6 Steps to Successfully and Legally Becoming an Owner-Operator
Are you considering becoming an owner-operator in the trucking industry? It can be an exciting and challenging role to take on, but it requires careful planning and preparation to ensure that your business is successful and compliant with all regulations.
To help you get started, we’ve put together the following six steps that you need to take to become a successful and legal owner-operator:
Research the Laws and Regulations
Before you launch your trucking business, it’s important to understand the laws and regulations that apply to your operation. You’ll need to know the requirements for obtaining licenses, permits, and insurance, and you’ll need to keep up-to-date with any changes that may affect your operation.
To start your research, visit your state’s Department of Transportation website, and check out the Federal Motor Carrier Safety Administration (FMCSA) website for national regulations.
Acquire IRP Apportioned Plates
If you plan on traveling between states in your truck, you’ll need to obtain IRP (International Registration Plan) apportioned plates. These plates allow you to pay the appropriate registration fees and taxes for all the states you operate in, making it easier to travel across the country.
To obtain IRP apportioned plates, you’ll need to work with your state’s Department of Transportation and provide information about your truck, including its weight, make and model, and other details.
Obtain a Motor Carrier Authority from the FMCSA
To operate as an owner-operator, you’ll need to obtain a Motor Carrier Authority (MCA) from the FMCSA, which allows you to legally transport goods across state lines. The MCA process involves submitting an application, providing proof of insurance, and paying a fee.
It’s important to note that obtaining an MCA is just the first step in getting your trucking business off the ground. You’ll also need to have a solid business plan, access to financing, and the right equipment to be successful.
Get Appropriate Commercial Insurance
As an owner-operator, you’ll need to have appropriate commercial insurance for your trucking operation. This insurance typically includes liability coverage, physical damage coverage, and cargo insurance.
To obtain commercial insurance, you’ll need to work with an insurance provider that specializes in trucking insurance. Be sure to shop around and compare rates from different providers to get the best coverage for your business.
Set Up a Mileage Tax Reporting System
As an owner-operator, you’ll need to report your mileage to the IRS for tax purposes. To make this process easier, it’s a good idea to set up a mileage tracking system that allows you to easily record your miles and calculate your tax deductions.
There are a variety of mileage tracking apps and software programs available that can help you keep track of your mileage and expenses. Some of these tools even allow you to integrate with your accounting software to make tax time a breeze.
Determine Which UCR is Right for You
Finally, you’ll need to determine which Unified Carrier Registration (UCR) plan is right for your business. The UCR is an annual fee that owner-operators need to pay to operate across state lines. The fee varies depending on the size of your operation and the number of vehicles you have.
To determine which UCR plan is right for you, you’ll need to consider your business plan and goals, as well as your budget. Be sure to do your research and choose a plan that provides the coverage you need without breaking the bank.
