How do you pay yourself.

Discussion in 'Ask An Owner Operator' started by Highwolf89, Mar 13, 2016.

  1. samjward

    samjward Light Load Member

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    May 20, 2016
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    The IRS is going after 1099 larger and smaller carriers. Watch out, you'll be next for the audit, and if I recall... the penalties are extremely steep. Just do it the right way. S Corp (1-50 trucks), keep all receipts, use an accounting program (don't hire a CPA unless you absolutely need to, such as audit time for example), and save as much money as you can in a reserve bank account. I personally used ADP for payroll for awhile, but didn't like paying additional fees each time I ran a payroll. I now calculate the withholdings myself and pay them each check I write. If it's just you an LLC can also be a good way to incorporate, it just depends on how you plan to grow the company in the long run and how many owners you may have or have already. In the end, don't run 1099, you will get caught if you have other drivers. Basically, if you control where that driver goes, he/she is not a 1099.

    To give you an example:
    I have a friend who is currently running an 8 truck operation. He was using 1099's to pay employees and to not have to pay taxes on their checks. 2 years in and he was stuck with an audit. IRS auditor comes in, looks over paperwork, and he ends up with over $479,000 in liability penalties. This stuff is not a joke, make sure you do everything legally - and keep all receipts. Just my .02
     
    InmanFreight Thanks this.
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