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Jagerbomber
Joined: 20 Sep 2005
Posts: 645
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| Posted: Tue Mar 18, 2008 3:53 pm Post subject: filing taxes with a 1099 |
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| I am looking at a job running for an owner operator that has several trucks leased onto a company. He is a contractor for said company so i suppose i would be a sub contractor for him...I'm not to crazy about having to keep up with my own taxes like that and not even sure how that whole deal works. Seems like a good job but i dont like that part....how does the whole 1099 deal work when you are contracted out under an owner? |
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BanditsCousin
Joined: 05 Jun 2004
Posts: 3337
Location: Chicago, IL
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| Posted: Tue Mar 18, 2008 4:17 pm Post subject: |
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| You can hide more expenses and pay less tax :lol: |
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Rev.Vassago
Joined: 04 Apr 2006
Posts: 6230
Location: The other side of the coin
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| Posted: Tue Mar 18, 2008 4:44 pm Post subject: Re: filing taxes with a 1099 |
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Jagerbomber wrote: I am looking at a job running for an owner operator that has several trucks leased onto a company. He is a contractor for said company so i suppose i would be a sub contractor for him...I'm not to crazy about having to keep up with my own taxes like that and not even sure how that whole deal works. Seems like a good job but i dont like that part....how does the whole 1099 deal work when you are contracted out under an owner?
Not only are you not a contractor, but your tax burden will be a lot higher from being paid with a 1099. The only person it would benefit would be your employer - the owner operator who is getting out of paying all the employment taxes. |
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BanditsCousin
Joined: 05 Jun 2004
Posts: 3337
Location: Chicago, IL
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| Posted: Tue Mar 18, 2008 4:58 pm Post subject: |
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| True. Your self employment tax will be double what you'd be paying if you were an employee. |
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Jagerbomber
Joined: 20 Sep 2005
Posts: 645
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| Posted: Tue Mar 18, 2008 4:59 pm Post subject: |
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| Thats the thing i am kinda confused with.. He has the trucks leased onto the company. I will be driving his truck but i have to fill out the companies application and go through their orientation. In a sense its like I would work for that company but drive his trucks. The higher tax burden was something i thought i had heard before. I am just not sure how that whole deal works. Not sure if i am crazy about the idea....I was kinda confused on how i could be a contractor when all I am doing is driving his stuff. Seems like an all around good job except for that fact. He pays good percentage and its home every day...but that 1099 thing, i just dont think i like it. |
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BanditsCousin
Joined: 05 Jun 2004
Posts: 3337
Location: Chicago, IL
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| Posted: Tue Mar 18, 2008 5:02 pm Post subject: |
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You'd have to get an earnings prospectie to see if its worth in at tax time. If you make much more than a company driver, the higher tax rate could equal out at some point and start working o your advantage.
What does this said carrier pay, and what is he paying? |
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Jagerbomber
Joined: 20 Sep 2005
Posts: 645
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| Posted: Tue Mar 18, 2008 5:07 pm Post subject: |
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| well he pays 50% of revenue to the truck after fuel. He showed me a pretty good stack of pay statements and all showing what the truck was grossing before and after fuel. It looked like for the most part I would take anywhere from 800 to 1000 a week .....before our lovely government gets its cut. That number sounded pretty good to me until he mentioned the 1099 deal. I talked to him on the phone for a bit then went out to his place to grab the application and thats when he popped that 1099 on me. Not sure if i want that trouble. |
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BanditsCousin
Joined: 05 Jun 2004
Posts: 3337
Location: Chicago, IL
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| Posted: Tue Mar 18, 2008 5:13 pm Post subject: |
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| At 50K a year, expect to pay 25-30% in income taxes. I'm sure someone else here can give you a better approximation. But on my generic model, you'd be clearing 35 a year. Havig a house, dependents, kids, etc can change that for the better. |
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Rev.Vassago
Joined: 04 Apr 2006
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Location: The other side of the coin
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| Posted: Tue Mar 18, 2008 5:49 pm Post subject: |
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BanditsCousin wrote: At 50K a year, expect to pay 25-30% in income taxes.
That's about right, assuming no deductions. Since he'd be an employee, the only real deduction he would have related to the trucking business would be the standard meal deduction. My taxes were about 26% of my 1099 income before deductions. After deductions, they were about 2%. But I'm just that good. |
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BanditsCousin
Joined: 05 Jun 2004
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Location: Chicago, IL
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| Posted: Tue Mar 18, 2008 5:54 pm Post subject: |
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| I think we could start the first CAD pissing match on who made less last year :lol: :lol: |
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Heavy Duty
Joined: 04 Sep 2007
Posts: 144
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| Posted: Tue Mar 18, 2008 6:49 pm Post subject: |
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| You could work for him for a while then when you quit inform the IRS, the will bust him and make him pay his part of SS. It is illegal to work on a 1099 when you are not a real contractor. Ask him if he pays workman's comp. Bet not, you get hurt on the job and you are screwed. |
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no_worries
Joined: 18 Apr 2006
Posts: 862
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| Posted: Tue Mar 18, 2008 7:07 pm Post subject: |
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| Not only is he getting out of employment taxes but, maybe more significantly, workman's comp. You can pay for your own occupational accident coverage (he'll probably require it) but it's nowhere near as good as WC. You can make $800-1000/week as an employee. IMO, it's not worth it to take on the added burden. Not to mention, highly questionable at to the legality in the eyes of the IRS. |
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Jagerbomber
Joined: 20 Sep 2005
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| Posted: Tue Mar 18, 2008 8:26 pm Post subject: |
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Heavy Duty wrote: You could work for him for a while then when you quit inform the IRS, the will bust him and make him pay his part of SS. It is illegal to work on a 1099 when you are not a real contractor. Ask him if he pays workman's comp. Bet not, you get hurt on the job and you are screwed.
The company he is leaded to automaticly pulls payment for workmans comp insurance everyweek...he doesnt even handle the payroll, he just owns the trucks...I dont at all understand how all that works. I am up in the air as to wether or not I am evengoing to turn the application in. Just sounded good on the surface and I need something that gets me home due to the new baby being on the way soon, small towns, not much local work. 1099 sounds like a pain in the rear though. |
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BanditsCousin
Joined: 05 Jun 2004
Posts: 3337
Location: Chicago, IL
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| Posted: Tue Mar 18, 2008 8:59 pm Post subject: |
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| I used to work for an Atlas agent on a 1099 even though I was an employee. |
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no_worries
Joined: 18 Apr 2006
Posts: 862
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| Posted: Wed Mar 19, 2008 12:58 am Post subject: |
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There are only a few states that require WC in the case of independent contractors. Most likely they are covering you with an occupational accident policy. Much cheaper and nowhere near as good of coverage. Might not even be a concern for you, but if so I'd double check what they're providing.
My 2 cents; trying to classify an employee as an IC is all to save the company money. That's rarely good for the employee/IC. But if the money's good enough, why not? |
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