1099 legality for driver that picks their own loads and paid % of load?

Discussion in 'Trucker Taxes and Truck Financing' started by PermanentTourist, Apr 8, 2020.

  1. PermanentTourist

    PermanentTourist Medium Load Member

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    I'm looking to hire a driver for my landstar truck, pay them 50% of revenue, and have them book their own loads, pick their own hometime, pretty much do whatever they want. "Dont bother me unless the truck broke down" kinda thing.

    Do I still have to pay them with W2, even though I don't control when and how they work?
    Or can I just direct transfer them their percentage after each load and hit them with that 1099 at the end of the year?
     
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  2. Tb0n3

    Tb0n3 Road Train Member

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    It's an unsettled issue. Many, me included, believe if you don't own the equipment you're an employee (W2).
     
  3. bigdad7

    bigdad7 Road Train Member

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    After fuel and maint your 50% won't be worth much .....
     
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  4. ZVar

    ZVar Road Train Member

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    They likely are a valid 1099. It's always better to ask your lawyer about legal matters though.
    That said IRS has published a guide to help determine that. The main stickler would be you own the tools of the trade (the truck). But that's offset bu you giving him control to choose his loads and such.
    Also, make sure you are running under a contract. No matter what, even if everything is ok, without a contract spelling out the relationship, it's not a valid 1099.

    Here is IRS's website on Employee vs. IC. Independent Contractor (Self-Employed) or Employee? | Internal Revenue Service

    Here is a pdf of the 20 point checklist. https://www.oregon.gov/ODA/shared/D...ces/20FactorTestforIndependentContractors.pdf
     
  5. PermanentTourist

    PermanentTourist Medium Load Member

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    Right, that's what I've been told. I just really prefer 1099 because it's so simple and I can just use zelle or paypal and pay the driver as soon as they get empty.

    I'm not trying to avoid paying the payroll social security tax, I would gladly just pay it to the feds as a lump sum at the end of the year. Just hate to have to run all the withholding math every time I pay the driver.
     
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  6. PermanentTourist

    PermanentTourist Medium Load Member

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    My lawyer? Lol, yeah, I'll have my butler and my personal trainer go get him for me.
     
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  7. PermanentTourist

    PermanentTourist Medium Load Member

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    I'm not looking to be a fat cat monopoly guy capitalist, lol... I'm just stuck with an extra truck and want someone to run it for a couple of years just to break even and cover the payments, so I can at least finish depreciating it.
     
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  8. PermanentTourist

    PermanentTourist Medium Load Member

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    Also, fuel surcharge is not counted in the revenue. Revenue = linehaul -fuel surcharge -landstar 35%
     
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  9. ZVar

    ZVar Road Train Member

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    A lawyer costs $100 to tell you this. If that's too much money you need not put a driver through whatever you are trying to do....
     
  10. PermanentTourist

    PermanentTourist Medium Load Member

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    Fair point. I just always assumed lawyers cost like thousands of dollars and you have to like hire them full time and stuff. Never had to deal with lawyers before, thank god.
     
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