Any company drivers out there 1099?

If you are being paid on a 1099, just accept your responsibility and save enough our of your checks to pay your taxes at the end of the year. If you are not disciplined enough to save your money then write a check to the IRS every week or quarter. I am sure they will be glad to accept your money. If you are paid on a 1099, you are responsible for paying your own taxes. Don't go back to the carrier and try to plead ignorance or shake them down for your failure to take care of your responsibilities. And don't whine to the IRS to go after the company because you failed to take care of your taxes. Be an adult. Take responsibility for yourself.

 

File "exempt" and it avoids the argument all together

 

Ok, So if I drive my own truck, pay my insurance, handle all the maintenance on my vehicle. I receive a 1099 at the end of the year. I receive weekly settlements through a 3rd party. But I only work for 1 company and I agreed to provide pick and delivery service for their customers. Mon through Fri from 8-5 each day.
with the following terms I choose the route, but if the invoice says "hotshot" that one has to be done first.

I have read the IRS terms a number of times, but you just about have to be a lawyer to understand them.

Am I considered an IC or am I an employee? Any 1 here with a decent understanding of the IRS regs?

 

I have spoken with them a number of times about this issue. It can be a fine line in this business. Essentially, it comes down to control of the driver. If the carrier tells the driver when to come to work, where and how to run then they could be considered an employee. If the driver decides on how he runs, which loads he hauls then he can be considered an independent contractor. That is the condensed version. This industry is a bit different than some according to the IRS. The water tends to get a little muddy. I don't think the IRS cares who pays as long as the taxes get paid. It is a non issue as long as the contractor/driver pays his taxes. It only becomes an issue if the driver tries to avoid paying his taxes and tries to get the IRS to go after the carrier. In your case you would be considered an independent contractor. The way you explained your situation, I could make a case for your being an employee, even though you own the truck and pay for everything.

The IRS would like for carriers to withhold taxes from the settlements of owner operators. I don't see that happening, but with the short fall of taxes this government wants to squeeze every nickel they can from everyone. As an independent contractor you pay self employment taxes. That is roughly 15% of the net income from your settlements. It is social security. If you work for a company, the employee pays about half of the social security or 7 1/2% and the company pays the other half. That is really the only difference. The IRS doesn't care as long as the tax gets paid. When they started the income tax they put the responsibility on the backs of the employers to collect and pay in behalf of the employee. They did this in anticipation of mass non compliance from the individuals. When the money is paid by the company who controls the money it is more likely to be paid than if an individual had to sit down and write a check each week.

 

I have had many dealings with the IRS and with employers such as yourself.

The process of when the IRS finds this is real interesting. I advised my clients accordingly and when the IRS came in, they immediately noted the 1099 employee. It was industry practice at the time and the employers were adamant that they were legal.

You cannot argue the point and explain it to those that do not listen.

End result in all of the cases were the establishment of the employer and employee relationship.

Costs were absorbed by the new employer.

There were penalties assessed. Withholding was back figured on the wages paid. Employer had to come up with the withholding on this.

In addition, the 1099 employee was then structured as a proper employee and wage and hour were instituted.

I really do not care what or how you operate. I only pass information out as prescribed by my license with the IRS.

You can do what ever you want.

You state that the employee should man up when paid this way.

I think the employer should man up after all, you admit they are an employee.

 

I guess I was not clear.

The only way that your situation presented would work, truly is by the "employee" providing the truck and paying for the fuel. Then they are an independant contractor. Otherwise, nothing more than an employee.

 

I never admitted that anyone was an employee. It depends on the circumstances and relationship. I also never mentioned about anyone "manning up." I did mention that people should stand up and take responsibility for themselves and their tax liability. The best thing for the company to do is have the driver sign a contract which lists the responsibilities of each and have stiff penalties if the driver fails to pay his taxes and attempts to shift responsibility to the company. The company should have the right to recover any damages or costs associated with defending themselves in court and to make sure that the driver cannot discharge his responsibilities in a bankruptcy proceeding.

 

Exactly the same comment and attitude my clients had.

Their contract was no better than toilet paper.

 

This argument was a key part of my litigation against Swift.

While Swift at first tried to use the "Independent Contractor" argument, once it was shown that I, as a Lease Operator, was not allowed to opt to my own freight (autonomy) and that I was contracted to haul only freight assigned by Swift, Swift changed stances in the litigation and declared me an "employee under contract". Which then blew up in their face since they hadn't been deducting and remitting their share of SS monies.

Even under a contract, without autonomy to be "independent" of the contracting company, the driver is by Law....not rule or definition of rule....by Law, since everything the IRS states is a "rule" is legislated a Law by Congress, the driver is legally an EMPLOYEE!

 

So, you didn't want to take responsibility for paying your own taxes and got the lawyers to do your fighting for you. You want to be an owner operator as long as you don't have any responsibilities. Why should you pay your own taxes when you can lay the blame on Swift or base it on ignorance of the law. Did you ever pay ANY of your own taxes? It sounds to me as though you were successful in scamming Swift and evading your lawful taxes. Congratulations!! You are now a bona-fide tax evader.

You are confused by the difference between a rule made by the IRS and a law made by Congress. Rules made by the IRS can change on a whim. It is more complex for Congress to change or make new laws. And a IRS rule is NOT a law nor has anything been sanctioned by Congress. There are guidelines for anyone being considered an independent contractor and an employee. It isn't a law. A driver may or may not be considered an employee or independent contractor. It depends on the relationship. There is NO law which defines the difference. There are only guidelines. If it were a law then there would be a statute. It may have been cheaper for Swift to pay your taxes for you rather than pay the lawyers. That is why some lawsuits get settled rather than going to court. Litigation has little to do with right and wrong. In years past, I worked under a 1099 myself. I would NEVER have considered hiring a lawyer to force a company to pay my taxes. I would NEVER have thought about turning them in to the IRS. But then, I take responsibility for myself and pay my own taxes. I have ALWAYS paid my own taxes.