Independant contractor

Discussion in 'Trucker Taxes and Truck Financing' started by Ada2d, May 31, 2011.

  1. old-six-pack

    old-six-pack Heavy Load Member

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    if they can hire and fire you you are considered an employee not an independent contractor. I know because i have asked the irs the same things....

    beware of this practice you will be left holding the bag
     
    Last edited by a moderator: Jun 18, 2011
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  3. Les2

    Les2 Road Train Member

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    Huh?

    Bag of what?
     
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  4. lostNfound

    lostNfound Road Train Member

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    I don't know, but it's a brown paper bag and it's on fire on your doorstep.
     
  5. Les2

    Les2 Road Train Member

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    I thought I was supposed to give out goody bags......:biggrin_2552:
     
  6. G/MAN

    G/MAN Road Train Member

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    You can go online and search for IRS forms and find the schedules for the federal taxes. It will give you all the federal taxes that you need to set aside and pay. If you have a local IRS office they may be able to send you to whom you need to talk with concerning any state income taxes. I don't know where you live, but you should be able to go to your state revenue website and find the information you need about any state income taxes. And contrary to what some have stated, it is NOT illegal to pay anyone with a 1099. If it were illegal then the jails would be full of those who pay with a 1099. You will need to use some discipline when it comes to setting money aside for your taxes. It would be good to set aside about 25-30% or so of your gross pay for taxes. Under a 1099, you can deduct any expenses while on the road. Anything you purchase and need for the road is deductible. You don't have the same expenses as an owner operator so you can't deduct equipment payments or any costs associated with running the truck. Even if you pay your own taxes through a 1099, you may still earn more than some who are paid with a W2. I have always preferred paying my own taxes and have paid drivers with a 1099. I have never been fined or arrested for tax evasion. If it were illegal I would probably have been fined or in jail. Neither is the case. About the only difference in paying with a 1099 and a W2 is who writes the check to the IRS. Either way the driver pays the bill. You will pay self employment taxes for your social security. Essentially, you pay the carrier's portion of the social security tax. Depending on your compensation package, there could be little or no difference in money at the end of the year. You may even have more in your pocket with a 1099.
     
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  7. Roadmedic

    Roadmedic Road Train Member

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    You are going to be involved in something that is not legal.

    You are not an independent contractor. You are an unfortunate person being taken advantage of by a person who will not comply with the rules of employee.

    You do not have a choice of when to work, where to run or loads to choose from.

    You are not providing equipment or paying for expenses.

    You have admitted, I am just a truck driver.

    Your situation is nothing more than a company driver.

    Contact the IRS and asked them to look into this.
     
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  8. G/MAN

    G/MAN Road Train Member

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    For those of you who think that paying on a 1099 is illegal, I would appreciate it if you could cite the law.
     
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  9. Roadmedic

    Roadmedic Road Train Member

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    Why don't you cite the law that clearly states it is legal.


    Here is something I previously posted on this.

    Do a search on this and check the IRS site on what constitutes a sub contractor.


    This poster is providing a truck to have driven. The sub contractor is providing only labor of which is restricted to the owner of the truck.

    He is told when to work, what to do and etc. He is an employee who is then subject to employee and employer relationship and workmen's comp and ss taxes.

    After you search and cannot find the link, I will more than gladly show the places where I have posted this in the past.


    Here is the previous posting on this:

    IRS would be a starting point.
    http://www.irs.gov/pub/irs-pdf/p1779.pdf

    Here is a reply made to someone on this before.


    First. You are not a sub contractor. The "company" is not properly handling the payment to the "employee". An illegal transaction to say the least.

    A sub contractor provides their equipment for the operation. You are nothing more than a driver who is using their truck. If the truck dies, you are not responsible to fix it. You cannot take the truck and go somewhere else.

    You do not license the vehicle, nor insure it.

    As an employee, the law requires him to provide the employer share of Social Security and Medicare taxes.

    It also can require the owner to have workmen's compensation insurance. I assure you, he most likely has none since he does not comply with the law.

    Your choice to work for him is not in your best interest.

    Link to a comment on the subject made previously

    http://www.thetruckersreport.com/tru...ee#post1551681
     
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  10. G/MAN

    G/MAN Road Train Member

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    Plenty of people are paid with a 1099. Laws are not written to make things legal. Laws are written for those things which are not legal. Unless there is a law which specifically prohibits something, then it is legal.

    The IRS does have guidelines for determining whether someone should be paid with a 1099 or W2. They have rules, but cannot make laws. Only congress or the legislature can make laws.

    I have spent a lot of time researching this myself. There can sometimes be a fine line between what is considered an employee and an independent contractor. However, there are NO laws that make it illegal to pay someone on a 1099. If you can find a law which makes it illegal to pay with a 1099, then cite it.

    State laws differ when it comes to workers compensation, too. Workers comp has nothing to do with the IRS. Some states will allow companies with fewer than a certain number of employees to be exempt for workers comp. Others will allow companies to substitute an occupational accident policy in lieu of workers comp. If someone is considered a contract worker then it is up to the contractor to provide his own occupational accident policy or workers comp.
     
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  11. Roadmedic

    Roadmedic Road Train Member

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    If you feel you are so right, why don't you contact the IRS and invite them out to review your setup and get their okay?

    Then you can cite the law that makes it legal to them.

    Meanwhile, I will continue to offer the proper advice as required by the IRS.
     
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