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Sometimes it takes a new gameplan!


Happy afternoon folks,

Enjoyed visiting with a successful owner, I’ve known for several years and member of a peer group we've established.

This owner reached out to share their recent situation as they are making the final payment on their current truck.

The original plan was to trade into another new truck.

Here’s the experience trying to negotiate purchasing a new truck. Contacting this dealership that has 20+ new owner op specked tractors that people placed money down to order. And now are available because the person who placed the order is sacrificing their money paid down, these are what’s called “No Take - sales”

Trying to negotiate a purchase the dealer offered:

• $240,000 for a new T680

• Trade in offer-value for his 2018 Kenworth T680 w/ 597,000 mile when the negotiations began was $61,000

• 8.95% interest rate for 60 months

This owner decided to step back for a few days. Hitting the pause button when contemplating purchases especially a major capital investment such as this is a good strategy to practice.

Then the salesman reengaged when informing this owner they reneged on the trade in value would only offer.

• New truck price at $216,000

• $40,000 for the trade-in value

• A $21,000 decrease in value.

• New interest rate 7.95%

This person has decided to:

• Forgo the new purchase for now.

• Likely to purchse an NTP warranty as the original warrenty is about to end.

• Moving to a money market account the $30,000 now in the an escrow account.

• Reallocate the roughly $2800 per month truck payment that ended this month and deosit into the money market.

• Considering allocating for future truck purchase and possibly some deposited into an SEP and Roth IRA accounts.

Lastly during our discussion that included how all these decisions effect the income taxes.

The thoughts that it’s now time to change the business structure from sole proprietor to an LLC and elect to file as a Sub S Corp.

with a yearly profit over $100,000.


Setup themselves as a W2 empoyee on salary. And use a service like Patriot Payroll services.

When a person makes such a move be aware of some of the business decisions and changes that will have to be managed.

Suggestions;

• Dont assume thing, take your questions to your tax professional they should be able to assist with the business setup with your state and the Federal IRS election.

• Besure you know your responsibilities and changes to filings and documentation.

• Ask what this is going to cost you? Now and annually?

• Investigate your employee & payroll requirements these can vary by the State you live in.

• Recognize that you likely will have to pay unemployment and workers comp insurance.

These can be a benefit to you.

• This change in the business would offer the oppertunity for the business to contribute to retirements plans. I suggest owner again discuss with their tax preparer and a financial advisor for answers to questions and available options.

• You will be acquiring a new EIN number for your company.

• If you are an independant contractor to a carrier? You are going to have to setup a new contract and be certain that your 1099 receivables are paid to your new EIN and not your SS #. Or this or all worthless!


Lastly will you still Title your truck & trailer equipment in your name or move the title to your company? Or lease this equipment to your company? You may want to consult your attorney & tax professional.

There’s lots to managing the business administrative needs of a truck business.

Realiing this is going to take time in your office, it really pays to learn how to seperate your driving time from the allocated business Managment time.

Ownership wasn’t suppose to be this hard 🤔

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