Trucking on a 1099. The real story.

that is totally false I am a company i own 1 truck i have a tax id and have an LLC i work exclusively with 1 customer only 1 1099 and am considered by all authorities a legitimate business it has nothing to do with how many 1099's you get

 

How do you know that? Did the IRS give you a ruling in writing?

 

Yup producers all over the USA vending one entity, Loggers harvesting for one Mill...
Sorry Hurst, I hit the thanks button twice, but I agreed with you before you got your stripes!

 

There is a well established test of ~7 questions that the tax man uses to establish if you are an employee or a contractor. You either pass the test or you don't

 

You can pay yourself on a 1099 from your own company all day long. What you can't do is pay other people who work for your company as a company driver on a 1099. The size of your company does not matter. You are required to pay their workers comp, and the employers share of SS taxes.
care to explain why you don't do this for your employees, or think you don't have to?

 

So, If I run my own MC Authority (small trucking company) and I hire only Owner Operators who have their own truck & trailer. What is the best way for me as a (company) to make profit at the end of the year, when taxes are due? Would I still owe taxes or would I get a refund. Would it be better to issue all my drivers a W2 or a 1099 which is legal/illegal and best bet for me as (company). Thanks guys.

 

if you're hiring owner operators to run under your authority, they get a 1099.

 

http://www.irs.gov/Businesses/Small...ependent-Contractor-Self-Employed-or-Employee

[h=1]Financial Control[/h]

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Financial control refers to facts that show whether or not the business has the right to control the economic aspects of the worker’s job.
The financial control factors fall into the categories of:

• Significant investment
  
• Unreimbursed expenses
  
• Opportunity for profit or loss
  
• Services available to the market
  
• Method of payment

[h=2]Significant investment[/h] An independent contractor often has a significant investment in the equipment he or she uses in working for someone else. However, in many occupations, such as construction, workers spend thousands of dollars on the tools and equipment they use and are still considered to be employees. There are no precise dollar limits that must be met in order to have a significant investment. Furthermore, a significant investment is not necessary for independent contractor status as some types of work simply do not require large expenditures.
[h=2]Unreimbursed expenses[/h] Independent contractors are more likely to have unreimbursed expenses than are employees. Fixed ongoing costs that are incurred regardless of whether work is currently being performed are especially important. However, employees may also incur unreimbursed expenses in connection with the services that they perform for their business.
[h=2]Opportunity for profit or loss[/h] The opportunity to make a profit or loss is another important factor. If a worker has a significant investment in the tools and equipment used and if the worker has unreimbursed expenses, the worker has a greater opportunity to lose money (i.e., their expenses will exceed their income from the work). Having the possibility of incurring a loss indicates that the worker is an independent contractor.
[h=2]Services available to the market[/h] An independent contractor is generally free to seek out business opportunities. Independent contractors often advertise, maintain a visible business location, and are available to work in the relevant market.
[h=2]Method of payment[/h] An employee is generally guaranteed a regular wage amount for an hourly, weekly, or other period of time. This usually indicates that a worker is an employee, even when the wage or salary is supplemented by a commission. An independent contractor is usually paid by a flat fee for the job. However, it is common in some professions, such as law, to pay independent contractors hourly.



[h=1]Behavioral Control[/h]

An employee is generally subject to the business’s instructions about when, where, and how to work. All of the following are examples of types of instructions about how to do work.

• When and where to do the work.
  
• What tools or equipment to use.
  
• What workers to hire or to assist with the work.
  
• Where to purchase supplies and services.
  
• What work must be performed by a specified individual.
  
• What order or sequence to follow when performing the work.
  
  [h=2]Degree of Instruction[/h] Degree of Instruction means that the more detailed the instructions, the more control the business exercises over the worker. More detailed instructions indicate that the worker is an employee. Less detailed instructions reflects less control, indicating that the worker is more likely an independent contractor.
  Note: The amount of instruction needed varies among different jobs. Even if no instructions are given, sufficient behavioral control may exist if the employer has the right to control how the work results are achieved. A business may lack the knowledge to instruct some highly specialized professionals; in other cases, the task may require little or no instruction. The key consideration is whether the business has retained the right to control the details of a worker's performance or instead has given up that right.
  [h=2]Evaluation System[/h] If an evaluation system measures the details of how the work is performed, then these factors would point to an employee.
  If the evaluation system measures just the end result, then this can point to either an independent contractor or an employee.
  [h=2]Training[/h] If the business provides the worker with training on how to do the job, this indicates that the business wants the job done in a particular way. This is strong evidence that the worker is an employee. Periodic or on-going training about procedures and methods is even stronger evidence of an employer-employee relationship. However, independent contractors ordinarily use their own methods.
  
  
  
  [h=1]Type of Relationship[/h] Type of relationship refers to facts that show how the worker and business perceive their relationship to each other.
  The factors, for the type of relationship between two parties, generally fall into the categories of:
  
  • Written contracts
    
  • Employee benefits
    
  • Permanency of the relationship
    
  • Services provided as key activity of the business
  [h=2]Written Contracts[/h] Although a contract may state that the worker is an employee or an independent contractor, this is not sufficient to determine the worker’s status. The IRS is not required to follow a contract stating that the worker is an independent contractor, responsible for paying his or her own self employment tax. How the parties work together determines whether the worker is an employee or an independent contractor.
  [h=2]Employee Benefits[/h] Employee benefits include things like insurance, pension plans, paid vacation, sick days, and disability insurance. Businesses generally do not grant these benefits to independent contractors. However, the lack of these types of benefits does not necessarily mean the worker is an independent contractor.
  [h=2]Permanency of the Relationship[/h] If you hire a worker with the expectation that the relationship will continue indefinitely, rather than for a specific project or period, this is generally considered evidence that the intent was to create an employer-employee relationship.
  [h=2]Services Provided as Key Activity of the Business[/h] If a worker provides services that are a key aspect of the business, it is more likely that the business will have the right to direct and control his or her activities. For example, if a law firm hires an attorney, it is likely that it will present the attorney’s work as its own and would have the right to control or direct that work. This would indicate an employer-employee relationship.
  
  
  

 

Wow ... so much BS.

Been there with the IRS and not worried about it.

paying a driver under a 1099 is legal. there is no illegality involved UNTIL you start telling them how to drive, how to load and unload and how to do other things that are part of their CDL (qualification to drive). ME as an employer have contracted four drivers (three primary and one temp) to do a job as a driver. I can tell them what to pick up and don't (that to me is a decision they can make because they are adults and want to make money too) but that's about it. I contracted with them to do this job, meaning that they are under contract to fulfil the needed work to service a customer with the restrictions that the customer must use a carrier that has drivers who have CDLs.

IF you got screwed by being paid under the 1099 rules, then that's too bad, you are totally responsible as an independent contractor to pay the taxes and the other fees. BUT if you want to see a change in this industry, there will be a lot of unemployed drivers out there because a lot of owners like me do not want employees to deal with even if they are making us money.

By the way, been audited a few times, the IRS could care less who pays what as long as the taxes are paid in full and on time.

 

ok i think i found what ive been looking for...guys that know trucking and what they are talking about and why,,,and also CARE....first off...i know im the type of guy/driver old school guys loath...im new and green just got my cdl and dont know ####..plus i drive a automatic that is speed limited. so i will be blunt honest...even though people are cruel and just looking to rip on you ect ect...i wont tell my life story or expect sympathy but i have a long record and didnt even work for years.....well after going through drug and alcohol abuse jail time and divorces..i decided to clean up and change my ways..no BS a whole life changing experience..the whole 9..stopped drinking smoking and everything else...got a job and wanted to pursue driving...washed dishes saved up and went to CDL school...of course not many places would touch me....out of Chicago so had a few companies so described in this thread that were willing to hire me...so i have a tax ID and a business account..getting paid on a 1099....i am on paper logs...should i just quit before i get in trouble? these guys make me run illegal..if i want to get miles.they make me pay 165$ in "occupational insurance" but wont give me info on it nor copies of the papers i signed..a lot of people tell me to not work here(on the other threads ) yes i am grown but need a job and need experience ...where do you learn if you dont drive?who will tell you if you dont ask? then there are so many people giving advice..most of it wrong and opinionated....instead of waiting a year should i pay taxes quarterly and should i get with a cpa right away? im making .42 cpm....should i ask for more? should i just leave? should i get those copies and still confused if it is legal or illegal to work this way...i read the whole thread