How do taxes work? - Truckers' Trucking Forum | Message Board

Bso0121 · **^ Top** #1 10.11.2007

I'm about to start work for a small local trucking company and they don't withhold taxes... How does this work?

Northcountrygirl · **^ Top** #2 10.12.2007

My son fell into the same type of situation with a job he was on last summer. His boss never withheld taxes and didn't even tell him he wasn't going to. His boss treated him like contract labor. I'm not sure about your situation but for my son it meant he was responsible for saving his own taxes. When he filed at the end of the year he was responsible to pay the IRS for any taxes owed. I would figure holding out in savings about 30% of whatever you make a week and putting it in savings somewhere so you don't have to come up with all the taxes you owe at the end of the year.

Roadmedic · **^ Top** #3 10.12.2007

Sounds to me like they are trying to avoid the classification of employee.
This would mean they are trying to not pay workmens comp, and unemployment taxes.

Go to [LINK POSTED BY MEMBER] Only Members Can View This Truck Forum Link. and download pub 1779. This will give you all of the rules.

Brickman · **^ Top** #4 10.13.2007

The IRS is really cracking down on supposed contract labor that really isn't.

Several things have to be met in order for contract labor to be a legit designation.

1. You have to own your own equipment, or be buying it on payments.

2. You have the ability to refuse loads

3. You have the ability to work what ever hrs you want.

The reason these three are usually mentioned first is that most contract labor does not pass these first 3 tests, then there is no need to go any farther in the discussion.

Its a huge risk to yourself to take on a deal like this because there is no workman's comp coverage. If you get hurt on the job you are on your own buddy.

Roadmedic · **^ Top** #5 10.13.2007

There was a recent workmen's compensation case in Washington. The state ruled that the lease driver was an employee under the law. The truck was being leased from the company that he ran for.

There may have been an issue on the freight refusal, forced dispatch, but I don't recall.

This may lead to the IRS reviewing the case and examining their stance.

Brickman · **^ Top** #6 10.13.2007

Quote:

Originally Posted by Roadmedic

There was a recent workmen's compensation case in Washington. The state ruled that the lease driver was an employee under the law. The truck was being leased from the company that he ran for.

There may have been an issue on the freight refusal, forced dispatch, but I don't recall.

This may lead to the IRS reviewing the case and examining their stance.

The company I work for just survived an IRS audit in the last month. They must have satisfied the IRS rules for contract labor.

Roadmedic · **^ Top** #7 10.13.2007

The case is very recent. IRS is not quick to respond. I would look for them to examine and look further in about 28 months.

Bso0121 · **^ Top** #8 10.13.2007

Thanks for the info... maybe i can talk them into helping me get my own truck and run on their authority who knows

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