Question:
I just started driving for a company that does not take taxes out of my pay. Are there any tax programs that would help me maitain my own deductions?
Also os there a standard list of deductions that I could use as a guide line? We have Quicken installed in our computer, but it does not have anything regarding 1099 forms.
Thanks in advance, Whiskeyman.

Answer:

FIRST...run don't walk to the company and QUIT!
What your company is doing is illegal. That being said, how much other things are they doing illegal, and how much are they going to require you to do illegal?
Since you are not going to take my advice, I will try to give you some more.
When you file your taxes you will owe the Federal Government about 30% or more in taxes. And then you will owe your state a sizeable chunk too.
Then there will be the penalties and interest too. All in all about 50% of what you make will be owed in taxes.
You can deduct for the standard meal alowance, and all other deductable expenses.
Some where back in the arcives there are lists of deductions. If that fails go to my web site and go thru there and we can send you a list of deductions.
To save some money you must pay estimated quarterly taxes to the IRS and State.
Good luck
russell

Answer:

First off, why is this illegal?
If it is, then why does the IRS have a 1099 form? I was under the impression that many companies do this if there is a 1099 system of filing.
I am looking for a program to help me keep track of the deductions and taxes I need to pay whether its quarterly or not.
Second question, why will I have penalties or interest if I follow the 1099 guidelines?
What is the 1099 form for then if it is illegal???
I guess I don't get it!
Whiskeyman

Answer:

Rus,
First off I agree that taxes should be withheld, futa, muta, etc. We do it!!
But.......Last year there was a ruling in Ohio against the IRS in a case like this. It was past practice and the driver signed an independent contractor agreement. Therefore, the driver could continue to work under a 1099.
Now, with that being said, the days of the 1099 driver are over. The driver who works under such terms is usually of a "lesser" quality, or has something to hide and doesn't want to be found. Unfortunately, many drivers think they're making so much more with no deductions and have no idea how much an employer has to pay to keep him on the payrole. You should break it down sometime, Russ. Just maybe more people would be informed exactly what costs are paid by an employer and just how expensive it is.
HJ
Tries to do things right -- but we still use per diem

Answer:

There seems to be some misunderstanding of exactly what a 1099 is. A 1099 is a statement of earnings for an independent contractor, or owner-operator. If you are a company employee, you should be getting a W-2 at the end of the year that shows your earnings for the year. If you are a company driver and have worked for three companies during the year, then you should get three W-2s sometime in January, one from each company.
The 1099 works the same way for owner-operators. It is merely a statement of earnings.
Now, about deductions, if you were an owner-operator, you would show all deductions on Schedule C, which is also a year-end profit and loss statement. For company drivers who have legitimate deductions, you would use another "schedule" form. I believe it’s Schedule A.
But Russ is right on target. The company is violating federal law if it doesn’t deduct payroll taxes from you. Generally, if you are driving a car but you don’t own the car, then you should not have anything to do with a 1099. I'm not aware of the situation in Ohio that HonesttJohn referred to,but if I were a company driver, I wold not work for someone who didn't report my taxes. I wold not work under independent contractor status (1099).

Answer:

Why would I not want to work for these people?
Why can't I drive their car as an independent contractor?
Why would I not want to use a 1099 form?
You are telling me YOU wouldn't but I don't see any reasons why???
I'm not looking for advice, I'm looking for information...
Anybody got answers out there? Or just opinions...
Whiskeyman

Answer:

I don't know what happened to the answer I put on here just before your last post...I will just let it go.
You don't need answers, you are going to do as you please any way.
Buy "THE carERS HELPER" and you will know more than any one else.
Check the "search" and you will find this is not a new subject.
russ

Answer:

I thought this was the tax forum and I also thought you were the "moderator" Russ....
Well apparently both are useless.
This forum has provided me with no help on this matter and as for you Russ, well, I am disappointed.
You say you lost a post that had the answers I need...how convenient. If you did have answers and REALLY "lost" the post, you could have re-posted it. But it seems to me you don't have answers , only sarcasm, or, you don't care to help, or, you're not able to. In any event, thanks for nothing.
I'm wasting my time here,
Whiskeyman

Answer:

Whiskey .... first, Russ is in business to provide information, for a FEE. He donates his time and experetise to all of us in an attempt to debunk some of the myths.
All the posters above have pretty well confirmed his information to be correct.
The fact is, as an EMPLOYEE, you cannot be legally paid on a 1099 form. If YOU choose to place yourself in business and lease or sell your driving services, then you could be paid that way. But you would be legally working for WHISKEYMAN DRIVER SERVICES, not ABC Freight. (Something many drivers do, working for different servises, such as Ryder. Who, by the way, pay their taxes. But the caring company does not hire them.)
As for actual points of the law, I don't know them, perhaps Russ does. But why should he provide a thesis on the subject when he can accurately state the company you are presently WORKING FOR under a 1099 is engaged in an activity that is illegal.
Monty

Answer:

Wh1skeyman:
Let me try... FIRST, what the others are trying to say is that the IRS codes state that if you do not own the car and they tell you what to do, (the dispatch system giving you loads, even if you can turn down a load for another) you are a 'regular' employee of that company and you should be paid with taxes withheld. This income would be reported on a W-2 at the end of the year which would show income and the various taxes and other deductions withheld. This form is probably what you have recieved for all of you working life. There are companies that do not do this and pay you the way you've stated you are being paid. They 'get away' with it as long as the IRS doesn't realize what's going on or till someone complains. That still doesn't make it legally right though.
The 1099 you referenced is NOT a form that you as a taxpayer would use to file a tax return, thus it is not referenced in Quicken. The 1099 is the form that companies such as yours, use to report to the IRS how much money you earned from them and indicates that there were no taxes withheld. They also send you a copy for you to use in the preperation of your taxes. You still use a 1040 and its' supporting forms and schedules, in your case primarily a schedule C indicating that you are self employed. (As a side note, the one way you would need to use a 1099 would be if you as a self employed person, had someone else work for you who was not actually an employee of yours. You would then issue a 1099 to him to report his earnings to the IRS and him.)
As for a standard list of deductions (that you would use on your schedule C) there's a basic rule that ANYTHING you spend that is an ordinary and necessary expense related to earning your income, is a deductible expense. To name a FEW, meals, car expenses including fuel, maintainence, and repairs, maps, job related phone calls, etc... There are many caring software programs that can help you with this or you could contact a tax practictioner who specializes in caring returns. There are links to those software programs available through the home page for Here.
The point that was trying to be made is simply this, generally, if you do not own the car and the company is not withholding taxes from your paychecks, you will probably have a greater tax bill for the year because the company is not paying 'their share,' you pay it for them. That's somewhat of a simplification, but without a much longer explanation, it gets to the point. I don't want to put words in Russ's mouth, but I think what he's trying to get at is that he is tired of seeing drivers screwed because they don't understand the tax laws and as a result SOME (definitely not all) companies take advantage of them.
I hope this helps. If you wish you may contact me if there's anything you don't understand. My e-mail address is listed on my profile.

Answer:

1eskimo, you is good. I vote for you for president.
Yes, I am sick and tired of a system that lets companies rip off carers.
I could make many excuses for my attitude at this time. But the truth is I just need to look up instead of down.
I will be out of town until next Tuesday.
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HAPPY MOTORING AND I WILL...SEE YOU AT THE TOP.
russell

Answer:

whiskey , you may want to check out the "INCOME TAX" post i started. some will argue with me about the content ; but read and then make an informed decision. don't stop reading with my suggestion, do other research on your own ,that way you will be able to use advice given by anyone to your best interest.