[chris1]

You would lose that argument with the IRS in a heartbeat. Look up the requirements. I see you danced around the un employment issue also. Work comp does not have a limit on the medical payout. Again it's being done to avoid any responsibility for an employee.

[Rev.]

Originally Posted by freebirdrfd

Yes it is. He would be a contracted employee. It's a shame what companies try to do knowing that there are desperate people out here looking for work. :smokin:

Taxes
# The existence of a written contract between an employer and employee does not alter in any way the tax obligations of both the employer and the employee. The employer must undertake appropriate withholding from the salary paid through the contract and ensure that all other payroll taxes are submitted to the IRS, to the state and, where applicable, local tax authorities. In turn, the contract employee must ensure that she pays all income taxes due and owing in each tax year.


Read more: What Is a Contract Employee? | eHow.com What Is a Contract Employee? | eHow.com


LOL. Try again. Totally illegal. O/O is evading taxes.

[GMAN]

Originally Posted by chris1

You would lose that argument with the IRS in a heartbeat. Look up the requirements. I see you danced around the un employment issue also. Work comp does not have a limit on the medical payout. Again it's being done to avoid any responsibility for an employee.

I have spoken with the IRS on several occasions concerning this issue. I don't expect that I would lose the argument. There are guidelines in which a company must follow to insure that the independent contractor is not considered an employee. For the most part, it is a non issue as long as the contractor pays their taxes. It is when the contractor tries to evade paying their taxes that the issue may come up. I never danced around the unemployment issue. I didn't realize that we were discussing unemployment. What is wrong with the worker taking responsibility for themselves? You make it sound like a crime to expect people to take responsibility for themselves. Some people would prefer that to working as an employee.

[Steel Horse Cowboy]

Originally Posted by repete

Thank you!! for the people that say it's legal WRONG! To be a contract or sub-contract worker he needs to have the freedom to make his own business decisions as in where and when goes and what he hauls He as as the driver will be an employee of a contractor.

IT IS 100% LEGAL...... he is paid as a independant contractor, and on a 1099. Nothing worng or illegal about it.

When I worked for the Department of Defense at BAE in Sealy, TX testing out MRAP units, I was paid a 1099 as a IC and it was fine. All you have to do is take out your own taxes, no biggie. I actually paid LESS in taxes than if I was a regular w-2 employee.

Only difference he has from actually being an O/O is he is not responsiable for fixing the truck or making payments.

As for the Rev's post, it all depends on how the O/O he is driving for pays him. If he pays him as a contrator (not EMPLOYEE) and files his earnings at the end of the year on a 1099 then he is no different than any other company out here.
Now if he states on his OWN 1099 that this driver was an EMPLOYEE then he is liable for witholding taxes and such. It's all in wording a filing status. I had 4 drivers for 5 years that I paid as IC drivers and thru a 1099. I never had any problems

[Luzon]

If, while working under a 1099 agreement, the worker had one assigned place to report to work each day and a set time to report there, then the state would probalby have issues with that agreement should the issue be pressed. I was under a 1099 agreement here in Florida while working as a mortgage broker a while back and the nature of the agreement basically said that I had no appointed time to show up at work. I could come and go as I saw fit. Of course production was expected. Anyway, not being under set schedules and locations is the primary defining factor in determining if someone is truly a 1099 contractor or really an employee.

[GMAN]

It is about mostly about control of the worker. In any case, there is nothing illegal about someone deciding to work as an independent contractor. It is done all the time. As an independent contractor there may be some tax advantages that may not be available as an employee. I have always made more running under a 1099 than as a W2 worker. Most commission salesmen are paid with a 1099.

[chris1]

I seriously doubt that you have ever talked to an IRS agent about the legality of calling your driver a contract worker. If your driver chooses to haul loads that pay .90 mile you have no say in it. If he wants to run 500 miles out of route on a 500 mile load you have no say in it. If he wants to idle the truck 24 hours a day you have no say in it. He can operate that truck just as it was his own. The only direction of the contractor that you can control are state/federal laws/regulations pertaining to the job. In this case that would be the FMCSA regulations.
Any clause in a contract that you have is invalid if it contradicts a law/regulation. That's basic contract law.(not truckstop counter)
With all your self proclaimed business acumen you should know that.
You seriously expect people to believe that you pay by 1099 so the driver makes more money and you make less? I doubt that. You do it to lessen your cost's and push it onto the driver instead.

[GMAN]

As I previously stated, I have spoken to the IRS on several occasions concerning this issue. I have no reason to lie about it. You have no idea what you are talking about when it comes to issuing a 1099. Carriers have been doing it for years, as have many other businesses. I never said that I made less by paying a driver more. If someone is an independent contractor there are some deductions that they might be able to take advantage of which could lower their tax bite. By lowering their taxes they could earn more money. It is simple, really. And I don't haul loads for $0.90/mile.

[Rhino]

O man I didn't want all this harsh talk to happen. I was just asking opinions on experience, and how much taxes I should be taking out as a married father of 3, head of household. The O/O says all his drivers are fat, and happy. He gives a 1099 at the end of the year. He was saying that a young driver made 55k and paid only $2,800 due to write offs and receipt saving. They are making good money, and have with him for years.

[chris1]

Originally Posted by GMAN

As I previously stated, I have spoken to the IRS on several occasions concerning this issue. I have no reason to lie about it. And I don't haul loads for $0.90/mile.

I still call BS on the IRS talks. They are precluded by law in giving tax advice. They can only direct you to the the relevant regulation pertaining to your question.
As far as being done for years,if they are audited they will be changed to W2 employees. But i'm sure that you have been audited and praised for illegal classification of workers.
Never said that you yourself hauled .90 mile freight but your "subcontractor" certainly can with no inteference from you.If they really are a subcontractor.
The only reason it's done is for the owner avoiding payroll taxes.