MULTIPLE TRUCKS AND DRIVERS

[KAIMIKAZEE]

i'd just paid off my truck and thinking about getting another one.

with the extra truck sitting around i thought about getting my brother in it for now to get experience.

i'm currently leased on to a company and thinking about getting my brother leased on also. But the company won't do payroll for him. so i'll be paying him percentage on my net pay.

how do i report taxes for federal and state (wi)???
what software do you use for your payroll for another driver???

i don't plan on making money off of him. i'm doing it just so he'll get otr experience..

any help would be appreciated....

[GMAN]

If you plan on paying him percentage, you could just 1099 him and use a spreadsheet to do the calculation. There are some software packages specific to the trucking industry. Truckers Helper is one that does payroll based upon percentage, mileage or salary, if I remember correctly.

[tootie04]

first off....dont do it. You are breaking two very important rules....Dont buy a 2nd truck and DONT hire friends or family!!

But if you insist....make sure what your state requires as far as employees are concered. Some states your brother will be an employee and you will need to carry workers comp and pay taxes for him.

This is how it was explained to me....

Your equipment Your employee, His equipment private contractor. You are a private contrator being leased to a company BUT your driver is driving YOUR equipment that makes him YOUR employee in some states.

tootie

[GMAN]

It isn't the states who decide whether one is an employee or independent contractor. It is the IRS. According to what I was told by the IRS, if the owner operator or driver makes his decisions as to where he runs and what he hauls, then he can be considered an independent contractor. It has to do with control. An independent contractor is not under the control of the carrier. An employee is under the physical control of the carrier. The employee has no control as to which loads he carries or where he goes. He is under forced dispatch.

[silvan]

It isn't the states who decide whether one is an employee or independent contractor. It is the IRS. According to what I was told by the IRS, if the owner operator or driver makes his decisions as to where he runs and what he hauls, then he can be considered an independent contractor. It has to do with control. An independent contractor is not under the control of the carrier. An employee is under the physical control of the carrier. The employee has no control as to which loads he carries or where he goes. He is under forced dispatch.

Interesting points GMAN, but I wonder...

First, the company where we're leased has no forced dispatch for employees. They're as free as O/Os to turn down loads, although the company exercises some control due to ownership of the equipment. You must report to terminal X for PM, you must fuel at truckstop Y. It's a little fuzzy.

Second, I played with one of those "are you an employee" things, and I'm an employee. I don't own the equipment, I don't have any direct say in what I do with it (within the bounds of avoiding getting fired, I mean.) I misremember all the tests, and am too pressed for time to go look up what I'm talking about, but the essence of the matter is that I seem to be an employee very clearly. However, like millions of other Americans, I'm a "1099 employee" getting shafted on taxes because my boss is lazy. I could probably file a petition with the IRS to get my situation evaluated, and they could proclaim that I am an employee, and must be paid on a W2 instead of a 1099. However, like millions of other Americans, if I actually do this, I will get canned in 3/5 of a second flat.

Driving for an O/O is a bad deal, but I'm up waaaaay past my bedtime already, and I'll have to try to remember to come back to this thread tomorrow. I'll try to arm myself with specifics next time.

[atrsafety]

When I first started with multiple trucks I was leased to company out of PA. I had 1099'd my driver's as independant contractors, even had them sign a contract. The IRS agent who audited me had a list of 30 common law definitions of employees. To end the story I had to pony up what would have been the social security and medicare withholdings and then was required to pay state and federal unemployment.

Lesson learned once the hard way!

WWW.PayCycle.com will calculate your payroll and tax responsibilities.
produces the reports and makes the deposits for you. Also using this package you can set up direct deposit payrolls.

[GMAN]

There is a fine line in this industry to determine whether someone should be considered an employee or independent contractor. I think everyone should be responsible for sitting down and writing a check to the IRS and states for taxes. Most people don't realize how much tax we actually pay the government. I think that is why it was set up for the employer to be responsible for collecting taxes from people. If we all had to physically sit down and write a check we would probably have a tax revolt in this country. But that is the subject of another thread.

[ThumperS25]

I worked for an owner operator who kept me as an independent contractor. I got to pick my own loads and the like. The truck was payed for however he still took a truck payment of 300 a week. Insurance and workers comp was charged to the truck and taken from what the truck made. He took .05 per mile and set it aside for maintance. Fuel was taken out of the weekly settlement. I got 80% of what was left. He kept 20% It averaged between 1500-2300 depending on the price of the loads. It worked well until he went under by over extending himself in his personal finances and put the truck as calateral on another loan.

[silvan]

Most people don't realize how much tax we actually pay the government. I think that is why it was set up for the employer to be responsible for collecting taxes from people. If we all had to physically sit down and write a check we would probably have a tax revolt in this country. But that is the subject of another thread.

That and most people would just spend all the money, and the IRS would be in collection hell trying to get anybody to pay. My predecessor didn't hold anything back for taxes, and he owes the IRS for three years. He seems to be an idiot. I'm glad he's an idiot though, because that made way for me.

As far as driving for an O/O being a bad deal, I've really concluded it's the worst of both worlds. All the BS of being self-employed, without any of the perks of being self-employed, and all the BS of being a company driver, without any of the perks of being a company driver. I see lots of BS, but no perks.

It's just not a very advantageous position to be in. The only reason I'm here is because this O/O has a sweet dedicated run locked up. I'm home every night, but I pay for it with BS. I might be better off taking a local job with some LTL outfit, if I could get one. Take a number. There are 20,000 drivers with 30+ years of experience around here waiting in line for those jobs. (Give or take.)

It's not an intolerable situation, but my eyes are open, and I realize it's not the sweet cauldron of gravy all the company drivers on these routes seem to think it is.

[GMAN]

There are good and bad points about any job, Silvan. Just like companies, some owner operators are good and others bad. Some will take out taxes and others will not. What most people don't realize is that the employer must essentially match what the employee puts in to Social Security Tax. Some people pay higher compensation to those who elect to be paid with a 1099, which can offset or even mean more money to the employee or contractor. There are advantages to being paid with a 1099. There can also be disadvantages. If you are not a good money manager, the 1099 route is probably not the best way to go. Some people seem to get confused around tax filing time. They think the government is giving them free money. In reality, the government is returning most of the money the employee has sent them for the last year. The difference is that the employee has not had the advantage of receiving interest on the money. If the employee could have invested that same money or even put it into a money market account, he would have had more money coming back to him. When we pay our taxes in advance, such as with income tax, we are allowing the government to use our money without receiving any interest payments from them. Just think about all the interest we have lost over 20 years. Even if we paid the same amount of taxes, we would gain the interest that money could generate over the course of a year. Just something to ponder.

[silvan]

There are good and bad points about any job, Silvan. Just like companies, some owner operators are good and others bad.

True, true, and I'm not in a desperate position here. I'm trying this to see how it all goes over time, and I'm still here. It's working out so far, but it's still not as good of a deal as I used to have as the top man on the totem pole with a good company. I used to think my deal wasn't so good, and this whole thing has been a real reality check for me. I make a lot more now, but if you factor in what my old employer used to pay in taxes, it's only about $80 more a week now for another 20-30 hours, and much more reponsibility. (I used to haul all loads out of the repair shop, and my old boss/mechanic/dispatcher/fleet manager used to look my truck over with a fine toothed comb at least five times a week. I really miss the extra eyeballs.)

(I got laid off, if that story hasn't travelled to the four corners of the world by now. Else I would still be where I used to be, and would have stayed there forever and a day.)

If the employee could have invested that same money or even put it into a money market account, he would have had more money coming back to him.

That much is definitely true, and I'm trying to maximize the opportunity in that. (Though I will have to pay more taxes on the money I earn with my tax money. They get you coming and going, don't they?)

[GMAN]

You may not need to pay more taxes, Silvan. There are a lot of ways to shelter money, such as a Roth IRA, real estate investments, government bonds, T-Bills, etc.,

[yoopr]

I'd wait a bit and see how this HOS Garbage shakes out first

[person]

Gman,
I'm wondering if there is any way at all to have someone under you in any way in CA and not pay his workers compensation especially, and God knows what else. You say that it is the irs, but you have to remember how oppresive CA is and how they can write laws. I would like input on this in case anybody has some facts.

[GMAN]

You are talking about something other than income taxes and Social Security Tax. If you pay workers comp on a driver they will likely be considered an employee. Most states don't require a company to have workers comp unless they have a certain number of employee's. In my state it is 5 employees. Some states may not require it until you have at least 8 employees. I believe North Carolina forces a company to have it with only one employee. I am not sure about California. I know they have been making some changes the last couple of years or so. You may want to check with them or OOIDA to see what they require. You can buy a APP or OPP policy rather than having workers comp in some states, which is basically the same thing, but much less expensive. I usually get one for my drivers through OOIDA for about $140/month. If you 1099 them, you will probably want them to reimburse you for that cost. It will pay the driver about $400 or $500/week, depending on the policy. In addition, it will take care of any hospital or doctors expenses if the driver is injured on the job. It is essentially an accident policy. I had a driver a couple of years ago who slipped and fell from my trailer the first day he started with me. Fortunately, I had this policy on him and they took care of all of the doctor and other expenses. It gives both you and the driver some protection. Workers comp is for employees. If a driver isn't an employee, then he would not be under workers comp. In any case, the APP or OPP policy is a good way to go for both the driver and carrier.

[silvan]

You may not need to pay more taxes, Silvan. There are a lot of ways to shelter money, such as a Roth IRA, real estate investments, government bonds, T-Bills, etc.,

Yeah, I need to get with an accountant, but it costs me $200 to take time off during normal business hours. Blah.

Anyway, I just want to make clear that I'm not accusing anybody here of ripping anyone off, or being bad to work for, or whatever, and not trying to discourage anyone from considering driving for an O/O. I'm making broad statements about a specific situation that isn't necessarily representative of the whole spectrum of possibilities here.

I'm just bitter right now. I hate change, and I hate unpredictability. I stayed at my first job out of school until the day they cut me loose, and I probably never would have driven for anyone else. I've been turning down jobs for years, including the one I have now. I don't want to be here, but I can't go back, because my home is full of Warren trucks now. Bastards.

I'll try to stay out of this now, because I'm not helping the original poster figure out what to do about a second truck.

[tootie04]

You are talking about something other than income taxes and Social Security Tax. If you pay workers comp on a driver they will likely be considered an employee. Most states don't require a company to have workers comp unless they have a certain number of employee's. In my state it is 5 employees. Some states may not require it until you have at least 8 employees. I believe North Carolina forces a company to have it with only one employee. I am not sure about California. I know they have been making some changes the last couple of years or so. You may want to check with them or OOIDA to see what they require. You can buy a APP or OPP policy rather than having workers comp in some states, which is basically the same thing, but much less expensive. I usually get one for my drivers through OOIDA for about $140/month. If you 1099 them, you will probably want them to reimburse you for that cost. It will pay the driver about $400 or $500/week, depending on the policy. In addition, it will take care of any hospital or doctors expenses if the driver is injured on the job. It is essentially an accident policy. I had a driver a couple of years ago who slipped and fell from my trailer the first day he started with me. Fortunately, I had this policy on him and they took care of all of the doctor and other expenses. It gives both you and the driver some protection. Workers comp is for employees. If a driver isn't an employee, then he would not be under workers comp. In any case, the APP or OPP policy is a good way to go for both the driver and carrier.

GMAN you are right NC make ya have it with only one employee.

tootie