New employee receiving 1099-misc

Yes you are eligible for per diem.

No you do not need to keep any receipts for meals but you do need to document your days away from home.

 

Check with a CPA. I got hit with the new self employment tax last year. Based on income, I owed about $5k. The SE tax added $16k. DO NOT ASSUME ANYTHING!!!

 

I assume you cleared about $125 k ... Good job.

 

The difference in the net pay between 1099 and W2 worker should be the employer half of the 15 percent FICA tax. Income tax is paid by the employee taken out of pay on pay day or end of year. The workers comp insurance would be dependant on the state the employer lives in. In Montana workers comp would run about 17 percent of the gross wages. Seems like a lot but I visited with a driver last week that had twisted his knee on some ice. The knee had some kind of MCL ACL problem but he had no workers comp and would just have to live with it.
If I am wrong with my numbers let me know. Thanks

 

Numbers do not matter anymore. I had a new joint put in at about 61000 flat 14 months ago and just finished about 34000 dollars in heart related and flu related isnurance payments as of end of this month with another 9000 to go.

My numbers after co pay is increasing. But nothing I cannot handle yet.

If I had NO WC, NO insurance no nothing, I probably would have suicided against that 110,000 dollars in medical billing incurred in one year and change already. Life insurance via the executor can make that go bye bye poof.

Either that or BK'ed in court. Which is itself a whole another problem.

 

Per diem and any non-reimbursed expenses related to the job are write-off as I understand it. You don't need to save food receipts...your logbook is your documentation for that. I think they allow 80% of the per diem rate without showing receipts and the current per diem for 2020 is still $66 per day, so 80% of $66 if you are gone the full day in the US....Canada allows a little higher. I assume if you wanted to claim the whole $66 you would need to keep the reciepts for that day but most truckers dont spend that much on food per day.

You DO want to hang onto shower receipts, paid parking receipts if they don't reimburse, any tools or clothing needed for work, cell phone you are allowed to write off a certain percentage (cant remember what it is). It might worthwhile to hire a trucker CPA. You are going to want to set aside 20% at least of each settlement for taxes.

I hope they are paying you a little bit better rate than a W2 company driver would be getting because you DO have a higher effective tax burden as a 1099'er and a lot of outfits realize they can bait-and-switch un-assuming drivers into responsibility for 100% of the tax burden while working for typical company driver wages and leaving quite a bit of extra money in their own pocket. That is why the whole 1099 thing gets a bad reputation.

 

so after going through my 1st year of owner op leased on, lookin at getting a 2nd truck, according to my accountant i was advised, while im growing my business, to 1099 out my first driver or 2 as it will bankrupt me and end my business expansion plans. now i have someone who is willing to work with me and understands what im trying to do. my accountant claims will be able to get my drivers tax reliability pretty low. and with what i expect to get from my taxes i think at very least i can split my 1099 contract employees liability. does that sound fair? iv been researching and do not want to #### someone over. w-2 employees are in my 5 yr plan. what are your thoughts?

 

If you need to break the law to run your business, maybe you don't need to be in business. If you can't be legal from the get go, simply don't expand until you can.

 

If you are referring to the company out of Charlotte NC area. They pay good and will keep you busy. I cleared $2k some weeks 1300 was a slow week. They were good to me.

I'm in favor of the 1099 deal. I have 5 kids and have to make over $100k to pay in $1k. You get to claim per diem, can't as a company driver unless company pays it. Get to write off business expenses, clothes, boots, cleaning supplies, tools, and from truck.

Even when I work as a w2 I claim exempt and file it at end of year. I earn the money I'll pay IF I owe, NOT in advance.

 

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now that you have parted ways you can get the IRS involved, they can make them pay you back for their part of SS that you paid.