1099 CONTRACTOR IN EXPEDITING | Important Info To Know For Tax Time
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- Опубліковано 28 сер 2024
- When you become a driver in Expediting whether with a fleet owner or as an owner operator you are a 1099 independent contractor. It's important that you are tracking your income & expenses throughout the year so you are able to file your taxes accurately. ✌️❤️ 🚚
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How we track our numbers: • How We Track Our #s w/...
Tax Write Offs: • CAN I WRITE THAT OFF?
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See last paragraph
1099 Required?
A typical question we receive is whether Form 1099-MISC needs be issued to a company/sole proprietorship for hauling freight?
Form 1099-MISC is generally required to be issued to each person to whom you have paid during the year in the course of your trade or business:
• At least $10 in royalties
• At $600 in rents, services, prizes and awards, other income payments, medical and health care payments, crop insurance proceeds, cash payments for fish you purchase from anyone engaged in the trade or business of catching fish, or, generally the cash paid from a notional principal contract to an individual, partnership, or estate
• Any fishing boat proceeds
• Gross proceeds of $600 or more paid to an attorney
• You made direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment
However, there are exceptions, from issuing Form 1099 to the aforementioned list, we will highlight only two (2):
• Generally, payments to a corporation
• Payments for merchandise, telegrams, telephone, freight, storage, and similar items
If you paid a corporation $600 or more to do work for your company, and the payment wasn’t related to medical and health care payments, fish purchases, attorney fees, gross proceeds paid to an attorney, substitute payments in lieu of dividends or tax exempt interest, and payments by a federal executive agency for services then no 1099 needs to be issued.
If you paid an Owner-Operator $600 or more to haul freight for your company then the IRS, under Treasury Regulation §16041-3(c ), determined that NO 1099-MISC needs to be issued, however, household goods hauled by a moving company are not considered freight, thus a 1099-MISC needs to be issued.
Hey Jason, you should make this a pinned or highlighted reply, whatever it is that makes this the first comment people see. Good stuff.
Thank you guys for the details. It’s good to know that there is more to being a 1099 employer then just keeping food receipts. That is all I have been adding up but with some research and possibly hiring a trucker friendly accountant to do my taxes every year, it is great enlightenment.
Thank you guys!! Great info I can add to my research ... love that you two give so much info back to those who are trying to get into the industry!
You guys are dead honesty on how important the numbers are!
Good info. I'm a firm believer in keeping track of those numbers! Be safe you two!😁❤
Hi Jason & Heather! Great subject to cover! ;-) Peace, Love, & Expediting!!
When I owned my machine shop, we used Quick Books because that is what our account was used to. We also paid estimated taxes every 1/4 of the year. I hired a business secretary so that was a big help & we would also tell her at the time of purchase if it was right-off which most items were. I even purchased my Jeep as a company vehicle, then after 5 years when it was depreciated enough, I purchased it from the company for almost book price, I just didn't leave anyone else drive it and I did use it for business usage just about everyday. There are all kind of loops holes like that in the system, so big items for even personal usage I suggest you consult your account. My company employed 11 people on the average, so like you said, we were looking to pay the least amount of taxes possible. We also looked for the most write off's possible too. Sometimes at the end of the year, out account would tell us to spend $20 to $40,000, and we'd buy new equipment called capital expense. Was either that or give a substantial tax payment to the government and get nothing for it. .......... Thumbs up on the videos... This video should give people in any business insight that they have to be cognoscente of taxes every day! Thumbs up on the video. Wishing you good loads and safe driving.
I loved this video!!!
You two are so full of advice and joy keep it up and be careful
Looking great Mrs. Crafty trucker. Mr. Crafty trucker going to be jealous 😊👍
Just one thing I would add, most 1099 folks have to pay taxes quarterly. Jason answered this in a video or in the comments section awhile back and I think the answer was that the penalty for not paying quarterly was way less than the cost of filing quarterly (don't quote me on that, but I think it was something to that effect).
But yeah, this was another great video, love how you guys make such painful topic ... not bad at all really.
@1:35 "1099 Contractors don't get taxes taken out their checks so they are responsible for those taxes at the end of the year AND nobody is required to send them a 1099, but companies will report their 1099 income to the IRS"
I did not know companies don't have to send 1099 contractors a 1099. I did not expect that at all !!! Very good information to know no matter business is involved.
Well thanks guys, hope you all are having a great day.
Happy Pappy we respect your knowledge but this going into every comment and posting this seems a little overkill. Please see other comments where I provide the fact that 1099 issue is not required by a company. While most do it out of courtesy it is not required under Treasury Regulation §16041-3(c )
Hey you two,hope your both doing well,hello from Colorado Springs,CO....please be safe out there you two.
Another great and informative video. Stay safe ✌🧡🚚
nice couples God bless you all happy and safe journey
The shoe box makes sense to me. One shoe box for pay stubs , and tge other for incomes and hand this two shoe boxes to the tax guy
Good informational video. I would think a person would want to track their expenses and income regardless of being in trucking. Sometimes a person can be surprised what they are spending for things they don't need that much.
Absolutely. This is what helps any business cut expenses. Thank you very much sir
Thanks y'all!
Great info for your fellow truckers 💜💜💜
Well Said.. Perfect.
Great video, info,no telling how many never fill yrly tho with 1099s
Another thing to remember is that as self employed, you have to pay the full amount due for Social Security, which normally an employer pays 1/2. Then another thing to consider is if you create too many write offs reducing the amount you claim for taxes, also reduces the amount you pay into Social Security. Then when the day comes to draw SS, the amount paid in will show less, so the return will be less.
Not for freight haulers. Notice the last paragraph
1099 Required?
A typical question we receive is whether Form 1099-MISC needs be issued to a company/sole proprietorship for hauling freight?
Form 1099-MISC is generally required to be issued to each person to whom you have paid during the year in the course of your trade or business:
• At least $10 in royalties
• At $600 in rents, services, prizes and awards, other income payments, medical and health care payments, crop insurance proceeds, cash payments for fish you purchase from anyone engaged in the trade or business of catching fish, or, generally the cash paid from a notional principal contract to an individual, partnership, or estate
• Any fishing boat proceeds
• Gross proceeds of $600 or more paid to an attorney
• You made direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment
However, there are exceptions, from issuing Form 1099 to the aforementioned list, we will highlight only two (2):
• Generally, payments to a corporation
• Payments for merchandise, telegrams, telephone, freight, storage, and similar items
If you paid a corporation $600 or more to do work for your company, and the payment wasn’t related to medical and health care payments, fish purchases, attorney fees, gross proceeds paid to an attorney, substitute payments in lieu of dividends or tax exempt interest, and payments by a federal executive agency for services then no 1099 needs to be issued.
If you paid an Owner-Operator $600 or more to haul freight for your company then the IRS, under Treasury Regulation §16041-3(c ), determined that NO 1099-MISC needs to be issued, however, household goods hauled by a moving company are not considered freight, thus a 1099-MISC needs to be issued.
Happy Pappy invest your money rather than giving to the govt. It’s a much better return on investment than a social security program which may or may not be there for you in 20+ years.
20+ years I may not be here anyways. I just point that out to people, as I look back and see that mine got messed up with past year's filings because I was misadvised. I could be drawing more now if I had filed differently for a bunch of years.
Happy Pappy Yes, of course it all depends on how many working years we have left. 😉👍
Good knowledge thank you all😃
Great video thanks.
Good info!
You guys are so awesome. You always give great content to your videos. I learn something every time I watch one of your videos. I Just started learning about ifta today from one of your videos it seems crazy confusing but im sure the more you do it the better you get at it. Question do people plan their route to maximize money when dealing with ifta rules? Is that possible or would a person drive themselves crazy trying?
ronet177 thank you. It can be confusing till you do it a few. Once you get it, it’s seems like child’s play. We do plan our route based on ifta. It’s easier than it sounds. We will work on a video to show my process. After doing it for a couple months you just learn where to fuel because of past planning
Very informative! This video is going to Help alot of people. Thank you for shedding some light on some areas maybe people didn't know about. Including me. Safe travels my good friends. ✌❤🚛
Not totally true; I know a few expeditors with panther who are W-2 employees. And the IRS stats that a 1099-MISC must provide to any independent contractor who was paid $600 or more by January 31st.
Thanks for the video, Y'all!!
robert palacio I’m curious are they from California. I’ve heard there has been some fuss over drivers hired out of Cali and 1099.
For 1099 issue though does not apply to freight. See last paragraph
1099 Required?
A typical question we receive is whether Form 1099-MISC needs be issued to a company/sole proprietorship for hauling freight?
Form 1099-MISC is generally required to be issued to each person to whom you have paid during the year in the course of your trade or business:
• At least $10 in royalties
• At $600 in rents, services, prizes and awards, other income payments, medical and health care payments, crop insurance proceeds, cash payments for fish you purchase from anyone engaged in the trade or business of catching fish, or, generally the cash paid from a notional principal contract to an individual, partnership, or estate
• Any fishing boat proceeds
• Gross proceeds of $600 or more paid to an attorney
• You made direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment
However, there are exceptions, from issuing Form 1099 to the aforementioned list, we will highlight only two (2):
• Generally, payments to a corporation
• Payments for merchandise, telegrams, telephone, freight, storage, and similar items
If you paid a corporation $600 or more to do work for your company, and the payment wasn’t related to medical and health care payments, fish purchases, attorney fees, gross proceeds paid to an attorney, substitute payments in lieu of dividends or tax exempt interest, and payments by a federal executive agency for services then no 1099 needs to be issued.
If you paid an Owner-Operator $600 or more to haul freight for your company then the IRS, under Treasury Regulation §16041-3(c ), determined that NO 1099-MISC needs to be issued, however, household goods hauled by a moving company are not considered freight, thus a 1099-MISC needs to be issued.
@@modeverything9949 Florida I believe. Garrett G Trucking.
robert palacio interesting. I have heard Florida’s labor board can be very tough as well (not as bad as Cali) as long as fleet owner can keep the fine line between employ/IC it is not required. The biggest issue I believe is fleet owners treating their drivers as employees. Once a fleet owner crosses that line there is no going back. Further that is employment between driver and Garrett. Not Panther who issues 1099 as a courtesy
@@modeverything9949 The biggest issue is fleet owners treating their drivers as contractors, they are not. The fleet owner is a contractor to Panther , lets say, but the driver is a employee of the fleet owner. Look up the rules on IRS, The driver does not have full control of that truck. He or she cant go home when ever they want and stay out for months at a time, you an Jason can because you own the truck. The drivers can't refuse all runs given to him, you can and so can I because we own our trucks. That is a very fine line that ends up hurting the driver, less write offs because he or she doesn't own the truck to write off expenses. Has to pay all their Social Security, no health benefits, the list goes on.
This is right from IRS "You are not an independent contractor if you perform services that can be controlled by an employer (what will be done and how it will be done). This applies even if you are given freedom of action. What matters is that the employer has the legal right to control the details of how the services are performed.
If an employer-employee relationship exists (regardless of what the relationship is called), you are not an independent contractor and your earnings are generally not subject to Self-Employment Tax".
The Employer "Fleet Owner" can tell you "when you do one more run you can go home" or "No you can't dead home this weekend". The driver does not have full control of that truck or business.
mrtenn1 when we drove for a fleet owner we had full control and was never told we had to do something or could not go home. Now some fleet owner do try to control their drivers and that is the line they cross. Once they’ve done that the irs will see that as a employee/employer relationship.
Now we heard something very interesting on Kevin Rutherford’s show the other day. That this way of doing business is actually illegal but the irs does not and has not done much of an enforcing of this. There was a case where 16 drivers sued over being forced to do stuff even though they were IC’s and won. Then the irs came in and retro acted all the taxes that should have be being paid for employee taxes on the company. I am very interested to talk with Kevin about this further.
I use QuickBooks And save every receipt and bank deposit for the year and how they deductions that you can have
Good info
So do you guys use an accountant to submit your figures to the IRS or do you have to do it yourself ? In the UK the tax laws
are changing all the time so it's a no-brainer to do it yourself for what an accountant can save me more than offsets what my accountant charges me ! Enjoy your videos takd care both bill from the uk
Am I right you can pay your taxes every 4 months and that helps you at the end of the year.
Cliff Anders The penalty for not filing quarterly is about $80. We preferred not to do quarterly. The only help it really provides is not having to come up with a big lump sum to pay at the end of the year. I would much rather keep that in our bank account then theirs. As you may know not all drivers are able to manage money that great though so doing quarterly may not be a bad thing for those
Reimbursements are not in taxes as you gave them the receipt they should of cut you another check or gave you cash as if you show it was a expense and they have the receipts then they have the write off as the government can look like you said well panther and these people are saying they paid the same toll hold on there...
Next as my knowledge they are required to give you a 1099. Yes I do keep track of income mostly to double check. Also I save EVERY receipt.
Now my new question I've been told and maybe someone can explain.
I was at a truck stop guy ate his dinner then took a picture of a receipt then ripped up and throw away the receipt he said he keeps it on a drive at home and the IRS will take a pdf/scan of the receipt.
Then lastly I do save receipts but usually I just take the minimum I dont spend 45 a day on food out here.
Mileage is okay, pretty good for a van with per diem, etc but a truck, no. Companies will contact IRS with your 1099 income.
For sure mileage with a van
👍🏼
# 1 thing to know..
Gotta love it when a certain seems-to-be-jealous other "cough cough" expediting youtuber says take my tax advice and dont take tax advice from youtubers,lol, also sounding bitter & little tipsy and slurring words. Rides yalls videos coat tails, man that person needs some help. Person also disables comments for most of the videos that person puts out,tells me that person cant take criticism. sad. God bless and take care. Jealousy is a stinky cologne.
Just curious, does Panther own any tractors? I thought I saw somewhere that Panther was leasing trucks, but was that thru a third party? I know Landstar does not, neither does FedEx Ground.
No they don’t own any trucks
I thought a 1099 was required if any business entity paid you more than $600 in the year
IMHO mileage does not work for vehicles bigger than a passenger van. Itemize vehicle expences
www.govinfo.gov/content/pkg/CFR-2013-title26-vol13/pdf/CFR-2013-title26-vol13-sec1-6041-3.pdf
Normally but money paid for hauling freight they do not.
If you are O/O, yes you are 1099. If you work for a fleet owner, then the fleet owner is the 1099 and you working for the fleet owner, then you are W2. If this was the case then all the megas would pay the company drivers as independents and not have to pay into their Social Security, no disability insurance no benefits. I remember one big company that mis classified their employees as independent and got into major trouble. Just wanted to add this link straight from a lawyers mouth. ua-cam.com/video/4VKOAxx0ptA/v-deo.html
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Make taxation theft again
Agree
Hey do you have to keep physical record of your eld? And bol?
We save our logs every quarter & also keep copies of our BOLs
@@TheCraftyTrucker thanks for the reply
Can a company still pay a per diem to a 1099?
Don’t believe so. Paying per diem would make you an employee we believe
Ugggh TAXES, don't become too successful, someone will want 70% of it.😡
You can’t write off tp?! 😱 lol
Are you able to write off all the dog treats for your babies as a 'business expense' ? 😉
Good question. Since our babies are classified as guard dogs we write off everything for them. Food, treats, vet bills, etc
@@modeverything9949,
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