Do I need an LLC as an Uber Driver? What tax form do I use for Uber?
The one down side of being an independent contractor is that you don’t have a proper employer to handle your tax situation or protect you in the event of a lawsuit.
Luckily, you don’t need an employer to enjoy being an independent Uber Driver and have the best of both worlds.
Setting up an LLC is simple to do, and comes with many benefits that will set your Uber Driver business up for success.
What are those benefits?
How do you set up an Uber Driver LLC?
Should you form an LLC for your new rideshare business?
Keep reading below so I can answer all these questions and more to tell you how setting up an LLC is right for you.
If you have any questions about how to set up that LLC, or if you’re ready to get started today, email me any time at email@example.com.
What is an LLC?
An LLC is a business structure that separates your business and personal assets which comes with many legal and financial advantages.
It’s easy to form an LLC, and will benefit your Uber Driver business immensely in the long run.
The two biggest reasons that an Uber Driver would set up an LLC are for legal protection and tax advantages.
LLCs accomplish both these benefits by separating the assets and legal liability of you as a person and your business.
By keeping your business profits and personal salary separate, you save on self-employment tax and by keeping business liability and personal liability separate, you get legal protection in certain lawsuits.
Can I Uber under an LLC
Every independent contractor, including Uber Drivers, can benefit from setting up an LLC.
Some objections to setting up an LLC include not wanting to spend the money upfront or not understanding how to make it work.
As far as the money goes, the small amount of money that you spend setting up your LLC for Uber will save you a lot more money later in taxes and if you get sued.
If the reason you haven’t set up an LLC for Uber yet is that you don’t understand how, this is when you should contact a qualified business lawyer to help you.
I’ve helped business owners just like you set up their LLCs and get their businesses going. Email me today at firstname.lastname@example.org so I can set up your LLC.
How to Set Up LLC for Uber Driver
Forming an LLC for your rideshare business may seem complicated, but is actually a fairly straightforward process.
The basic steps to set up an LLC are as follows:
- Decide which state you’re setting up your LLC in.
- Choose a name for your LLC.
- Pick a Registered Agent for your LLC.
- Draft and file your LLC’s Articles of Incorporation.
- Create an Operating Agreement.
It’s that easy! There are things to consider depending on which state you’re incorporating in, of course, so be sure to follow your state’s laws carefully and contact a qualified business lawyer if you have any questions.
Tax Benefits of LLC for Uber Driver
Setting up an LLC allows your Uber business to take advantage of tax flexibility that will save you hundreds or even thousands of dollars.
If you don’t have an LLC in place, then you have to pay the self employment tax of 12.4% on all of the income you earn as a driver.
However, if you do have an LLC, you can choose to be taxed as an S-Corp. This means that your business pays you a reasonable salary, and you only have to pay self-employment taxes on that salary.
So instead of paying $9,300.00 in tax on Uber earnings of $75,000.00, your LLC could pay you a salary of $30,000.00 and you would only pay $3,720.00 in self-employment tax.
That’s $5,580.00 which goes right to your bank account.
Additionally, you need an LLC and EIN to set up your rideshare business checking account.
LLCs give Liability Protection for Uber Driver
Having an LLC in place will limit the ability of your customers to seize your personal assets in a lawsuit.
If you don’t have an LLC, then there is no separation between your assets and the assets of your Uber business. This means that someone can sue your Uber business for anything that you personally own.
However, if you do have an LLC, lawsuits made against your LLC can only affect assets owned by the LLC and your personal assets cannot be touched.
This is very important for customer-based businesses, especially ones as dangerous as driving. All the legal protection you can possibly get will help your peace of mind.
Supplement Uber LLC with Insurance
An LLC for Uber Driver will not protect your personal assets in certain circumstances, so it’s important to have good supplemental insurance in place.
Even though your LLC cannot be sued for your personal assets, if you are negligent and cause a car accident or passenger injury then you can still be personally sued.
A comprehensive insurance policy is a good way to make sure that you are personally covered and is a necessary supplement to an LLC for any Uber Driver.
It can be difficult to pick the right insurance, however, which is when you need to turn to a competent professional you can trust to help.
Email me today at email@example.com with any questions you have about how to choose the insurance that’s right for you and your Uber Driver business.
Now you understand how an LLC works, and all the ways that it can help your Uber Driver business.
Still, there might be a few questions you have about how it works in your state.
Also you just might not have the time to set up the LLC yourself, or you could simply want an expert handling the details for you.
That’s where I come in.
I’m a lawyer who has set up LLCs for hundreds of successful business owners, and I’m ready to do the same for you,
Send me an email at firstname.lastname@example.org so I can get started on setting up your LLC.