our obligations don’t stop and with the new year as a new way of managing our transportation business is being envisioned. All those truckers affected by the new AB5 law, will be forced to change their business entity, from owner-operator to corporation or LLC, will have a new way to manage and order all their documents, such as expenses, business income and monthly statements from the bank.
At our audit meeting on October 31, 2019 with tax agent Novoa, auditor of the Internal Revenue Service of the Long Beach, California office, and she stated that for the IRS, it’s more convenient to review a corporation than an owner-operator. According to her, the preference occurs precisely because a corporation tend to keep their documents more organized.
For that reason, it will be necessary that if you don’t have the help of a professional for your accounting it’s advisable that you personally take care of keeping a better record of your income and expenses of the corporation. Additionally, being a corporation, the brokers or companies that you work with would not be required to give you a 1099-Misc Form for what you were paid during the year. Therefore, it’s your responsibility to know the amount of your income.
Have you ever wondered how your corporation will pay you for your services? The Internal Revenue Service requires the “S” corporation to have at least one employee on its payroll. Consequently, it’s here that you will have an active part in your corporation, by becoming an employee, assigning yourself a salary according to the circumstances of the role you play. Remember that the IRS needs the requirements to be met.
The administrative management of a corporation is very easy and it’s essential not to forget the dates that the corporation needs to make its reports. If they don’t submit on the dates indicated, then fines are imposed. For example, if you don’t pay the corporation`s taxes on March 15, the fine per member is $195 for each month in arrears. The more months it takes, greater the fine.