Driving for an Owner Opperator and Taxes - Page 2 - Truckers' Trucking Forum

buck and a half · **^ Top** #11 07.11.2007

Mike you are to be highly commended for starting out right off legal,I hope you hire a good experienced driver that knows the ropes and does everything right for you to help you expand. Its nice to know there are some folks like you doing it right and taking care of your driver. I wish you the best in your new endeavor.

Michael Bond · **^ Top** #12 07.11.2007

Quote:

Originally Posted by buck and a half

Mike you are to be highly commended for starting out right off legal,I hope you hire a good experienced driver that knows the ropes and does everything right for you to help you expand. Its nice to know there are some folks like you doing it right and taking care of your driver. I wish you the best in your new endeavor.

Well thank you. I hope I'm not a pest with questions, but as I learn hopefully I can offer advice later on down the road.

buck and a half · **^ Top** #13 07.14.2007

Always help when I can,don't know as much as some do, but I will always give you my honest answers to any questions asked by any of you. Good luck once again.

roadkill439342 · **^ Top** #14 07.22.2007

Quote:

Originally Posted by MedicineMan

basicly they are putting you on as a subcontractor. You are contracted as a driver. You are at that point self employed and not an employee. This is pretty common when you drive for an owner operator. You will be responsible for paying your own taxes. If you are not disciplined enough to do that then don't take the job you don't want to get in bad with the irs. Trust me, you never win with the irs.
I believe they can put you on as a contractr and still have the taxes taken out of your check and held for you. This would be more of a curtesy and you'd still be a contractor and they wouldn't have to pay the workmans comp which is what they are trying to stay away from. Workmans comp is a killer to a small, one or two truck operator

Actually, you are incorrect. To be a "SUBCONTRACTOR" you MUST meet certain requirments (according to the IRS):

You MUST supply your own tools/equipment necessary to perform the job
You MUST be able to determine the hours you work
You MUST be able to determine what area you work
You MUST be able to determine HOW to do the work

So, if your employer supplies the tools and equipment necessary to do the work, if your employer determines the hours you work, if your employer determines WHERE and HOW you perform your job, you CAN'T BE a SUBCONTRACTOR.
Even IF you own your truck, you STILL could be considered an employee if your employer determines your hours, where and how you perform your job.

As an EMPLOYER, HE MUST take out payroll taxes and provide Workers Comp.

Sued an employer two years ago who claimed I was a "subcontractor" and currently sueing another. But, these claims are because employers failed to pay all monies owed and abide by State/Federal Labor Laws

roadkill439342 · **^ Top** #15 07.22.2007

Quote:

Originally Posted by NightWind

Many small companies and Owner Operators with one or more trucks use the contractor status to avoid the taxes that they are responsible for. Some even have a contract that they have you sign that essence boils down to you agreeing to be responsible for ALL the taxes and having NO recourse legally.

NOT True, they cannot enforce an ILLEGAL Contract. Been There/Done That

Quote:

Originally Posted by NightWind

Another down side to this situation is if you get hurt on the job you will not have Workman's Compensation Coverage. If you are in this situation there are Accident Policies that you can purchase that will cover you, of course you will have to pay that out of your pocket.

Also NOT TRUE, Federal Labor Laws REQUIRE employers to provide WComp at State Minimums. He MAY have to pay out-of-pocket, but he has RECOURSE to go back on the employer to PAY COSTS, plus the employer MAY suffer civil penalties for violating laws.

NightWind · **^ Top** #16 07.29.2007

Quote:

Originally Posted by roadkill439342

NOT True, they cannot enforce an ILLEGAL Contract. Been There/Done That
Also NOT TRUE, Federal Labor Laws REQUIRE employers to provide WComp at State Minimums. He MAY have to pay out-of-pocket, but he has RECOURSE to go back on the employer to PAY COSTS, plus the employer MAY suffer civil penalties for violating laws.

I don't know where you are from,it doesn't mater. I know the laws in MY state which may be different from your state.

Sorry but they have been doing it for years. Very few owner operators provide Workman's Comp to their drivers unless they are leased to a company that forces the issue or the state law requires it.

You are assuming two things here. That the driver knows the law and the owner operator complies with the law.
The average Owner Operator cannot afford the expense of Workman's Comp. Here in ALA it's running around 16% of the gross payroll. I don't agree with the law and we have always covered our drivers and they were EMPLOYEES and treated as such according to law. However it's been a long time practice in the trucking industry to treat drivers as contractors and subcontractors and 1099 them.
The contract is legal and binding just like any other contract is as long as you meet the IRS guidelines for determining whether or not your driver is a contractor or sub contractor. Any driver that signs one and doesn't read or understand the implications of the contract is a fool.

Here in Alabama we don't have to provide Workman's Comp until we have 5 or more full time employees which is in FULL compliance with Federal Law.

Each state has different laws and state law supersedes Federal Law. Each state has it's OWN laws and every driver and owner operator should look into those laws BEFORE they step off in to any situation. The Feds just want the taxes and don't care WHO pays them.

Some shipper require that you have a Workman's Comp policy and some will take what is called here a Accidental Injury Policy in lieu of it.

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