Paying a driver on a 1099

Discussion in 'Trucker Taxes and Truck Financing' started by Oscar the KW, Nov 26, 2013.

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  1. kw600

    kw600 Road Train Member

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    He's paying workers comp through his company for me, so yes he can
     
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  3. Roadmedic

    Roadmedic Road Train Member

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    I was audited last year.

    I own the truck. I have a valid lease. I drive the truck.

    They tried to class me over to an employee.

    You do not own the truck. You do not have a lease. You only drive the truck.

    Now, what do you think?


    By the way.

    I am an Enrolled Agent to Practice before the IRS. In the past I have prepared over 200 returns each year before I left the practice full time.

    I am required by the Ethics rules to provide correct information.
     
  4. Oscar the KW

    Oscar the KW Going Tarpless

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    They can't, or I guess they could but it would get denied. That is one of the biggest reasons that companies want to pay on a 1099, so that they don't have to pay the work comp.
     
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  5. kw600

    kw600 Road Train Member

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    I believe everything I read on the Internet. I also own 2 trucks and pay 1099 while being leased to ol swift
     
  6. Shoestring

    Shoestring Light Load Member

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    one of the big things the IRS looks at is if the 1099 has a stake in the game. if they have a chance to make money or lose money.
    If they are driving your truck, using your insurance, your paying fuel, repairs, etc. then they are an employee.
    Forced dispatch, or the ability to choose dispatch. if its forced, then they are an employee.
    If they are leasing the truck from you, paying for their own fuel, repairs, etc then they could be a 1099 contractor. (other factors in this as well)

    Having managed a company that only used IC's for deliveries, I learned what constitutes an IC and what doesn't. its a very thin line, and you had better not cross it. You can get away with it for long time, but, all it takes is 1 person to complain to the IRS about being misclassified and they will come a knocking cause they want their money. oh, and the fines and can get pretty steep. 7 figures or more depending on the amount of drivers misclassified.
     
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  7. luvtotruck

    luvtotruck Road Train Member

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    The Mega doesn't care what you are or who you as long as you get the feeight from point A to point B as fast and safe as possible. END OF Story!

    You have not been caught yet, if you do get caught EVERYTHING You own and something that you don't own will become collateral for the IRS to be paid back for all of the taxes for all of these years that you have been avoiding paying taxes on thee employees. You will get caught sometime! You just need a driver to get mad and start the blabbing! And it goes from there trust me!.

    Like I said above, Swift or no one else cares how you pay your trucks or drivers as long as the freight gets to where it is going safe and on time.

    This fine can be 40% of GROSS income to the business, not an amount picked by the judge or by anyone else, it is on the GROSS income that is the check before all of the expenses are taken out. I don't know anyone who can afford this but yet they think they can avoid the tax GODS as long as possible! Good Luck, I know more about this but I won't go into it here, My previous career was totally 1099 that was all that functioned in it! It is all well when the drivers own equipment is being used, and he is given an opportunity to pick his loads, It is illegal to provide a truck and loads and supply the driver a fuel card then he is a employee there is nothing more that can be argued about it.
     
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  8. CondoCruiser

    CondoCruiser The Legend

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    Here's the IRS training manual in regards to the topic.

    http://www.irs.gov/pub/irs-utl/emporind.pdf

    The only ones you see paying 1099 are small outfits. Why? Because it saves them money. That is not an excuse in the IRS's eyes. It has to be an industry wide standard for starters. Do you see the bigger companies paying 1099? Being a small outfit is not an excuse. Contractors find their own loads. Employees are given direction. Contractors supply their own equipment or tools. Employees use their employers

    The only reason some transportation outfits haven't got busted is they haven't been audited.

    Some of these drivers will be crying if they got hurt or come retirement time.
     
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  9. Blind Driver

    Blind Driver Road Train Member

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    I thin that's how my Mercer contractor get away with it. I am covered by Mercer's workman's comp ;)
     
  10. blairandgretchen

    blairandgretchen Road Train Member

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    Sounds like my signature!!

    According to Kevin Rutherford, there are many grey areas within the IRS rules. This is NOT one of them.

    Paying on a 1099, as road medic says, is like speeding - fine till you get caught.
     
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  11. luvtotruck

    luvtotruck Road Train Member

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    Sooner or later one is going to get caught, either with a twisted ankle on the dock of a shipper or by the feds themselves. I know, I had a driver get in an accident who didn't have commercial insurance on his pick up truck, He was a donified contractor to me, I provided the work he picked and chose what he wanted to do, He had regular home to work insurance and when they asked him what he was doing at the time he said he was working for me, I showed them his contract that stated he had to add my company as one covered and up his insurance to higher coverages I warned him with several written warnings and then he had an accident, his insurance didn't cover it! The accident was not even his fault, And they ended up suing him for that accidents expenses plus several more $1000.00 in damages. This 1099 thing is not something one wants to play with unless the bases are all covered. OK I'm finished with my rant for the night.
     
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