# Another newbie who needs help



## DWM Lanscape (Oct 31, 2016)

Hi everyone, I'm new to the forum and the industry. I'm 19 and I've been doing yard work/plowing for 2 years with a company, but now I want to go on my own. I live in Massachusetts so let me know if I'm on the right track.

I own a 1997 dodge ram 1500 with a minute-mount plow. I plan on doing residential lots only but I may get subcontracted to do a few lots too. So, I need a dba in woburn saying I am doing business as DWM Snow Removal because that is where I live, and my address is the business address, although it is technically my grandmothers house. I don't plan on hiring anyone so can I use my social security as my Tax ID? Or is it a better idea to get it. If I hire another truck as a subcontractor does that count as an employee? Lastly, whats the advantage of being a seasonal business and how do I become a seasonal business compared to a year-round business?

My other question is about insurance. The truck is insured as a passenger vehicle in Massachusetts, how do I become insured to plow residential lots and how does liability work? Also how do I acquire the commercial plates for my vehicle instead of passenger? Thanks everyone! I appreciate the help because there is so much to this industry.


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## SnoFarmer (Oct 15, 2004)

Call your insurance agent.

I'd set up a llc and run the DBA under that if one is inclined.

A sub contractor is a standalone business that is separate from yours.
They will need to have their own insurance and business Lic.
They are not an employee.
You will send them a 10-99 or the like for taxes.

You don't need a EIN your SS# will do as you will be claiming the income on your taxes.
When you grow and hire employees is the time to get it.
But if Ya want you can now.

I Never got " comershail " plating as I keept my weights under 10k.
The pizza guy doesn't run comsershail plates.

Nor do/ did I need a dot#

What is the plan for when the 1500 breaks down halfway threw your route?


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## DWM Lanscape (Oct 31, 2016)

SnoFarmer said:


> Call your insurance agent.
> 
> I'd set up a llc and run the DBA under that if one is inclined.
> 
> ...


Why an LLC? I believe it costs like 700 bucks or something, I know it takes the liability away from me but I don't think its in the budget. 
Secondly, the pizza guy isn't his own company, i thought any vehicle used to do business (plowing) needs commercial plates, is there a reason to get "comershail" or not to get it? 
Lastly, good question haha. I've got faith in it, almost rotless and its been running fine the last couple months. That answered a bunch of questions, thanks man.


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## ktfbgb (Jan 31, 2016)

DWM Lanscape said:


> Why an LLC? I believe it costs like 700 bucks or something, I know it takes the liability away from me but I don't think its in the budget.
> Secondly, the pizza guy isn't his own company, i thought any vehicle used to do business (plowing) needs commercial plates, is there a reason to get "comershail" or not to get it?
> Lastly, good question haha. I've got faith in it, almost rotless and its been running fine the last couple months. That answered a bunch of questions, thanks man.


Just because it's running good now means nothing. Stuff breaks all the time. The LLC takes the liability off of you personally. If you hurt someone or something and don't have the LLC they can sue you personally. It doesn't cost $700 to set up an LLC, you can do it yourself, I did. And you need to have more than $700 sitting in the bank to cover repairs etc during the season. At a minimum you shoul always have enough sitting there to cover the deductibles of your different insurance plans.


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## SnoFarmer (Oct 15, 2004)

No llc or the like and your not ready to start a business.
As for cost, it cost me $130.
Filed on line.
It's very easy to do, so easy even A monkey can do it.

Nothing personal but only a fool wouldn't seperate their personal assets from their business
Liabilities.

Home > Articles > What is an LLC? LLC Definition
*What is an LLC?*
The simple definition of a *limited liability company (LLC)* is that it is a form of business entity that limits the liability of its owners while allowing flexibility in operation and management and passing through its income to its members with no tax at the entity level.

Well, that's a pretty easy definition of an LLC, but it leaves a lot of queations unanswered. So, really, what is a limited liability company?

*Basic Features of an LLC*
The basic features of a limited liability company are:


Its owners have limited liability for the entity's debts and obligations, similar to the status of shareholders in a corporation, and 
Its income and losses are normally passed through to the owners as if it were a partnership.
The LLC is probably most like a limited partnership, but without the requirement that there be at least one general partner liable for the debts and obligations of the partnership.

An LLC is a statutory creation. That is, unlike general partnerships which developed under common law, an LLC, like a corporation, is created by filing a document (usually called Articles of Organization) with an officer designated by state law. As the LLC is a statutory entity, the laws governing the LLC set up a particular ramework of rules for the operation and management of the LLC. Generally, most of the statutory rules are considered to be fallback provisions which take effect only if the LLC's operating agreement doesn't provide for guidance on a particular point.

Home > Articles > How Limited is Limited Liability?
*How Limited is Limited Liability?*
One of the key advantages of a limited liability company (LLC) over a sole proprietorship or general partnership is the fact that the owners (members) of the LLC are not personally liable for the debts and claims of the business. Normally, that means that if the business is unable to pay a supplier, lender, landlord or other creditor, that person cannot go after the personal assets of the members of the LLC. The members may lose their entire investment in the business, but their other assets - car, home, and personal bank accounts - are safe from the creditors of the business.

Or are they? In truth, there are many exceptions to the rule of limited liability. Many LLC members will find that, due to the way the business was operated, the promised protection from the liabilities and claims of the business is not meaningful.

*How Personal Liability Arises*
A member of an LLC can be held personally liable for many different types of claims, but they typically arise under four different scenarios:


Claims arising out of an act or omission by the member, such as the member's own negligence, fraud or illegal act

Claims arising out of a contract, particularly one that was personally guaranteed by the member

Claims based on the concept of "piercing the veil" of the LLC

Liability for consenting to or receiving a distribution in violation of the LLC's operating agreement or the applicable LLC statute
These claims are not a result of choosing an LLC as a form of entity. All of these exceptions apply equally to shareholders in corporations and, in fact, the exceptions were developed first under corporate law.

As for trucks they all run untill they don't.
What is your plan for when is does break down
What will your customers expect to happen?
And how will you retain them?

A bit of advice, a disgruntled customer is going to tell all of their friends.
Not only that they could go after you for not doing you job as contracted.

Are you going to have your clients sigen a contract for service?


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## JMHConstruction (Aug 22, 2011)

SnoFarmer said:


> It's very easy to do, so easy even A monkey can do it.


Even a trunk monkey?


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## SnoFarmer (Oct 15, 2004)

JMHConstruction said:


> Even a trunk monkey?


Yes.


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## JMHConstruction (Aug 22, 2011)

I have a 1999 dodge 1500, just stopped using it as a daily driver. I NEVER had an issue besides the transmission. Do you have $2k for a tranny? dodges have junk transmutations and I went through 2 with only 115k on the odometer as she sits now. Like I said, never had an issue until 6 months ago. Everything started going out. I've put more in the truck now than what it's worth. I'm using it as a company truck for sidewalks and getting rid of it as soon as the seasons over. Everything breaks, especially if you're using it for this.

What I'll suggest is being a subcontractor for a few years doing sidewalks on commercial lots. I'm sure others will disagree, but without start up capital you will never make it. Why risk starting to get a name out there to just have a breakdown you can't afford and it puts you out for the season. Bad business travels fast, you don't want your reputation on the line without having a way to keep going.


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## Randall Ave (Oct 29, 2014)

In your state, do you have to collect sales tax on plowing driveways?
And things break, last year a customer was in my place three times in one day during a storm. Had to weld up his plow, then he lost a brake line, don't remember the third thing. And not even gonna bring up the garage door he took out at a customers place he was plowing.


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## areoseek (Mar 13, 2013)

You don't need an LLC if it's a sole proprietorship. Get your DBA so the bank and insurance co will recognize you as a business, get yourself "QuickBooks self-employed", Apply for an EIN online, go down to the local credit union, take your EIN and dba paperwork in, set up an account and MAKE SURE YOU DONT MIX COMPANY MONEY WITH PERSONAL. This is critical. hence the separate account. Keep every receipt. Every one. scan them and attach them to your QuickBooks expense report. track your mileage. you've got to find every tax deduction you can, because quarterly taxes can hurt in our biz.

I use Erie insurance for my GL, 2mil. costs me about 75$ a month. once you start doing a lot of commercial, and getting more assets, THEN start up an LLC. don't let anyone tell you that you can't succeed. These guys mean well, they're trying to be real, not scare you, hell they've helped me on a few questions I've had, like getting quickbooks. I love it!. I'm telling you that you CAN succeed. I did it, so can you. But yes, get a backup truck. things break. it blows. move on.


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## JMHConstruction (Aug 22, 2011)

Good advice above. I used a dba until I went on my own full time, now llc. The problem with a sole proprietor is that it's all on you personally. I always went with the theory, I don't have much to take so who cares. Well I was talking to a tax accountant and he told me he knows people who get their checks garnished in order to make payments for a lawsuit. As easy as it is, I'd just get the llc now. Taxes aren't much different, only big difference is that you are different than your business. Keep everything separate and you'll be good.


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## zeroman (Nov 1, 2016)

I started out in lawn care as a DBA but since I am going to start plowing I am going to go to an LLC. The above advice is great, it cost me 125.00 to be an LLC and Quickbooks is only 12.00 a month but keep everything seperated. I have a gas card and only use it for my work truck also one credit card for business use it makes tax time much simpler. Good luck you got this.


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## SnoFarmer (Oct 15, 2004)

If your going with a DBA you certenely don't need a EIN.
With out any employees you have no reason to get one.
Talk to your accountant,CPA, one that does a lot of business.
Just get your LLC now,why mess around?

Not all credit unions will do business accounts.

Next, to not mix assets you will need to lease or sell your truck to your business.

A note on DBA's
Naming your business is an important branding exercise, but if you choose to name your business as anything other than your own personal name then you'll need to register it with the appropriate authorities.

This process is known as registering your "Doing Business As" (DBA) name.

*What is a "Doing Business As" Name?*

A fictitious name (or assumed name, trade name or DBA name) is a business name that is different from your personal name, the names of your partners or the officially registered name of your LLC or corporation.

It's important to note that when you form a business, the legal name of the business defaults to the name of the person or entity that owns the business, unless you choose to rename it and register it as a DBA name.

For example, consider this scenario: John Smith sets up a painting business. Rather than operate under his own name, John instead chooses to name his business: "John Smith Painting". This name is considered an assumed name and John will need to register it with the appropriate local government agency.

The legal name of your business is required on all government forms and applications, including your application for employer tax IDs, licenses and permits.

*Do I Need a "Doing Business As" Name?*

A DBA is needed in the following scenarios:


*Sole Proprietors or Partnerships* - If you wish to start a business under anything other than your real name, you'll need to register a DBA so that you can do business as another name. 
*Existing Corporations or LLCs* - If your business is already set up and you want to do business under a name other than your existing corporation or LLC name, you will need to register a DBA.
*Note*: Not all states require the registering of fictitious business names or DBAs.

*How to Register your "Doing Business As" Name*

Registering your DBA is done either with your county clerk's office or with your state government, depending on where your business is located. There are a few states that do not require the registering of fictitious business names.


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## theplowmeister (Nov 14, 2006)

as far as selling the trucks to your own business. In MA you have to pay sales tax on the trucks when you move them from personal to business. and the tax is based on the blue book NOT on what it actually sold for.


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## Philbilly2 (Aug 25, 2007)

I would personally not even screw around with a DBA unless you plan to keep doing everything by yourself for the rest of your life.

The LLC or Corp will create a "corporate veil" this does not mean that you are not on the hook for your actions, it only implies that if you treat your LLC or Corp as a true LLC or Corp, you will be deemed a "member or shareholder" in the LLC or Corp. This makes it so if something tragic happens and you are sued, they will exhaust the assets of the LLC or Corp before they take your house... (in short terms)


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## Nursemylawn (Oct 18, 2016)

my LLC costed me $75 and $500 insurance for a Year Lawnmowing/Snow Removal..


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## SnoFarmer (Oct 15, 2004)

theplowmeister said:


> as far as selling the trucks to your own business. In MA you have to pay sales tax on the trucks when you move them from personal to business. and the tax is based on the blue book NOT on what it actually sold for.


If you dont lease or sell them to the business you are not keeping your personal assets separate from the business.
this will allow the lawyers to more easily
Pierce the Corporate Veil.

A key reason that business owners and managers choose to form a corporation or limited liability company (LLC) is so that they won't be held personally liable for debts should the business be unable to pay its creditors. But sometimes courts will hold an LLC or corporation's owners, members, and shareholders personally liable for business debts. When this happens it's called "piercing the corporate veil."

*There is no real separation between the company and its owners.* If the owners fail to maintain a formal legal separation between their business and their personal financial affairs, a court could find that the corporation or LLC is really just a sham (the owners' alter ego) and that the owners are personally operating the business as if the corporation or LLC didn't exist. For instance, if the owner pays personal bills from the business checking account or ignores the legal formalities that a corporation or LLC must follow (for example, by making important corporate or LLC decisions without recording them in minutes of a meeting), a court could decide that the owner isn't entitled to the limited liability that the corporate business structure would ordinarily provide.

http://www.nolo.com/legal-encyclopedia/personal-liability-piercing-corporate-veil-33006.html


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## zeroman (Nov 1, 2016)

In a general figure, I am a small but growing DBA what should I put aside for the accountant at the end of the year.


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## ktfbgb (Jan 31, 2016)

zeroman said:


> In a general figure, I am a small but growing DBA what should I put aside for the accountant at the end of the year.


He will tell you based on your numbers. Only he can tell you.


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## JMHConstruction (Aug 22, 2011)

While this is being addressed, how do you lease a truck to your business? My old truck was purchased with cash for the company, and had always been in the company. I couldn't get a loan using my company for the new truck, so it's under my personal credit and my name. I don't have the finances to buy the truck from myself, so what do I need to do? If the OP comes back I'll start a new thread.


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## ktfbgb (Jan 31, 2016)

My cpa handles all that. The truck is in my name but the business had made every payment, insurance payment, maintenance payment, fuel etc. not a dime has came out of my personal account for it. The accountant takes care of rest when I file taxes. Sorry I bet someone else knows more than me saying I'm just a stupid cave man and my cpa handles it lol.


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## JMHConstruction (Aug 22, 2011)

ktfbgb said:


> My cpa handles all that. The truck is in my name but the business had made every payment, insurance payment, maintenance payment, fuel etc. not a dime has came out of my personal account for it. The accountant takes care of rest when I file taxes. Sorry I bet someone else knows more than me saying I'm just a stupid cave man and my cpa handles it lol.


Thanks I'll talk to my tax guy.


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## Philbilly2 (Aug 25, 2007)

JMHConstruction said:


> While this is being addressed, how do you lease a truck to your business? My old truck was purchased with cash for the company, and had always been in the company. I couldn't get a loan using my company for the new truck, so it's under my personal credit and my name. I don't have the finances to buy the truck from myself, so what do I need to do? If the OP comes back I'll start a new thread.


Same way you do anything else that you rent from yourself. The LLC will have to write a check to you (as a person) or have a balance transfer of some sorts. The key is the paper trail if you do get audited or sued. If you want to go one step further, have a contract between your LLC and you as a person, go get it notarized and now you really have something to work with should something go bad down the road.

We do this with our shop and office building as another appreciating asset would kill us on the tax end for the Corp. I have an LLC that owns the property and buildings which turns a wash at the end of the year and my operating Corp writes a check to the LLC every month so it rents the building from my LLC. Rent is able to be written off the Corp taxes...


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## FredG (Oct 15, 2012)

I agree on the LLC or Inc thing. I'm not so sure he would need that to start unless he's loaded with personal assets. When I started out I had a DBA, The trucks were in my name, Insured in my name and covered under my GL when on the job. Tax time comes your books go to a accountant. It is what it is, Just file your receipts in some type of order.

As you grow and have more equipment, Shop, Your own home etc you need the LLC or similar. In hind site I should of INC. From the jump, I risked my home, My annuity fund etc. As long as he lives at his grand Mother and a old truck he should be okay. If he has a situation and Liewers get involved his GL will have to handle it. What else they going to get. LOL I'm sure many will disagree.


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## SnoFarmer (Oct 15, 2004)

*self-Employed Owner (Sole Proprietor)*

The owner can choose to use either the actual expense method or the standard mileage rate method subject to the rules outlined above.

If an employee uses a personal vehicle for business, the employer typically reimburses the employee for the business mileage incurred at the standard mileage rate. The amount received for documented business miles is not taxable to the employee and vehicle expenses are deductible by the employer.

*Note*: If you are a single-member LLC and file a Schedule C with your personal tax return (Form 1040), you are considered a self-employed owner for tax purposes.

If you use vehicles in your small business, how and when you deduct for the business use of those vehicles can have significant tax implications. It pays to learn the nuances of mileage deductions, buying versus leasing and depreciation of vehicles. Special rules for business vehicles put in use in 2016 can deliver healthy tax savings.
*Some important questions*

The deduction for using vehicles in your business can sometimes be significant, so it's important to make the following decisions:


Is it better to use the standard mileage rate as your deduction or the actual expenses incurred for a vehicle used for this business?
Who should own the vehicle? The business, the business owner or the employee?
Should the business lease or buy the vehicle?
*Here's a general overview*
Business vehicles are cars, SUVs and pickup trucks that are used for business activities.

What does not qualify:


Vehicles used as equipment, such as dump trucks
Vehicles used for hire, such as taxi cabs or airport transport vans
The IRS is very fussy about writing off the cost of vehicles, so if you plan to take a vehicle deduction it's essential to keep a detailed log of your business miles and other expenses if you want to write them off, too. We suggest that you pick up a vehicle expense log at an office supply or stationary store and keep it in your car.

The rules are the same as an S Corporation, with one exception: A partner/member who has unreimbursed auto expenses as a requirement of the partnership/LLC agreement can claim the deduction on Schedule E of Form 1040 rather than on Schedule A. *Note:* It's generally less burdensome for a business to allow an employee (even a shareholder, partner, or member) to use his or her personal vehicle and submit an expense reimbursement request. This eliminates a substantial amount of record-keeping for the employer. The tracking of business mileage cannot, unfortunately, be avoided or eliminated no matter what reporting choice you make.

so it seems thay we/i may not be a right as we thought, always thought it was best to have the vehicle under the business name.
but..... I was told by my insurance company that i needed to lease it to my corp.


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## DWM Lanscape (Oct 31, 2016)

I''m back guys. So, in massachusetts its 500 dollars to file as a LLC. I have another friend who has a 2007 f150 plow truck. If we partnered 50/50 under an LLC, could we both keep our private auto insurance and split liability insurance for the business, not sure if this is a stupid question? Also, I'm confused with leasing the trucks to the company, I bought the truck before I formed the business and don't have capital to buy it from myself either. Do I even have to? Can I give it away as a gift to the business and not pay sales tax? I doubt it haha

edit: sorry, didn't see the last post. So does that mean we can both use our trucks as personal trucks, and just have the business reimburse each of us based on the mileage we use on the job?


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## areoseek (Mar 13, 2013)

DWM Lanscape said:


> edit: sorry, didn't see the last post. So does that mean we can both use our trucks as personal trucks, and just have the business reimburse each of us based on the mileage we use on the job?


 make sure your auto ins. is a commercial policy with property damage coverage. tell them you are plowing with it and they should have some sort of policy preset. mine is like 64$ a month for 1,000,000$ liability. that is in ADDITION to my GL policy for 2,000,000


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## Philbilly2 (Aug 25, 2007)

areoseek said:


> make sure your auto ins. is a commercial policy with property damage coverage. tell them you are plowing with it and they should have some sort of policy preset. mine is like 64$ a month for 1,000,000$ liability. that is in ADDITION to my GL policy for 2,000,000


You referring to an umbrella?


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## areoseek (Mar 13, 2013)

Philbilly2 said:


> You referring to an umbrella?


my agent just called it commerical auto


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