Is this a realistic business plan?

So you are going to pay your driver as a contractor? Like as on a 1099?

 

If he doesn't have control of his work schedule, he's an employee. 1099 is for a contractor.

 

I have two issues with this. The first is, I see no way that a driver that you dispatch, drives your truck, and reports to you is able to be listed as a contractor. I know that it is done all the time in the industry but in by the book it does not work. From the IRS website:
You are not an independent contractor if you perform services that can be controlled by an employer (what will be done and how it will be done). This applies even if you are given freedom of action. What matters is that the employer has the legal right to control the details of how the services are performed

I am sure you will get away with it but if your driver smartens up and decides to come after you for your portion of the medicare/social security tax I wouldn't be doing much complaining.

I don't know what your salary range is but for what I am used to, I would never in my dreams be able to hire a contractor as a driver for $770 a week. If he works 50 weeks a year that will be $38,500 in gross earnings. Take off the payroll (15.3% on 92.35% of his earnings and basic taxes (15% after the SS/MC credit 2700 and personal deduction of 8700 and include state tax and he will net around 21,000 a year or $400 a week. Would you take this job?

 

I got my @ $$ in hot water over it with the IRS the driver ended up with a bill for $18,000 for taxes when he called the IRS guess what he told them, yap I was under the bus. That's all it takes, and then I had a audit after all that I owed 3 years back and owed for workmans comp and all it was $42,000 get hit with that when you don't see it coming!!!

 

The short, "nice" version is NO, it is not a realistic business plan.