Owner Operators having difficulty finding drivers.

Same as a w2 running someone elses truck... But 1099 can take per diem

 

Most would consider 70cpm a joke on a 1099. You'd have no qualms taking a 1099 @70 vs company driver full Benny package @50c?

Lets see some numbers then. I was over estimating by a bit you were under grossly under estimating. 100k w2 does not equal 120 1099. Hell will freeze 1st

 

Ok so wheres the money going? For 120k 1099 vs 100k w2...
Both pay same federal state and local rates. Ofcourse 120k pays more becaise its well 20k more than 100k...

The major difference is social security tax. W2 pays 7.5 while emplorer pays the other 7.5% while the 1099 pays full 15%.... So xtra 7500..

Healh insurance and 401k/ retirement is not required by w2 employer and good chance you have to pay out of your earnings. You can do same basic thing off of your 1099 earnings... But lets just give w2 10k advantage here because you usualy get employer contribution of about 3% to ur 401k and your contibution and health insurance that is deducted is tax excempt.

7500 + 10000 is 17,500 now add in a about 2500 gor additional tax that 120k eill pay simply because its more than 100k....
20k...

120k 1099 is basically equivalent to 100k w2...

Now 1099 can take deductions and itemize. Everything to meals for an entire year... To anything you buy as a w2 and use for work but cant get a tax deduction... Basically get ur per diem back.. This closes that 20k gap even more.... But we will not count it for simplicity sake.

As well as you dont have tax deductions taken out every check.. All those tax money can be put in a intrest bearing acccount collecting intrest untill tax day . while a w2 can not and goverment gets the intrest earned...

You yound healthy and dont need insurance... Even mote savings as a 1099....

 

How much does the IRS charge you when you get audited as a 1099 and they classify you as a W-2? Additionally, you never need health insurance until you need it, but by then it's too late. Wasn't there a workman's comp insurance, or something like that as well?

 

Nothing..if they determine the company that is paying miss classified you. The company will pay the fines aswell as both portions of the ss tax that a benifit to the emplee as they will be ordered to be paid back the full 15% lol. Company paying assumes all responsibility for miss classifying...

 

No reason to pay workman comp... If you get iinjured on the job. You can sue the company for miss classifying you and they will be on the line for covering all your benifits that you miss out on. Provided you prove you was missclasified

At that time irs will come in and make a determination. If thry determine you wad miss classified. Than the company like i said will also have to pay you back the 15% in ss tax. Aswell as pay fines from the irs. And all loss incured from not getting workmans comp..

And they wont be able to just file bankruptcy to avoid these things. It will follow them to there death or paid in full.

 

There are some benifits to being educated. Knowledge is power.

 

But i suppose i just screwd my chances of getting this 1099 job. Lol

 

Don’t forget the cost of workers comp.

 

It's the difference between being a business and being an employee...
As an employee, you put in your work, your employer calculates your gross pay deducts all the withholding, and you get what's left.
Then, you pay out your expenses from that.
As a business owner, I collect the full amount, deduct all my expenses, writeoffs, depreciation, etc, essentially everything I can possibly write off as a legitimate business related expense, then I'm taxed on what's left.
The best part is that YOU choose which set of tax rules you want to play by.
Both are legal, both have advantages and disadvantages.
Personally, I like the business side of the rulebook .
To say one isn't legit or it screws the other side isn't accurate.
Do I pay less taxes than most?
Probably.
I've spent years learning the game how it's played, and what flies and what doesn't
And while you're forking out $150 bucks to take your family and a couple friends to a nice dinner, knowing it's coming out of your pocket I'm doing the same thing, discussing business in some fashion during dinner, and writing it off as a business expense.
Which seems more financially astute to you?