Decisions......Decisions..... ?

incorporate,,do it in Nevada online,,you can incorporate in any state, no corp tax in Nevada,,good thing about corp unlike money paid to individuals money paid to corps is not reported to the IRS,, go to the Nevada state dept website,,you can be a corp in one day.

 

I remember reading about the case. I was surprised that they won. There is always some who don't want to take responsibility for themselves and try to push the responsibility on someone else. The IRS has been talking about forcing carriers to treat owner operators as employees and deduct part of their settlements for taxes. I don't see it as being a workable arrangement. If I were leased to a carrier, I would want my money so that I had the funds to run my business.

The carrier to whom you are wanting to lease is trying to protect themselves. As I recall, FedEx required owner operators to incorporate after this case. Being incorporated is not a big deal. In my state, you can incorporate for $100. You usually need to file an annual report and a franchise and excise tax return each year. I pay a minimum tax of $136/year. I would not be concerned about incorporating. There can be some tax advantages to incorporating. If you incorporate it will be the corporation that leased to the carrier instead of you personally.

 

It's not just if you're paid on a 1099 or not, it has to do with how much control the carrier exerts over you.

Do they control your starting time, how you preform your duties, are you required to wear a uniform, or certain logo specific clothing.

Are you allowed to turn down any load? Do you set your own hours? Do you set your own days off?

Who owns the equipment? Is a profit or loss totally up to you?

There is a complete set questions used to determine whether or not a person is an employee or contractor.

Fed Ex failed on several different items.

In my own befuddled mind I feel that any carrier that sweats the issue so bad that they want you to incorperate, is prolly going to try to control you so much that they're worried about getting in trouble about misclassification of employees.

 

I am as surprised as you about the verdict. I don't recall all the details of the lawsuit, but I think the union was most likely behind this. They have a lot to gain by having these owner operators being classified as employees. There have been a few other instances with a similar outcome recently on the west coast. The IRS is out of control. They go after these big companies, because they have deep pockets. They may have had a problem with these owner operators paying their taxes so the easiest way around it is to change their classification and use the carrier to be their collection agent. The carrier takes the owner operators money prior to them receiving it and sends a check to the IRS. The main reason the tax laws required companies to collect the taxes from workers is because the powers that be felt that individuals would not comply with paying their taxes. But, reclassifying an owner operators as an employee is very wrong.

 

In this case, just owning the equipment should have made them an independent contractor. How many employees are required to purchase their own truck?

 

It's more than purchasing a truck.

As I stated there is a list that the IRS and the states use to determine employee or contractor.

All any company has to do is go by the list, it's not hard. Any company that does not want to do so is out to screw over the drivers/employees and the government (read "society" meaninig all of us taxpayers).

 

If I bought a truck and then was considered an employee, I would really be ticked off. If that is the case, then all of these carriers should require drivers to buy their own trucks. It would save the companies a fortune. They would have all these employees who take the risks and make all the capital investment. What a deal.