Trucking is a highly profitable and sought-after business in the US. The industry stands at $700 billion in annual revenues and is the lifeblood of the US economy. So, if you’re considering venturing into this sector with your startup, it’s a wise investment to make.
But as with most things, you need to plan and execute it properly to succeed. Among all other things, you need to comply with the tax returns for your business, of which Form 2290 is an integral part. In this article, you’ll learn how to start a trucking company in 2021.
Before anything, you should conduct thorough market research for opportunities and pricing. This is important since the research will serve as a blueprint for your trucking company and how you should move ahead with the process. Your market research should inspect the following things:
It’s important to note that you’ll be competing with large fleet carriers. So you should avoid direct competition and find your market niche, which is a specialized service you can provide that your competitors cannot. This will determine what rate you’ll be charging, what your operating cost will be like, and how you’ll purchase fuels. Finally, get a good understanding of market trends.
As the next step, you need to register as a legal entity. That’s how customers and authorities will know that you’re eligible to operate as a company.
You can register your company as either of the following:
A sole proprietorship will be the easiest of all the options. You declare yourself as a sole owner, after which you can transport objects from one part to another. If you’re partnering up with another person to start the business, you should opt for a partnership. As you move down the list, things get complicated. So unless you want to run a trucking company on a large-scale, you should stick with either sole proprietorship or partnership.
To run a trucking business, you’d need trucks. For this, you’ve got two options. One is to buy the trucks you’d be driving or leasing them from another company or person. Both have pros and cons, and it depends on how you want to finance and structure your business.
Along with the trucks, you’d also have to arrange equipment. You may have to buy trailers, compartments, and cardboard boxes. When arranging these types of equipment, it’s best to leverage your network to refer you to the best services.
You need to get licensed at a national, state, county, and local level wherever necessary before you can operate as a trucker. In the US, there are over 150,000 filing jurisdictions, all with their independent requirements. You need to obtain the licenses that are relevant in your case. You’d need the following:
After you get the licenses and permits, you must maintain and renew them.
All the trucking companies and truckers are required to get insurance coverage by law. Commercial truck insurance is the best policy for truckers that are geared for their needs. Commercial trucks need to have at least $75,000 in insurance coverage.
This insurance will protect you, your business, and trucker employees when there’s an accident. If you’re planning to drive on your own, then you should obtain primary liability insurance.
Every business must keep track of their income and expenses to determine whether they’re making the optimal profit. As a trucking business, you should track everything from order generation to miles driven to fuel cost. Use a spreadsheet or online software to track the expenses and determine profit.
If your vehicle’s taxable gross weight is above 55,000 pounds, you must file Form 2290 and pay the HVUT tax for operating your vehicle on the US highways. You must make timely tax payments and e-file your 2290 form without delays. You can also use the form to claim a tax credit or report the acquisition of a second-hand taxable vehicle.
The trucking business is an evergreen industry, and the demand isn’t going to go down. With the steps mentioned above, you can get started with the business and start making profits within a few months.