# How many drivers have set up an LLC?



## Viet Vet (Dec 2, 2018)

My account recommended it. He said it would cost about $400.00. 
What did it cost you?


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## MadTownUberD (Mar 11, 2017)

I did, about 10 years ago, long before I started with Uber. I honestly can't remember how much it cost. I use the EIN, and have a separate bank account for the LLC which Uber earnings are direct deposited into, but because it's a "sole proprietor" type LLC there is literally no difference between that and the income I earn at my day job. I'm really not sure what the advantage is other than to have a separate legal entity.


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## oldfart (Dec 22, 2017)

MadTownUberD said:


> I did, about 10 years ago, long before I started with Uber. I honestly can't remember how much it cost. I use the EIN, and have a separate bank account for the LLC which Uber earnings are direct deposited into, but because it's a "sole proprietor" type LLC there is literally no difference between that and the income I earn at my day job. I'm really not sure what the advantage is other than to have a separate legal entity.


 A separate legal entity offers some liability protection


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## MikeNY (May 6, 2016)

Following


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## Danny3xd (Nov 7, 2016)

I set my LLC up in CT, Vet. It cost $250 or $280. I forget.

In my case and if this were my only liability, I don't think I would have.

Edit; I'd find out what it would cost if you did it your self. Not saying anything. Just saying.

But would look into it. Whats he charging you, etc.

Edit after edit;

Great question BTW. Got me looking. Mostly just curious. Also when I got mine, I checked a couple of boxes, wrote down my and Carol's name and handed the nice lady my credit card. Not suggesting that in any way, shape or form. Just sayin'

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Vet, this is interesting.

https://blog.corpnet.com/do-uber-drivers-need-an-llc/ "However, realize that Uber drivers' personal assets might still be at risk if they are found guilty of personal wrong-doing or negligence."

https://uberpeople.net/threads/pros-and-cons-to-setting-up-llc.196205/

https://mollaeilaw.com/blog/llc-uber-driver/

https://therideshareguy.com/day-1-should-you-form-an-llc-for-your-new-rideshare-business/


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## Disgusted Driver (Jan 9, 2015)

Try legalzoom and you want to make sure you do a subchapter s Corp. That's an LLC where the earnings flow directly to you without corporate tax.


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## Danny3xd (Nov 7, 2016)

I've always wondered about them, DD. Any good?

Ya got me curious and looked for reviews. Found one with a list of options; https://bestllcservices.com/legalzoom-llc-services-review/

I know nothing about any of them but it would be great if they work well.


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## peteyvavs (Nov 18, 2015)

The less you do the less the government knows what you’re doing.


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## MadTownUberD (Mar 11, 2017)

I've never had to pay taxes for cutting myself a check. I basically called deposits paid in capital and when I write a check to myself it's called a disbursement. the LLC Bank account basically pays for car payments, maintenance, repairs, Etc. But I only claim $0.54 a mile since the car mostly exists to get me to and from my day job. So basically it's a business with the purpose of funding my personal transportation.



oldfart said:


> A separate legal entity offers some liability protection


So if I understand this correctly the chief benefit is if I get sued the plaintiff can only go after the assets held by the LLC and not my house, my car, Etc. My car is in my name not the llc's name.


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## peteyvavs (Nov 18, 2015)

Why would any sane person spend the peanuts they earn from driving rideshare for an LLC.


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## Danny3xd (Nov 7, 2016)

MadTownUberD said:


> I've never had to pay taxes for cutting myself a check. I basically called deposits paid in capital and when I write a check to myself it's called a disbursement. the LLC Bank account basically pays for car payments, maintenance, repairs, Etc. But I only claim $0.54 a mile since the car mostly exists to get me to and from my day job. So basically it's a business with the purpose of funding my personal transportation.
> 
> So if I understand this correctly the chief benefit is if I get sued the plaintiff can only go after the assets held by the LLC and not my house, my car, Etc. My car is in my name not the llc's name.


There's caveats, MadTown. If your found negligent in some way, they can go after you personally. Like you had a broken windshield or seat belt causing harm. Then you can be personally libel.

But it is a wall opposing council would have to cross. It's a protection but not bullet proof. And with so many variables.

With mine, I put every thing I can under that umbrella. Really depends on what you have. If a lot, I would spend the money and ask a pro.

LoL. Oddly enough, it's complicated and varies greatly depending on your situation and location.

Just my 2 cents and please, with a little salt.


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## peteyvavs (Nov 18, 2015)

I tried theLLC route years ago in another endeavor and had more problems with the state and federal government, better to just not involve any government entities.


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## Seamus (Jun 21, 2018)

I set up an LLC in NY for about $400 two years ago. I do other "side" things besides Uber/Lyft and one of those other things caused me to set it up under a business name.

Same as MadTownUberD TNC uses my EIN instead of ss# and have a business bank account set up and ride share pay is deposited directly into it.

When set up as a Sole Proprietor (which 90% are) there is literally no tax advantage. Schedule C is the same as if you weren't an LLC.

Liability protection is minimal. I say that because for any lawsuits against you to be significantly damaging, you need the "N" word (negligence) proven. An LLC single proprietor company will not protect the owner from "wrong doing" or "negligence", but will for other types of business issues that may arise.

Also, LLC and S or C corp don 't really protect you if you borrow money in the business name. Any lending institution is going to make the small business owner "personally" guarantee repayment no matter how the company is structured.

All in all even though the benefits are minimal I would do it. Its another hurdle for people to jump thru who want to do you harm. Also, once it is set up you have it and it can be useful for other future endeavors you may want to do.

Good Luck.


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## Disgusted Driver (Jan 9, 2015)

Danny3xd said:


> I've always wondered about them, DD. Any good?
> 
> Ya got me curious and looked for reviews. Found one with a list of options; https://bestllcservices.com/legalzoom-llc-services-review/
> 
> I know nothing about any of them but it would be great if they work well.


I've set up 2 llc's in the past with them and never had a problem. Do it in advance and take the cheaper option. Legalzoom is great for any straightforward situation and my LLC was. It provides me with a layer of protection because I do have assets, is minimal cost per year with turbo tax and allows for more deductions and flexibility.


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## Danny3xd (Nov 7, 2016)

Disgusted Driver said:


> I've set up 2 llc's in the past with them and never had a problem. Do it in advance and take the cheaper option. Legalzoom is great for any straightforward situation and my LLC was. It provides me with a layer of protection because I do have assets, is minimal cost per year with turbo tax and allows for more deductions and flexibility.


Thanks, DD.

When I set mine up, not a clue what the 2 boxes I checked meant. I think I may have actually incured liability and need to look into it. I am making an offer on a rental property soon. So actually have, or hope to have something to lose.

As I once said to an angry customer. "GO AHEAD AND SUE ME! I own a cat, a car, a cat named Fred and a POS bent Stanly screw driver. Have at it!"

Snork. Never heard from him again. And I still have that bent POS Stanly screw driver.


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## Disgusted Driver (Jan 9, 2015)

Danny3xd said:


> Thanks, DD.
> 
> When I set mine up, not a clue what the 2 boxes I checked meant. I think I may have actually incured liability and need to look into it. I am making an offer on a rental property soon. So actually have, or hope to have something to lose.
> 
> ...


Good for you, hope you get it! Passive income is the only way to really make more, there is only so much of our time.

Make sure you are subchapter s or you have to pay corporate tax as well 

I have insurance with USAA and they provide a professional liability rider that covers me for 1 million bucks and the premium is about 30 a year. So whenever someone threatens to sue I've told them go ahead, I won't even hire an attorney but my insurance company will represent me so it won't cost me a dime.


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## Danny3xd (Nov 7, 2016)

THEY MUST RESPECT YOUR ATHARITOL!

LoL, still can't figure out how to spell that, DD.


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## FLKeys (Dec 27, 2018)

Keep in mind in some states you may not have to pay state income tax on your rideshare earnings, however forming a corporation or LLC may require you to file state income tax returns. Florida comes to mind here.


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## oldfart (Dec 22, 2017)

Watkins Consulting said:


> LLC offers great protection for the driver as well as an amazing tax benefits. The real gift is when you act like a company and there are a lot more expenses than just gas and miles. It takes a cell phone, internet, business development to run a LLC  etc. These are all tax deductible if you have an LLC versus just being a Sole Proprietor or nothing at all. Check out Watkins Consulting Biz, we set up LLC's for Uber drivers frequently and can make sure you are 1.) and LLC and 2.) maximizing the LLC for all you can.


all those deductions are available to you whether an LLC or Sole Proprietor ..


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## MikeNY (May 6, 2016)

oldfart said:


> all those deductions are available to you whether an LLC or Sole Proprietor ..


From my understanding, you do not have to open a corporation at all for any of these benefits. Even as a full time driver.


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## 911 Guy (Feb 8, 2018)

https://www.legalzoom.com/business/business-formation/llc-overview.html

~ $100 depending on the fees in your State.

An LLC is essentially a legal tool to shield your personal assets from possible lawsuit. Have no LLC, they can sue you personally. Operate under an LLC and they can only go after the assets of the LLC.


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## Watkins Consulting (Jan 2, 2019)

These deductions are only available if you set up an LLC (plus many more). There is often confusion because you can set up and LLC and then file as a "Sole Proprietor under the LLC". Which is very different than a Standard Sole Proprietor which requires no paperwork at all. We set many of our drivers up with the LLC and then give a breakdown of expenses to make sure that they maximize all of the possible deductions.


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## 911 Guy (Feb 8, 2018)

Watkins Consulting said:


> These deductions are only available if you set up an LLC (plus many more). There is often confusion because you can set up and LLC and then file as a "Sole Proprietor under the LLC". Which is very different than a Standard Sole Proprietor which requires no paperwork at all. We set many of our drivers up with the LLC and then give a breakdown of expenses to make sure that they maximize all of the possible deductions.


There is not a single deduction available to LLC that isn't available to the IC. Tax deduction is the same regardless of legal status.


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## Disgusted Driver (Jan 9, 2015)

Watkins Consulting said:


> These deductions are only available if you set up an LLC (plus many more). There is often confusion because you can set up and LLC and then file as a "Sole Proprietor under the LLC". Which is very different than a Standard Sole Proprietor which requires no paperwork at all. We set many of our drivers up with the LLC and then give a breakdown of expenses to make sure that they maximize all of the possible deductions.


I have an LLC and it's sad to see you putting out such inaccurate information that is so self serving.


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## Watkins Consulting (Jan 2, 2019)

Hi All, Sorry for any confusion, I only joined this forum because the drivers I help asked me too because of the benefits. For example the standard deductions can be the same (i.e phone, cable, internet etc.) However, Business development (taking your wife to dinner but talking about your day at work is actually a corporate write off), or Marketing ( joining a fantasy football league but you talk about your driving is actually a corporate write off). Simply Google "LLC Benefits Uber Driver" you will see many articles written on the subject. And if you already have an LLC, please look into it further. I am an expert in LLC formations and their benefits, and many, many, many people use deductions but don't look at "Corporate Write Offs". LLC's were created by the States for big corporations looking to have more "flexibility" with their taxes and encourage Corporations to file in that State (Delaware is the most known example). I am simply helping people like you all benefit from those corporate benefits. Good Luck to all.


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## Stevie The magic Unicorn (Apr 3, 2018)

It's not as important for a driving job as it would be for literally anything else.

99.9999999999% of what you could ever get sued over is covered by commercial auto insurance.


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## UberLAguy (Aug 2, 2015)

In California the cost to have an LLC is $800 a year. I have been thinking about using them simply because of protection. Read somewhere that it's very dangerous to drive without something like that. It's costly in CA.


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## Disgusted Driver (Jan 9, 2015)

UberLAguy said:


> In California the cost to have an LLC is $800 a year. I have been thinking about using them simply because of protection. Read somewhere that it's very dangerous to drive without something like that. It's costly in CA.


Wow, that's a lot. In NC it's $125 a year. Much easier to justify.


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## Watkins Consulting (Jan 2, 2019)

I set a lot of Uber drivers up with LLCs and it helps for liability and taxes. I usually set my drivers up with ADP at the same time that way they get paychecks etc (on only the income they choose to declare). Cost vary and California is one of the most costly, however you can form in Delaware $360 and still operate in CA. Good Luck!


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## UberLAguy (Aug 2, 2015)

Watkins Consulting said:


> however you can form in Delaware $360 and still operate in CA. Good Luck!


Really ? Does that means I can form in Nevada and operates in California as well ?


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## Watkins Consulting (Jan 2, 2019)

Nevada is Delaware of the West in my business. I form most of my California clients there.


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## UberLAguy (Aug 2, 2015)

But Nevada corporation will need to pay California tax and $800 a year for operating license if operated mainly in California, correct ?


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## UberTaxPro (Oct 3, 2014)

Watkins Consulting said:


> Hi All, Sorry for any confusion, I only joined this forum because the drivers I help asked me too because of the benefits. For example the standard deductions can be the same (i.e phone, cable, internet etc.) However, Business development (taking your wife to dinner but talking about your day at work is actually a corporate write off), or Marketing ( joining a fantasy football league but you talk about your driving is actually a corporate write off). Simply Google "LLC Benefits Uber Driver" you will see many articles written on the subject. And if you already have an LLC, please look into it further. I am an expert in LLC formations and their benefits, and many, many, many people use deductions but don't look at "Corporate Write Offs". LLC's were created by the States for big corporations looking to have more "flexibility" with their taxes and encourage Corporations to file in that State (Delaware is the most known example). I am simply helping people like you all benefit from those corporate benefits. Good Luck to all.


"However, Business development (taking your wife to dinner but talking about your day at work is actually a corporate write off) " Your tax advice here is suspect, even before the recent changes in the law!



Watkins Consulting said:


> I set a lot of Uber drivers up with LLCs and it helps for liability and taxes. I usually set my drivers up with ADP at the same time that way they get paychecks etc (on only the income they choose to declare). Cost vary and California is one of the most costly, however you can form in Delaware $360 and still operate in CA. Good Luck!


Seriously? Your drivers must be making a lot more than most drivers on here! Out of state LLC's still have to pay the annual $800 LLC tax and other fees in CA right?


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## peteyvavs (Nov 18, 2015)

MadTownUberD said:


> I've never had to pay taxes for cutting myself a check. I basically called deposits paid in capital and when I write a check to myself it's called a disbursement. the LLC Bank account basically pays for car payments, maintenance, repairs, Etc. But I only claim $0.54 a mile since the car mostly exists to get me to and from my day job. So basically it's a business with the purpose of funding my personal transportation.
> 
> So if I understand this correctly the chief benefit is if I get sued the plaintiff can only go after the assets held by the LLC and not my house, my car, Etc. My car is in my name not the llc's name.


It's much easier and better to just get a sugar momma ?


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## observer (Dec 11, 2014)

Watkins Consulting said:


> I set a lot of Uber drivers up with LLCs and it helps for liability and taxes. I usually set my drivers up with ADP at the same time that way they get paychecks etc (on only the income they choose to declare). Cost vary and California is one of the most costly, however you can form in Delaware $360 and still operate in CA. Good Luck!


In case of an accident where the uber driver is involved, an LLC does not help AT ALL with liability.

An LLC does provide liability in the case of a driver that is an employee of a company as long as the driver isn't also the owner of the LLC.

In case of an accident the other party will sue your LLC , YOU the driver and john does 1-100.

YOU will have to hire a lawyer to defend YOU and YOUR LLC.

YOU WILL BE SUED PERSONALLY.

The only thing that covers liability is the proper insurance in the proper amount.

LLCs DO NOT PROVIDE LIABILITY COVERAGE.


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## tohunt4me (Nov 23, 2015)

Viet Vet said:


> My account recommended it. He said it would cost about $400.00.
> What did it cost you?


$25.00 business license.

Think it costs $50.00 now.

Change the name every 3 years.
So you can continue to operate at a tax loss.


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## observer (Dec 11, 2014)

https://www.perkinsthompson.com/hidden-risks-of-personal-liability-for-llc-owners/
https://www.petekeen.net/does-an-llc-protect-me-from-an-injury
https://www.litigationandtrial.com/...llc-to-avoid-personal-liability-in-a-lawsuit/


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## Null (Oct 6, 2015)

LLC, S-Corp, etc. doesn't do anything for us in TNC regarding liability for most torts. Pax injuries, damaged vehicle, injured pedestrian, etc. don't provide any liability protection at all. The only legal protection it affords is for things like contracts. For example, if U/L sued you for some reason related to a breach of contract, it could protect your personal assets. However, even this would only apply if U/L had the business with your S-Corp/LLC, instead of 'you.'

There is a downside to entity formation as well. With all the lawsuits of Independent Contractor vs Employee, the formation may preclude, or at the very least greatly complicate, your ability to claim on various class actions, or seek redress from various state agencies for things like wage, unemployment, etc. claims.

There was only 1 real circumstance I could think of that the S-Corp was advantageous. With the S-Corp you become a shareholder, executive, and employee. You pay yourself payroll, you pay employment taxes, but you can also pay distributions, etc. You could reimburse yourself as an employee $0.58/mi direct from the company (for 2019). This is INCOME TAX FREE to you as an employee, as the tax code doesn't consider this enrichment, even though your actual vehicle expenses are likely less than $.58/mi. However, the expense IS deductible to the company, since it represents cash out, to pay an employee for company use of their personal vehicle. Since S-Corps have all losses and profits flow-through to the shareholders, this means you effectively get to extract $.58/mi out of the company, untaxed AND still take the deduction for the same expense.

However, you're then having to pay for payroll services, employment taxes, state based fees for entities ($800 min FTB in CA!!!!), etc. Given the number of lawsuits U/L are, and will, face, and the increased accounting overhead, etc. I opted to operate as a sole-prop when I was reviewing this for TNC.


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## observer (Dec 11, 2014)

LLCs are designed to protect _investors _from liabilities.

For instance, at one time, I owned a vehicle transport business with my brothers Manny, Moe and Jack.

My brother Jack occasionally drove one of the trucks, if he would have been involved in an accident he personally would have been liable.

My brothers Manny, Moe and myself as _investors_ and not drivers would have been protected.

We also had several employee drivers that worked for us.

Over the years, as a course of doing business, our employee drivers were involved in several accidents.

Our _employee drivers, _Curly and Larry were each involved in an accident. Curly, Larry and our LLC were sued by Larry H. Parker (of Larry H. Parker got me 2.1 million dollars fame). Since none of us brothers were driving our _*ass*_ets were protected. I kinda remember actually being sued by LHP three times, so there may have also been an employee driver named Shemp.

In the end, our million dollar insurance policy (required, by the state of California) paid for the lawsuits. No they didn't get 2.1 million dollars, I seem to remember the settlements were in the 50K dollar range.

(The names of my brothers and employees may or may not have been fictitious and changed to protect the innocent and not so innocent. Larry H. Parker is a pretty famous local Socal attorney).










https://www.google.com/amp/s/www.oc...ng-his-8-acre-san-juan-capistrano-estate/amp/
I think we may have paid for the door knob on his front door...


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