1099 may be tempting for some to outsmart IRS. Besides , it must feel good to grab that extra money, thinking that it's all yours.
1099 vs W2
Discussion in 'Experienced Truckers' Advice' started by Renaissance1440, Jun 20, 2017.
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If you're an employee,(drive their truck,ware their uniform,get their benefits, use their tools,fuel,etc) you are paid on w-2 & taxes are taken out by employer. 1099 is for a contractor or O/O, no taxes with held, use your own equipment,tools,fuel, not told how,when,or where to work,& pay your own taxes. Now if you're an employee and paid on 1099, ah that's pretty illegal per IRS rules, but some companies will try to pay that way or offer that choice just so they can try to get away from paying taxes on you.
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A good driver will never be out of work.
And if you do it right, you should he able to afford your own insurance.
Hurst -
HurstBean Jr. Thanks this. -
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Your statement focused on someone working 1099 as an employee being illegal.
I do agree with what you said. Emphasis on where the risk lay should also be stated. Else some one who may need any kind of work they can get to help their family until they find something better, might become too afraid to work 1099 for fear of being in trouble with the law. Thats how I took your statement.
The only risks are being naive and not getting paid enough to compensate doing your own taxes. Or not having the disipline to actually pay your taxes and being trouble with the irs.
HurstLast edited: Jun 21, 2017
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Thanks in advance!Last edited: Jun 21, 2017
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You need to consider the "7.5%" FICA that an employer would have paid that you must now pay, BUT, YOUR 7.5% FICA and federal income tax must still be paid, too. There are really two taxes (FICA and income) that you need to be concerned with as a contractor, as opposed to the income only tax as an employee.
The Self-Employment Tax - TurboTax Tax Tips & Videos
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Last edited: Jun 21, 2017
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