Is there a comprehensive FAQ for being a 1099 Independent Contractor?

The Chicago 1099 outfits do both. Same are paying as much as 55+ cpm. Here in Florida the 1099 companies pay at the most 45cpm. I'd rather be on CPM than percentage as you'll know exactly how much you'll make and they can't cheat you. I have heard of many percentage outfits refusing to show the driver what the freight revenue was.

 

Is that 55cpm on all hub miles driven loaded or empty? If so, you are correct, there is no cheating the driver as he can easily see how many miles he drove that week.
It would be in the owners benefit to run you lots of 250 mile runs paying the driver 55 cpm and him getting 3.00 per mile gross. (short runs pay much more per mile than longer runs.... as an owner operator.... its something like
200 miles 3.00 500 miles 2.00 1200 plus miles 1.80 per mile is what truck makes.

If paying 55 cents per mile, then it would be much more profitable to the owner to run driver short runs.

 

The problem, I see in this discussion, is the fact that it focuses you on the wrong issue. Drivers make ALL the money for a trucking company. Without drivers the companies go broke. Without dispatchers the drivers still can make the company money. Same with safety, same with maintenance, same with payroll, same with HR. Paying by 1099 or W2 is how the government gets paid. Is it worth anything to you the Driver, to have someone withhold your taxes for you. If it is then the W2 is the way to go. If you can do your taxes on your own, then you don't need funds withheld every week. You pay for everything.

An Owner Operator of 1 truck with no other employees makes the highest percentage of the trucks profit. But he has to do a lot of different jobs. If he hires others to do those jobs, his percentage goes down. But his profits may or may not depending on his ability to make more money with the free time.

I am a conservative politically. Writing a check to the IRS four times a year makes me that. Those poor folks on welfare, I feel so sorry for them right up to the day I have to write a check. College should be free. Right up until I have to write a check.

What was the question again?

 

You must not understand how the 1040 works when it comes to self employment tax. You get to deduct 50% of the entire self employment tax on the 1040. You pay the same amount of self employment tax as if you were on a W2.

I prefer to be self employed, way more job security that way!

 

I lost you on some of that you're saying, but I totally agree with the above statement.



When I was driving my truck, it didn't earn nearly gross revenue as much as it does having a driver who doesn't have to watch loadboards, fill out carrier packets , chase money and all the other things that takes away from driving. Not even close. I didn't even realize how much time I spent on that stuff until I got out of drivers seat when my wife got cancer.

There are days when I'll spend 3-5 hrs watching the loadboard and calling on loads, to make sure the driver has a destination to go to next before he gets empty. Many times when he is loaded, he'll call me with how much available deck space he has and weight, and while he is in route, I'll add LTL's onto his load. If he was cpm, he would resent that extra loading/unloading time, but since he is % , those ltls are extra gravy in his pocket as well as mine.

 

I am so very sorry to hear of the Cancer. My grandfather worked in a steel mill and brought home the asbestos to my Aunt and her two children. I pray your wife got better.

 

i believe i know what your looking at. drivers normally pick up and delivery them in groups. that's so they can lower the travel expenses. them normally have a mini van on a tow bar pulling behind one of the shorter piggy backs. it not a real good deal. last i heard they only made the most of .86 cpm. and had to pay for the fuel outta there own pocket. i'm sure someone will be quick to correct me.

 

It has only been 5 weeks since I came off the road..... so far here is actual numbers on how it has played out.
week 1
Gross Revenue 12550
Truck 10% repair/maintenance fund 1255
Fuel 2795.71
Tolls 73.9
Permits 24.15
Total costs/expenses 4148.76
Revenue(12550)-Costs(4148.76) 8401.24
50/50 Split 4200.62 ( his paycheck for 1 week..... we ran team this week as it was his first week with me and I wanted to make sure we were a good fit, he came from averaging 700 a week at usa truck so he loved the first weeks pay of 4200)

week 2
revenue 1800
10% 180
fuel 476.72
tolls 0
additional pay 108
1143.28 Net
679.64 split ( He took most of week off to get his stuff in order as he had been on road for previous 3 weeks with usa truck.. 679 was for 1 day working back on the road )

week 3
Revenue 8200
Maintenance 820 Revenue 8200
tolls 101.94 Expenses 2648.48
fuel 1726.54 Net 5551.52
Total Expenses 2648.48 50/50 split 2775.76 Week 3 dispersement
(2775.76 was his first solo full weeks pay)

Week 4

5300 Revenue
530 10% maintenance
48 fee
1168.79 Fuel
0 Tolls
3553.21
1776.61 Split
( this week we had an axle seal leak 1 day and leveling valve the next which cost us 1 full day of running. He did 2 loads and check was 1776 )

Week 5
Revenue 7525
10% 752.5
Fuel 1305.12
Tolls 0
Net 5467.38
Split 2733.69 50% split
( note.... this is week 5 right now and he will have to fill up 1 more time before his delivery, so check will most likely be approx 2500.00 this week)

He has now been on the road 1 month, and is on his way home to take a week vacation before heading back out. I let him dictate when he wants to run or not. If he wanted to take more than 1 week off, I'd probably run the truck for a week as I'm missing it.

So nut shell....
5 weeks on road total ( 1 week was team, 1 week he only ran 1 day)
he has made 11,930.00 or 2386 average per week.
he and I both are paid on 1099 for the 50/50 split of net revenue and as such, there are no benefits, and we each are responsible for our own taxes.

He says he likes it better than 700 per week with usa ( with benefits and taxes taken out) because he gets to control his pay and have a choice in which loads we pull.

I think I'm being fair with him and we are both definitely reaping the benefits. I worry about when winter comes and the rates are less for flatbed. I do not factor and right now I have paid all the expenses of doing the runs and his12k pay out of pocket because most of the terms are net 30, but just this week, checks have been coming in as the ones a month old mature so it is nice to see the account filling back up. I have approx 29k outstanding owed from brokers ( nothing overdue)

Right now, I'm looking to add a second truck/trailer and possibly even a 3rd because it wouldn't be much harder to keep 3 trucks running than just 1. Any legal ramifications to doing that I could be blindsided with?

My question is...could I still pay them 1099 50/50 percentage or would I have to bring the new drivers in w2 and pay them less to cover my additional costs of workers comp, matching taxes, insurance etc?

 

Ugg cancer is ruthless... sorry for your losses.
On a positive note Thankfully my wife was able to go under the knife in the past few weeks. The cancer tumor was on her adrenal gland 15cm large but completely encapsulated and they feel like they got it all. ( we were expecting a long drawn out fight which is why I put a partner in the truck to begin with)

She currently isn't on radiation or chemo and praying she stays cancer free. I could go back on the road, but won't unless the driver I hired quits.

 

Wow, you're being very fair. That's excellent money he's earning. I noticed you're from Tampa, are you looking for another driver?