Wed, 31 May 2023

The shipping and transportation industry is very important as it helps ensure that people across the country can access the products they need. There are a lot of important roles in the industry, one of which is the role of a freight agent. The professionals are responsible for connecting producers, distributors, and manufacturers of different products with trucking and transportation companies that can ship them to the ultimate destination.

If you are looking to become a freight agent, you have different options to consider. One is to become an independent freight agent, which will allow you to run your own small business. When you are a freight agent, you can also choose to structure your business as an LLC, which provides a variety of benefits, including tax advantages. There are various independent freight agent tax benefits that can make this structure a great option for those in this field.

Variety of Deductions

One of the primary tax benefits that will come when you start up an LLC is that you can pass on many expenses as deductions. When you establish an LLC, you are creating a business. Any expense that your business incurs will be recorded as an expense. This can include your rent, computer equipment, operating costs, and even ownership salaries. You are able to offset revenue with these expenses, which can reduce your overall taxable income.

Pass-Through Taxes

Another benefit of structuring your business as an LLC is that you can pass the taxes through the business. One of the concerns that any business will have when they start making money is that they will be left with hefty corporate taxes at the end of the year. However, this can be reduced when you start an LLC. With this ownership structure, you will be able to pass the income onto the ownership of the LLC. Depending on your personal tax bracket and income level, this can lead to a lower tax bill. This can also help you avoid certain forms of double-taxation. 

Different Ownership Structures Under LLC

As you are building an LLC business, you will also find there are different ways to structure the LLC that can impact the way you are taxed. Some of the most common taxation strategies with an LLC include creating an S corporation, sole proprietorship, partnership, or other structures. You must carefully assess your business, projected earnings, expenses, and personal tax situation to determine which options are right for you and your business. When done properly, this can drastically reduce your tax bill while also ensuring you remain in compliance with the tax code.

Avoid Self-Employment Taxes

If you are going to be a sole proprietor and set up a business in that fashion, you could be hit with hefty self-employment taxes. This typically means that you will have to pay double the amount of FICA, which can add 7% or more to your tax bill each year. However, this can be avoided when you create an LLC using certain ownership structures. When you do this, you do not have to claim the income as a sole proprietor. Instead, you can pass dividends from the LLC to the owners of the entity. This can then allow you to collect the same amount of money but pay lower self-employment taxes.

If you are looking for a career that offers many advantages and opportunities, becoming an independent freight agent can be a great idea. When you are looking to become a freight agent, it can be a good idea to structure your small business as an LLC. There are many tax benefits that come with this option that can make it a great idea.


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