From: Cowan, TN

Dear TaxMama,

My husband and I have are owner-operators. We use this as one business.

I will become a Frieght Broker in the trucking industry and have a business as well.

Would combining the two be okay, or is it better to keep the two entities separate and be more beneficial tax wise? What is the best way to handle the two businesses, as one or as separates?

Thank you for your time and effort to answer our question!

Monica

 

Hi Monica,

They really are similar businesses. One sounds like it feeds the other, or supplies services to the other.

You probably have a lot of overlapping costs, don't you?

You could get away with combining them, if it's easier for you.

Besides, if you have really high expenses in one business, they will be absorbed by the income from the other business.

As to liability...you might want to consider incorporating. Perhaps as an LLC. Talk to your personal tax professional and your insurance agent, and discuss what TN laws are about LLCs and liability protection.

As both broker and driver, you are each responsible for some high value shipments. If anything goes wrong, you don't want to lose your home or savings.

Other than that, you should be in pretty good shape.

Best Wishes,
Eva Rosenberg, MBA, EA