Company Driver 1099

Topic 15574 | Page 1

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Chicon's Comment
member avatar

Hi all, was wondering if any of you are a company driver that gets a 1099 at the end of the year. If so how does your taxes work out? Do you have to pay, do you have enough deductions to break even (Is that possible? ) Looking forward to any advice, comments ect.

Matt M.'s Comment
member avatar

A "company" driver on a 1099 sounds like a miss-classification to me, I'd stay the heck away. I know it happens, but you will pay twice as much in federal taxes and give up workers comp and unemployment rights.

If you are a contractor under a lease or whatever, you have to weigh out if the pay increase is worth the trouble. If you are driving a company truck and can't run whatever loads you want, you are just beine taken advantage of.

TWIC:

Transportation Worker Identification Credential

Truck drivers who regularly pick up from or deliver to the shipping ports will often be required to carry a TWIC card.

Your TWIC is a tamper-resistant biometric card which acts as both your identification in secure areas, as well as an indicator of you having passed the necessary security clearance. TWIC cards are valid for five years. The issuance of TWIC cards is overseen by the Transportation Security Administration and the Department of Homeland Security.

Tractor Man's Comment
member avatar

As a 1099 independent contractor you are responsible to pay "both ends" of your Social Security and Medicare tax. That is 15.65% of your gross income right off the bat. You had better figure a MINIMUM of 15% for Federal and State taxes. In order to avoid interest and penalties (Oh.......the IRS loves those!), you should be making Quarterly Estimated Tax Payments. That is......paying taxes on the money that you estimate you will make in the upcoming quarter.....IN ADVANCE! If you are truly a Company Driver, your Employer is technically, or actually, breaking the law by paying you as an Independent Contractor. You really need to talk to an Accountant, as you can get in DEEP with the IRS in a hurry!

Good Luck!

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
Chicon's Comment
member avatar

As a 1099 independent contractor you are responsible to pay "both ends" of your Social Security and Medicare tax. That is 15.65% of your gross income right off the bat. You had better figure a MINIMUM of 15% for Federal and State taxes. In order to avoid interest and penalties (Oh.......the IRS loves those!), you should be making Quarterly Estimated Tax Payments. That is......paying taxes on the money that you estimate you will make in the upcoming quarter.....IN ADVANCE! If you are truly a Company Driver, your Employer is technically, or actually, breaking the law by paying you as an Independent Contractor. You really need to talk to an Accountant, as you can get in DEEP with the IRS in a hurry!

Good Luck!

Thanks, I don't work for that company, a buddy of mine does, everything they had to offer sounded good (On their website), but then I talked to him and he informed me that it was a 1099 position as a company driver. Of course red flags popped up upon hearing this, that's why I took it straight to truckingtruth.com .thanks again

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
Errol V.'s Comment
member avatar

The 1099 method of being a company driver makes it easy on the company - they just write you a check.

But it will hurt you. As mentioned, you pay all the taxes. (think about coming up with 30% of your total annual pay and writing a check on April 14.) Also, you won't have health insurance unless you buy it without company subsidy. And no workman's comp or unemployment insurance.

I'm not a lawyer, but I believe if a company has its employees on 1099s, they're illegal.

Rick S.'s Comment
member avatar

The 1099 method of being a company driver makes it easy on the company - they just write you a check.

But it will hurt you. As mentioned, you pay all the taxes. (think about coming up with 30% of your total annual pay and writing a check on April 14.) Also, you won't have health insurance unless you buy it without company subsidy. And no workman's comp or unemployment insurance.

I'm not a lawyer, but I believe if a company has its employees on 1099s, they're illegal.

This is correct.

There are companies that have been sued over this, as well as having issues with the IRS and State Labor boards.

The EXCEPTION would be - if the employee signed a contract agreeing to become a CONTRACT EMPLOYEE. This would be the EPITOME OF FOOLISHNESS though.

Lease Ops are subcontractors. Aside from the tax ramifications, contract employees also (usually) don't get health (and other) benefits (as Errol mentions).

Would RUN LIKE HE!! from any employer that offered this - unless the pay offer was SO GOOD - that you could afford to offset the lack of benefits and tax liabilities.

Rick

Marcus K.'s Comment
member avatar

The 1099 method of being a company driver makes it easy on the company - they just write you a check.

But it will hurt you. As mentioned, you pay all the taxes. (think about coming up with 30% of your total annual pay and writing a check on April 14.) Also, you won't have health insurance unless you buy it without company subsidy. And no workman's comp or unemployment insurance.

I'm not a lawyer, but I believe if a company has its employees on 1099s, they're illegal.

As I understand it you pay the 15% , could be higher now, on your net not gross after deductions.... Then you pay regular income tax in your tax bracket to the state or what ever. You have to keep out 40% of what you make to cover the taxes. It is a losing deal if you do not make very good money. I would say average company driver making 1000 a week would want to make 2500 as a 1099 to have the same lifestyle. You have to buy your own work comp and you have no unemployment or health insurance. Your only hope is that your deductions make up a big difference. I am 1099 and the pay seems like it is going to be far less than I am used to. Even with deductions I think i will not make enough to pay my bills and keep any back. I am used to making around 800 to 1200 a week on average as company driver. i will probably make 6 to 800 as 1099. It is a losing deal. As a company driver I can make 1K a week and bring home around 800 of it or a bit less. As 1099 that is most likely going to be take home 500. Plus no benefits. I did it because I needed a job but would never do it if other options were available unless it paid at least half again as much as the same job as company driver.

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