1099 or employee

i have always preferred being an employee, you do not skip out on paying tax's by paying your tax;s in a lump sum, infact you pay more (you pay full fica), and youre under more scrutiny via the irs. you also have to pay for your own benefits if you even can afford any(is there extrapay for it?).

 

First I would like to thank RoadMedic for pointing me in the right direction. I said I would reply when I had paid for legal advice on this issue. It will be a tad bit wordy but I am just giving the advice to everyone who does not have the money to pay for it. I received two opinions, one from a Tax Attorney and one from a Tax Preparer. BOTH GAVE THE SAME ADVICE! I quoted CondoCruiser, just to lay to bed, a very common myth. I hope I can show in writing, what is in my head, here goes.

1. Very, very seldom does one industries requirements differ from another, concerning 1099's. Construction, Logistics, Hair Salons, Barbershops, Food Courts and so on.
2. As a person that has received a 1099, and has paid ALL TAXES associated with that 1099, you will never be in trouble with the IRS. It is NEVER the persons responsibility that is receiving a 1099, to determine that they need a 1099. ALL RESPONSIBILITY will lye on the person or company ISSUING THE 1099. They will have to prove where they are allowed, by law, to verify that they were correct in issuing a 1099.
3. If you are a driver that is happy where you are, and receiving a 1099, DRIVE ON!
4. If you are a company issuing 1099's to your drivers, and YOU OWN THE EQUIPMENT, PAY FOR THE FUEL AND REPAIRS AND FORBID YOUR DRIVERS TO USE YOUR EQUIPMENT TO HAUL OTHER LOADS FOR YOUR COMPETITION, then you are running your business illegally. You have employees, NOT Independent Contractors. This is why.

a) As an Independent Contractor, you have no right to tell me who I can or can not work for.
b) As an Independent Contractor using your equipment, I can use it as I see fit. As per a) above, I can use your equipment to haul for your competition.
c) As an Independent Contractor, you can not fire me, in less I have breached our contract. (Signing a invalid contract to start with, has no merit in a Court of Law).
d) As an Independent Contractor you have no legal right to tell me how to do my job, PERIOD. You can only tell me what the "End Result" must be.

This list goes on for another 2 pages. It is really simply. If you own it, pay to maintain it and put fuel in it, then the operator of it works for you as an employee. If you own it, pay to maintain it and put fuel in it, then go and get your own contracts to use your own equipment to complete the job, you are an Independent Contractor.

I will give you the same advice that RoadMedic gave me, search 1099 on this forum, then pack a lunch and read hundreds of threads to see what makes sense to you. As far as myself, I am satisfied with the results that I have paid for and this matter is now closed to me. Drive safe!

 

The IRS went through 10 years of taxes tring to find things. all my drivers where on 1099s. nothing illegal about it. Go ahead and take your own advise. Call the irs. The only concern they had in all the years they went through was the amount of gas write offs i had. but after talking with them and showin them the bank records showing other gas purchases not charged to the company and explaining the many trips to repair trucks and them running the mileage and averaging the MPG and the truck i was using they saw that it was all good. And as to why i got the aduit. I made 2.3 million gross 3 years in a row and owed less than 5 grand a year in taxes. they though for sure i was hiding monies and that i was frauding my returns. when they where done the left with out any hard feelings to me and thanked me for being so helpfull.....

as for the comments about a owner telling the driver where to go and what no. lets set that straight. even if you own the truck, the company you are leased to tells you where to go. does that mean that the companies need to start putting us on 1099's does that mean that i am no longer my own company.

Somebody please tell me a job anywhere that someone does not tell someone else what to do. a driver reports to the owner, the owner reports to the company, the companies report to the shipper and receivers, the shippers and receivers report to the stores they sell to. those stores report to the consumers. well all work for someone...........

<<give me my 1099 my paper log and my big hood or pay me to stay home....truckers freedom>>

 

The last auditor tried to make me an employee. I own the truck that is leased.
I choose the freight and when where and times of delivery.

Now that I have the laptop available, I will address the rest.

When the IRS sends auditors out on suspected fraud, these auditors are focused on the pointed issues only. They do not enter into other areas of practice that normal compliance officers deal with. In addition, there are small business compliance officers that focus on the employment issues of business and 1099 payers.

You mention the ONE audit that you had for the area where you live. The audit history I have is for many different regions. I worked at a Nationwide firm. I have run into the employment, 1099 issues many times.

States:
Washington
Minnesota
Texas
Kansas
Missouri
Illinois
Indiana
Delaware
Virginia


Many others were by phone.

So, my experience is based on the many different areas and not where I had one audit.


As for telling you a job that does not tell you what to do. I am leased to a company. It is my choice to pull the freight or just sit. It is my choice when I start the trip, the route, the hours I drive, breaks I take, and when I deliver.

 

Be honest do you make your employee drivers sign bogus lease agreements or set up business entities to be able to pay them on 1099s? I have heard many of the companies that pay on 1099s make drivers do this. Again if YOU own the truck, pay for fuel and repairs the driver is an employee and should be paid on a W-4.

 

Should be but many do not, what most do not understand is that if the IRS rules are not followed the so called truck owner can be held liable for all monies.

 

You are correct in your statement. If you read my earlier post, you will see where I was leaving the next day to go as a 1099er. I was out for three days and decided to talk to the owner concerning the knowledge I had paid for concerning I/C with a 1099 or Employee . He told me to hit the road. Seems like he did not like the idea of me having this knowledge. I will go to my local Court House this Tuesday and file a Warrant in Dept against his company. This was my situation.

1. He owns the truck and trailer.
2. He supplies all the fuel, oil and maintenance items.
3. I have no option to use my skills for anyone except his company.
4. I must park his equipment at his designated location.
5. The list go on forever...........................

Instead of taking my word on this, check out what the IRS has to say concerning this issue. It is real easy. Download this form: View attachment fss8.pdf and fill in the blanks. You do not have to send it to the IRS, but it is the form your would have to use to prove to the IRS what your tax classification would be.

It does not matter if you are the one getting the 1099 or the one giving the 1099. When you get to the end, if you answer "No" to most questions, then your are an employee, if you answer "Yes" to most questions, then you are a Independent Contractor or the company Owner. I answered 95% of the questions with "NO"!

 

Sounds like something Danny Barrett or Skippy's would pull.

 

If only that were the case. In reality the truck owners claim what he paid you all year as an expense, deducts his 30%, and reports the earnings to the IRS. Then you are stuck holding the bag for all income tax owed. All the while you have no unemployment insurance, no health insurance, no worker's comp, and no SS contributions. I really hope the IRS starts to crack down and penalize the companies that do this. It's ridicules, they don't even hide it either. Look how many advertise in the transport section of Craigslist and say in the post "you will not be an employee and will be paid on a 1099."

You should give the IRS a call. I am sure they'd love to hear what he's up to.

 

Cannot get around the deposits for the taxes, SS and Fica. Easy to prove they are liars.