W2 or 1099?

Are they free to come and go as they please and make their own schedule?

 

I won't ask why you're second-guessing two possibly independent tax professionals.

It comes down to how much control those "businesses" you've hired to operate your trucks truly have over the operation. Sounds like not enough. Which is usually the case, but many get away with it.

 

Please see this article that Unnamed Sickness posted earlier:

http://www.vvdailypress.com/articles/hills-39676-oak-multiple.html

Will they be fired for turning down loads? More than likely the answer is yes.

It seems as though you have made your mind up to pay drivers via 1099 even against the advice of as Red put it " two independent tax professionals ". Give a driver the choice as to which way he wants to be paid and I am confident any smart one will say W2 - in the long run it will benefit you more and employees will look at you as a more favorable employer. More than likely this will pay off in the long run for you through increase productivity. Best of luck and let us know what you decide.

 

In personal experience the 1099 only benefits the employer. You will run those drivers hard and in some cases as have been shared here hold their paycheck over a blowout. I bet u dont have any workers comp either. The only thing that seems good for the driver is the gross pay but that goes away quickly at tax time. But it is legal no doubt bout it.

 

The way I see it, most of the time paying on a 1099 is ONLY good for the "employer" UNLESS the individual is truly an INDEPENDENT contractor it is mostly a way to skirt a bunch of the stuff for what really is the employers responsibility. As stated above, it sounds like two professional tax folks are advising against it, there is probably a reason they are doing that, if you are their client, it probably has something to do with protecting you. If a situation like this goes bad, the "employer" is on the hook more than the employee, but of course there is still tax owed to the IRS either way so both parties could be in trouble with the IRS.


I am quite amazed at how many folks in this business do the 1099 thing and of course other businesses too, landscapers come to mind as I have some family in that line of work that do this despite it clearly being a violation of tax laws.


My opinion doesn't count in any event, BUT I would listen and listen closely to what a tax professional is saying, especially if it comes from more than one.


If you want to do your own research, just search the web for something like 1099 vs. W-2, hundreds of hits!


TS

 

Pay on a 1099 and if one of your drivers gets hurt or tells the IRS you will be out of business. If you can't afford to run a business the right way then maybe you can't afford to be in business.

 

A W-2 means you pay half of S.S. Tax , which is , i think , 14.7 % of wages, and must deduct , and pay the employees half , also. You also have to pay the Workmans Comp. , in whatever state you're in. You also must deduct his Fed. And State taxes.
Lotta paperwork , and filings. Weekly, or Bi-weekly.
A 1099 means he gets Gross Pay , it's up to Him to file everything. The IRS hates them , cause they have to watch all your employees , And You.
BUT , you better be darn SURE he meets the IRS's definition of Independent Contractor. The Lessor you pull for is not his employer , YOU are. They cannot fire him , only you can. They can terminate your lease , because of him , for such as refusing loads . But only you can fire him. The contractor status is between you , and him.
If your Lessor , for example , dispatches him on a load to Alaska , in January , and he refuses it , they cannot tell him he has to take it. They can tell you , however , that it needs to be covered .
They also cannot Tell you you have to cover it. Fine lines here , and all conversations must be recorded , just in case. They would , if they're POed about it , find some other way to terminate your Lease , otherwise they open themselves to lawsuit.
The safe bet is W-2 , which means more work for you , or your accountant. Lawyers Hate lawsuits .
They make more money sitting in their office , filling out documents.
hope this helps . That'll be $150.00 , for consultation fees.

 

One more thing to add. When the Income Tax was first enacted , it was a Nightmare for the IRS. They were called something different back then. They were overwhelmed , and your Hero President , FDR , and his Socialist minions , came up with withholding , which put the Burden on Business. He , and his minions in Congress , all Demoncrats , also came up with Social Security.
And , thank Woodrow Wilson , another Demoncrat , for the Federal Income Tax .
Just to be fair , another Favorite Son , Teddy , a Republican , started the ball rolling. HE Was working off another Demoncrat , back in the 18th Century , who started it.
And , HE was working off Abe Lincoln , A republican , who was working off the Famous Andrew Jackson , another Demoncrat.