Deducting The Percentage The Company Keeps?

You are contracted through a carrier, at the end of the year (well, beginning of following year) you receive a 1099, it should list a gross amount, it will NOT be just the $ amount deposited to your account, there are goimg to be a few things to tease out from that.

IF they operate such that you buy fuel through them, do trailer rent or other deductions it should be broken down which is where, it is YOUR job to figure it all out.

Example bbr gets a 1099 for 1 week of work

He is paid 8000$
Gross was 10000$

Deductions
-1000$ in fuel
-300 $ in plates/prepass
-700 $ in trailer rent

Paycheck 8000.

At tax time, that full 10,000 is on the 1099.

YOUR SCENARIO

12000 gross, 8000 pay setlement

Deductions
-1000$ in fuel
-300 $ in plates/prepass
-700 $ in trailer rent
-2000$ in carrier percent of load fees

At tax time, the 1099 will quite likely show 12,000$

Come filing time, it will be reflected in your operational cost as deducted from income the same as fuel before you really get to work on the taxes. In the end, its a wash, bbr made no more taxable income though his gross 1099 was higher in your preferred option.

This is NOT how most carriers operate, as they on THEIR end would have to say their gross receipts show 12000 from customers, disbursement of 12000 to contractors and then a carrier fee charged to the contractor at 2000$. That is a stupid and unlikely way to have the books set up. But the world is full of work harder not smarter people, so im sure at least one person does it.

 

Wow.....someone that understands taxes and accounting posting on this forum. THANK YOU! Unfortunately, so many of the know it all's on this thread will tell you, "ITS A WRITE OFF", or that they made " $20,000 in profit" last week. They will not understand what you just posted.