Owning a truck, Hiring a driver

A 1099'r is definitely an option. As long as you don't control how they drive, when to drive etc. etc then it should be good. Line 3 below defines this in the IRS link. Typically employees have to be on the job at a certain time and do the job a certain way. Think call center / forklift driver. OTR drivers have to get A to B and pretty much control everything else in between.

Here's the important IRS line item.

If you can direct or control only the result of the work done -- and not the means and methods of accomplishing the result -- then your workers are probably independent contractors.


Get the load to Charlotte by 3pm Sunday.

 

If the driver is limited as to where he can fuel (i.e. locations where the fuel card you provide him will work), you are controlling the means and methods of how he accomplishes the result.

If you direct the driver where to go for maintenance and repair work, you are controlling the means and methods of how he accomplishes the result.

If you have the governor set to limit the speed the driver can run, you are controlling the means and methods of how he accomplishes the result.

I'm sure if I thought about it some I could come up with a pretty good list of ways even the most free-to-do-as-he-pleases company driver is STILL having the means and methods of how he gets the freight moved between point A & point B controlled by his employer. The likelihood of you driving somebody else's truck and meeting all of the requirements to be LEGALLY paid on 1099 is extremely low. Hell, courts in some states have ruled that OWNER OPERATORS DRIVING THEIR OWN TRUCKS are still "employees" and not "independent contractors" because the company exercised too much control.

 

You tell the driver where to pick up the freight, and deliver it, or where to relay it.

 

ding ding ding!!!, And what has he won Johnny!

 

LOL, hopefully not a 1099 for being a subcontractor. LOL

 

Good one!

 

Guys, this is defined by the state the company is based out of. There is something that carriers that lease O/O's call "Model States". These are states that have change the laws of the states to redefine contractor status as it relates to O/O's. That still doesn't stop the IRS from changing direction on how they view this but at this stage and decades of precedent tell us it is a safe bet the IRS will keep its hands out of it. It is the states you need to worry about.

IL has recently had a couple ruling that make O/O's company drivers in terms of unemployment and workers comp. That is adding over 20% to the cost of having an O/O. Where as in TN they have laws that define that an O/O is an independent contractor. So even if the IRS made a 180 on this, all that would change is that a carrier would have to start withholding and possibly paying SS.

 

A truck O/O under contract to drive/maintain/operate his own truck to haul the company's freight being paid 1099 is completely different than a hired driver who does NOT own the truck and bears NO responsibility for the costs of maintaining or operating the truck.

Nevertheless, you helped make my point. If O/O's are at risk of being classified as "employees", there is no way in hell that a hired driver is going to meet the qualifications for "independent contractor" status and therefore cannot legally be paid by 1099....