[Copperhead]

I am not convinced that most lose their shirts. I know several companies that lease trucks to carriers and even provide the drivers. Those drivers are W-2 employees, not some 1099 driver kind of thing. IRS frowns on the 1099 for a driver thing.

I could easily do it profitably if I had the motivation to do it. My single truck operation is an LLC with a S Corp tax structure, and the truck is leased on to a carrier. I am an "employee" driver of my own company, and I am the President of the company. Just one truck. I pay myself a weekly W-2 salary. Profits from the company are passed on to me as distributions from my company. And my company even pays for medical insurance for me and the wife (BCBS 5 million dollar coverage policy) and other stuff. I paid myself $3000 in August as a driver ($750 a week irregardless of miles and time off which is average W-2 truck driver salary for my area of the country), and the net profit after payroll and all expenses was $6300. Even paying a W-2 driver $1000 a week would be profitable based on my operation.

It is possible when actually set up and run as a true business instead of some Billy Bob trucking operation. Gman is not way off the reservation as you seem to imply.

[belpre122]

Originally Posted by Copperhead

Gman is not way off the reservation as you seem to imply.

Yes he very much is.....in my opinion.

However Copperhead, you are not, and appear to have a solid business plan. GMAN's business plan is much different and he has lectured the board repeatedly on the beauties of paying drivers on IRS 1099.

Stick around! Let's rev this board back up! Plenty of great info to be given and had.

Good to see you again Copperhead!

[Copperhead]

Ok, I didn't realize that he was doing a 1099 thing on drivers. My bad. That can really be a major headache if the IRS catches on. Fines, penalties, and anything else they can think of when they decide that your drivers are actually employees and not independent contractors eligible for 1099. Just not worth the risk. Just do w-2 payroll, file the taxes on that monthly, and do the estimated taxes on the net when they are due. Nice and neat, easy to stay on top of, and no risk of the IRS Nazis hounding you. One can base the payroll on miles, or a weekly salary with bonus for exceeding a set number of miles. I would choose the latter myself. A good driver will keep doing a good job and be a little happier if they always know there is a minimum they will get, even in a down week. And with a bonus attached for exceeding a base number of miles, they have something to shoot for. Amazing how giddy folks can get when they receive a good bonus check! And not that stupid 1 or 2 cents a mile nonsense. Why major trucking operations haven't figured this out, is the $64K question. And the nice thing is.... on bonus money, they would not have as much taxes taken out, as bonus is not subject to SSI taxes, only regular payroll! Yet another incentive for a driver to do more. What a country!

Regarding the OP question, many fleets take on truck where the driver is either supplied by the truck owner or a company driver is used. Most of Fed Ex ground line haul is done using trucks and drivers leased on from companies. McMullin Bros out of Kansas City, that is all I think they do. Lease trucks on to carriers. They have several trucks on where I have my truck on. They provide the W-2 drivers along with the trucks. I have seen their trucks on with several different carriers.

[belpre122]

Originally Posted by Copperhead

Ok, I didn't realize that he was doing a 1099 thing on drivers. My bad. That can really be a major headache if the IRS catches on. Fines, penalties, and anything else they can think of when they decide that your drivers are actually employees and not independent contractors eligible for 1099. Just not worth the risk. Just do w-2 payroll, file the taxes on that monthly, and do the estimated taxes on the net when they are due. Nice and neat, easy to stay on top of, and no risk of the IRS Nazis hounding you.

Not in the world of our esteemed GMAN. To paraphrase and wrap up his previously expressed thoughts. 'That is your problem, not mine.'

I highly appreciate and admire the drivers that are businessmen and drivers AND really make an honest go of this slippery business.

To put some kid in a truck, straight out of McDonalds and driving school and expect that he will know how to comply with IRS 1099 quarterly payment provisions/etc, is just ludicrous and wrong. When the IRS NAZIs come to the door. These poor fellas don't even know that they have done anything wrong. "I thought it was my paycheck." Is probably the most common refrain.

A bird in the hand is worth two in the bush..............

[belpre122]

Originally Posted by GMAN

I know of one woman who owned over 100 trucks that she had leased to Crete, at one time. She was a doctor.

Still had to have DOT authority. What was the DOT TAG? So we can all look it up?

More GMAN TruckStop bull****

[Copperhead]

Are you sure of that? Why would she have a need of her own DOT authority if the trucks were leased to, and running under Crete's authority? Not disputing, just curious as I have never given it any thought before, and could you provide the regulation(s) that require that, and how it pertains, as a company, like myself is not required to have my own DOT authority while leased on to a carrier. Is this a requirement when one owns and leases above a certain number of trucks?

[JBLogistics]

Ok, I'm fairly a rookie here. I'm trying to learn as fast I can in order to prevent asking so much, but only way to learn! I'm thinking of leasing a truck to a carrier, though I rather the carrier place the driver. What are the "Pro's & Con's"??

*IF I lease the truck to a carrier who's responsible for the insurance?
*Who would pay the driver that the carrier would put to drive the truck?
*Fuel surcharge?
*I assume that I would be responsible of the truck's maintenance even though the truck is being leased to a carrier? ( as I would be the sole owner )
*Anything related to the use, such as tire replacement etc I would be responsible correct?
*Any help would be appreciate it as I've seen some of you have well over 20yrs in the trucking business.

Thank you in advance for all your input!

( I have personal experience in Expedite-Hotshot as a owner-operator with a Sprinter but I see this is slightly different )

[GMAN]

If you buy a truck and lease to a carrier you are responsible for all expenses for that truck. Some carriers help owners find drivers, but the owner of the truck or contractor is responsible for paying the driver, paying workers comp, etc., Your driver and your payroll. If you pay on a W2, then you are responsible for paying part of the driver's social security taxes and filing a report with the IRS along with your check for the taxes collected. If you decide to pay on a 1099, then the driver is responsible for filing and paying his own taxes to the IRS. As far as the truck insurance is concerned, it is the responsibility of the carrier to pay the liability and cargo insurance. However, there are some carriers who may pay a higher percentage to the contractor (owner operator) but charge them with their share of the liability and cargo insurance.

As the owner of the truck, you pay for your own fuel (although the carrier may offer a fuel card program), tires, tow bills, road service, etc., Most of the larger carriers offer tires on their national account, but you could pay about as much on their program as you could do on your own. The larger carriers usually offer fuel discounts if you use their fuel card. That can be a significant savings. Some carriers pay for the base plate and permits. Some will advance the money and take a flat rate from your weekly settlements. Personally, I would prefer having my own base plate. Some carriers also pay your fuel taxes, while others charge those taxes back to the owner operator.

Also, when you lease to a carrier you will be required to furnish your own bobtail or unladen liability insurance. Some offer that through their insurance carrier, but charge the cost back to the owner operator. You will also need to have either an occupational accident policy or workers comp on yourself or whomever is driving the truck. If you want collision insurance, you will need to pay for that, as well. Some carriers offer collision, but you may find it less expensive through your own sources. If you find a carrier to whom you are interested in leasing your equipment, ask them to send a list of what you will be required to pay and what they need for you to qualify. All carriers require that the driver take a drug and alcohol test prior to orientation. That may also be charged back to the owner operator. One other cost is housing for the driver during orientation. You should expect to either have the driver sleep in your truck or pay for a motel. You may also want to consider paying the driver for attending orientation. Some pay their drivers and others do not. Most drivers seem to stay broke, regardless of how much you pay them. It is not uncommon for drivers to need to get money from the owner or company during orientation and even when the drive for you. I would try to keep those advances to a minimum. Good drivers are difficult to find and keep. One piece of advice I would offer anyone considering hiring drivers is to keep a close eye on your expenses and make sure to inspect your equipment regularly. I have had drivers who kept the truck clean enough that you could eat off the floors. I have also had drivers who would trash the truck. Good luck.

[GMAN]

Originally Posted by belpre122

Still had to have DOT authority. What was the DOT TAG? So we can all look it up?

More GMAN TruckStop bull****

She leased to Crete, so she operated under their authority. She did not need her own dot number. I have no idea what a DOT tag is. You don't have DOT authority. You must have motor carrier authority. Once you apply for motor carrier authority you will need to apply for the DOT number. I believe you can now apply for both at the same time. You can look up the DOT number of MC number for Crete with a search on the FMCSA website.

[GMAN]

Originally Posted by Copperhead

Are you sure of that? Why would she have a need of her own DOT authority if the trucks were leased to, and running under Crete's authority? Not disputing, just curious as I have never given it any thought before, and could you provide the regulation(s) that require that, and how it pertains, as a company, like myself is not required to have my own DOT authority while leased on to a carrier. Is this a requirement when one owns and leases above a certain number of trucks?

As I stated above, if you lease your equipment to a carrier you are not required to have your own DOT number since you are operating under their authority. It doesn't matter whether you have a single truck or several hundred. I also know of another company where the owner leased all of his trucks to US Xpress. As I recall, he owned more than 100 trucks. I think that he was an executive with the company prior to going out on his own. If you decide to get your own authority then you will need to get your own DOT number. The feds are trying to get rid of the MC numbers. But, as of now, if you want to operate class 8 trucks under your own name, you will need to have your own authority and insurance.