I was wondering if any fellow truckers here know how to file income tax if your paid on 1099-Misc even though you never own a truck? A very good friend of mine drove for a year for a small company and was presented with a 1099-Misc since no taxes were withheld from his bi-weekly pay checks. I know he has to file Schedule-C to show his deductions coz on the paper he operated the truck as if he was the owner. But I can't find any help(without going to to a tax guy) anywhere that states the steps to file 1099-Misc. Has anyone here ever filled taxes based on Driving-1099-Misc and can share steps involved filling year end return.

Much Regards in Advance.

 

The fact that he received a 1099 is all the more reason to see a tax professional.

I would never work as a company driver for any company who isn't withholding. It's illegal anyway, as the job description and duties would show that he is an employee, not to mention it throws the tax burden on the shoulders of the employee, and allows the employer to get out of paying their required employee taxes.

 

You definitely need to see a tax professional. There is more to it than just filing the federal taxes. You may have a self employment tax due, depending on the actual relationship and whether the IRS considers this a contract employment arrangement or not, there may be SSI and Medicare to pay in. For the most part unless you indeed own the truck yourself a truck driver is an employee and as such all taxes must be withheld by the employer or fines may be accessed. Just because an employer says you are contract does not clear you, you the employee are responsible for ensuring that you are classified properly to protect yourself financially at the end of the year. I hope your friend put a LOT of money to the side to pay for taxes!!!!

 

As was mentioned, he's going to be liable for self-employment taxes. The only way to avoid that is to petition the IRS for a change in classification (which he would win) in which case his employer would have to issue a W2. Even in that case he'd still be liable for all his regular taxes, i.e., 7.65% plus all state and fed taxes since, presumably, nothing was withheld. As far as physically filing, he files a 1040 and simply puts the income in the appropriate box. My guess is he's not well-versed in tax filing...tell him to pay a professional.

 

You just put it on the line that says other income. If you use Taxcut or any other program it's just Misc 1099 income.

It's simple, I've been doing it on and off for over 30 years when I did side work for other people.

 

Your friend might want to consider talking with someone such as H & R Block. They won't charge much and will likely do it right. He could always buy one of the tax programs and follow the prompts. Being paid with a 1099 could actually lower your tax bite. I have always preferred being paid with a 1099 when I drove for someone else. I usually managed to pay less in taxes.

 

H&R Block knows NOTHING about the trucking-related deductions.

 

Rev do not be so sure about that. Were I am at the so called best tax prep specalist for OTR truckers just got charged for tax fraud for falsifing tax returns for OTR truckers to maximise their returns. She is looking at 300 years in the PEN and 40 MILLION IN FINES. She also did taxes for alot of the county board should be interesting soon. H&R block on the other hand makes sure that whatever you deduct is legit and will not raise a flag at the IRS of the 2 I would take the safer route and avoid the massive penalties and jail time. By the way I used that same person in 1997 and ended up being AUDITED thanks to her in 1997 cost me an extra 2 grand in taxes thanks to her creative book keeping.

 

GMAN, hate to disagree but I can't see how you'd ever have less tax liability being paid on a 1099. At a bare minimum your liability would be exactly the same as your income is what it is no matter how you're paid. Most likely you'd owe more since your liable for self-employment tax. It is true that your withholdings will be less, but just because you're having less withheld does not mean you're paying less in taxes.

I agree with Rev on the H&R Block. There reputation is far from sterling when it comes to tax prep. That's not to say there aren't individual offices that do a good job, but the company-wide rep isn't great among those in the know. With anything other than a basic 1040 I'd go to a CPA unless you're knowledgeable enough yourself to monitor a tax prep's work.

But hey, that's just one opinion :lol: