Category: independent contractor

A Complete Guide to the 1099 Form and W-2 Form

Posted on October 10, 2019 by - 1099 contractor form, 1099 filing, 1099 Form, express truck tax, expresstrucktax, file W-2, independent contractor, owner operator, TaxBandits, W-2 Form, w2 online

How do you know whether or not you need to file W-2 Forms or 1099 Forms for your employees?

It all depends on what role you play in the trucking industry and your drivers’ tax classification.

If you’re an owner-operator or fleet manager, you should determine if new hires are full-time employees or independent contractors from the start.

This will affect what paperwork you need to keep up with to stay compliant.

Here’s everything you need to know about the 1099 Form and W-2 Form.

Trucking Taxes

W-2 Form

The W-2 Form is used to report salary, income with social security, income or Medicare tax withheld, and any compensations offered throughout the tax year.

Employers must file W-2 Forms electronically with the SSA (Social Security Administration) for their employees each year.

In addition, employers must send copies of W-2 Forms to employees so that they can use W-2 information to complete their personal tax returns.

So, if you’re a business owner, who do you need to file W-2 for?

Essentially, employees/drivers will need to receive a W-2 Form if you provided them with income that had social security, income, or Medicare tax withheld.

This means that most company drivers will receive a W-2 Form.

If you’re an independent contractor, you’ll have to cover your end of government expenses. Therefore, you’ll receive a 1099 Form, which is used to report miscellaneous income.

If you’re an agent or commission driver, you might have the “Statutory Driver” box checked on your W-2. Statutory and self-employed drivers should also fill out Schedule C to assess business profit and loss.

The e-filing deadline for filing W2 online is January 31, 2020, but it’s important to understand what classification your employees fall into in order to prepare for various tax deadlines.

1099 Form

If you own a trucking company and hire employees to drive your trucks, you’ll need to file 941, 940, and issue W-2s.

However, if you hire drivers as independent contractors that make more than $600, you’ll need to provide them and the IRS a 1099 Misc. Form.

Independent contractors will then use the information on this 1099 Form to file their tax returns.
If you are just a truck driver driving on your own, or a leased driver, you’ll also need the 1099 Form, which is also known as the 1099 contractor form. 

As a driver, if you own or lease your truck, you could be an independent contractor. Make sure you know your employment classification upon hire.

If you’ve hired independent contractors for your company, you’ll need to complete 1099 filing for them.

Staying Tax Compliant

Keeping up with employer taxes is critical to staying compliant with the IRS and keeping your employees and contractors happy.

Understand whether you need to file W-2 or complete a 1099 filing based on the employment type of your hires.

If you’re still unsure what to file, contact the team at TaxBandits, and they’ll be happy to help.

TaxBandits is an IRS-authorized e-file provider for employer taxes. Use this service to save time on taxes and avoid IRS wait times and penalties.
No matter what forms you need to file, TaxBandits can help you file quickly. Prepare for year-end ahead of time by understanding what you need to file to stay IRS compliant.

What You Need to Know About The W-2 and 1099 Tax Form Deadline!

Posted on January 24, 2019 by - 1099 Employees, 1099 Online, 1099 Tax Form, independent contractor, IRS Form 1099, Subcontractor, Tax deadline, Trucking Business, Trucking Companies

January 31st is right around the corner! You have to make sure your 2019 W-2 and 1099-MISC Forms are ready to file by the IRS deadline.

If your trucking business has employees, you will need to report their wages and tax withheld on IRS Form W-2. Operators using freelance or contracted workers must report all payments using IRS Form 1099-MISC. Many trucking companies get confused about the difference between the W-2 Form and 1099 Tax form. Knowing these differences is critical for trucking business owners. Any mistakes you make could result in IRS fines and extra work for you.

IRS Form 1099 MISC – What You Need to Know

The IRS Form 1099-MISC is used to report miscellaneous payments made during the calendar year. You’ll need to use it for individuals who are not considered employees, such as an independent contractor or subcontractors.
You will need to file Form 1099-MISC if any of the following applies. Note there are also certain incomes you must report as well.
• $600 or more in services, lodging, and other income expenses.
• Each worker you’ve withheld federal income tax from under the backup withholding rules.
• Paid $10 or more in royalties or broker payments instead of tax-exempt interest dividends.
• All gross proceeds to attorneys and other legal consultants.
• Any direct sales of consumer products resulting in an income of $5,000 or more made anywhere that isn’t a permanent retail establishment.
Expenses NOT reported on IRS Form 1099-MISC include:
• All non-reportable payments made to corporations, excluding attorneys and legal consultants. They must receive a Form 1099 – MISC regardless of their corporate status.
• Payments made to foreign governments or tax-exempt organizations in the United States, the District of Columbia, and U.S. possessions.
• Income paid to official employees (This is where the From W-2 comes in).

IRS Form W-2 – What You Need to Know

First of all, what is a W-2? IRS Form W-2 is an annual statement that you must file with the SSA and issue recipient copies to employees. You, the employer, will then use these to report salaries and other payments made during the previous tax year. You will also need to file Form W-2 for each official employee with the SSA (Social Security Administration). This is very important considering your employees use this form to file their personal tax returns. On their recipient copies they will find wages earned, taxes withheld, and additional information needed to complete their yearly tax returns.

Filing late or not filing at all can cost you and your business big time. If you don’t file Form W-2s by the deadline, you must pay a $30 fine for each. After 30 days, this penalty raises to $60 per form with a top fine of $500. That’s in addition to the pressure you will receive from your employees and contractors when they can’t file for their refunds.If you do make a mistake, you can use a W-2 Correction Form W-2c. It would be best if you did this as soon as you discover a form error. You also need to send copies of your corrected W-2 Forms to each employee.

TaxBandits Can Help Your Trucking Business

Tax season isn’t fun for anyone, but it’s even less fun to handle all alone. We specialize in filing 2290s, but our sister product TaxBandits is here for the rest of your trucking company’s tax filing needs!

With a step-by-step interview-style filing process and 100% US-based support, TaxBandits can help you file your IRS Form W-2 or IRS Form 1099 in a matter of moments. They even have print mailing options available to guarantee your recipient copies are received on time. Sign up for your free account today and only pay when you transmit!

Everything You Need to Know 1099 vs. W2

Posted on October 2, 2018 by - 2290, affordable care act, ExpressIRSForms, Form 1099-MISC, Form W-2, Form W-9, independent contractor, IRS, obamacare, owner operator, Personal Tax Extension

Everything You Need to Know 1099 vs. W2

As a fleet owner should you give your drivers a 1099 or W-2 Form? We hear this question a lot from drivers and fleet managers alike. You might think you have a ton of time before the tax season, however, now is the time to get your documents in order. The last thing you want is the IRS on your case about the classification of your drivers.

While we do tend to focus on Form 2290, we understand the personal taxes of a professional truck driver can make a huge difference for both companies and drivers.

Do Your Drivers Need a 1099 or W-2?

Misclassifications continue to be a subject for concern among both companies and drivers, so it is a point that needs particular attention. So how should your fleet approaches classification?

When you bring on a new driver, you should determine if they are a full-time employee or an independent contractor. This should be priority number 1!

This will determine if they will receive a 1099 or W-2. Now, we’ve heard stories from some drivers where companies won’t discuss employee status until tax forms are due, but we suggest clear and open communication with your drivers from the very beginning.

Some fleets might be tempted to put the burden of taxes on drivers and send them a Form 1099, but that route can only be traveled with specific conditions geared towards independent contractors.

My point is that treating a full-time employee as an independent contractor will lead the IRS to your front door. Plus, the IRS get their money one way or another. Might as well keep your classifications kosher. 

Independent Contractor or Company Driver?

The status of your drivers needs to be determined before the hiring process even starts. There are specific guidelines set by the IRS on what classifies as a contractor and which 1099 to file.

If you’re an independent contractor, you will have to cover your end of government expenses, but you also have more choice in how you haul.

Don’t Wait Until The Last Minute

If you have any questions about your business tax forms, contact our sister product, TaxBandits. It is their mission to help your business save time and money this upcoming tax season. Their bilingual support team is available via phone, live chat, and email. Click here to learn more.

Learn More About TaxBandits

We’re Revealing 8 Secrets About Average Owner Operators

Posted on January 11, 2017 by - #TruckingNation, Driving a Truck, healthy truckers, independent contractor, independent trucker, Owner Operators, truck drivers, Trucker, truckers

If you’re thinking about finally taking the leap to become an owner operator in most cases the risk is worth the reward, if done properly. However, if done improperly you could go under pretty quickly and build up a lot of debt. In order to see if the owner operator or independent trucker lifestyle is right for you, we’ve put together a list of common traits found in successful owner operators.

Secrets About The Average Owner Operator

1. Owner operators are financially smart. When the bigger paychecks finally start to roll in they don’t blow it all on a new pool table or jet ski. They set money aside until they can afford that cool stuff later in order to plan for accidents like major truck repairs or for when business is slow. Engine repairs or accidents can set you back quite a ways, so it’s best to be prepared.

2. They’re older guys. I guess some truckers just need to grow up a little first before making the transition to becoming an independent driver instead of a corporate jockey. The average age of truckers for both men and women is about 37 when they become owner operators and the average age of owner operators out there on the road right now is 55.

3. Most are patient and persistent creatures of habit. They’ve lived and driven around the same area for years, and realize that success doesn’t come overnight. You could spend years building your personal business before it really takes off.

Plus, they take care of their trucks with regular maintenance. By squeezing every penny possible out of their rig it will last longer and they won’t have to deal with the major expenses of getting a new one, so don’t skip out on those oil changes, tire rotations, tune-ups, and more.

4. The majority of owner operators are gone most of the time. They put in more hours and spend more nights away from home. More miles put on the road is simply a part of the job if you want to make it. To avoid putting stress on your family and relationships remember to call time or facetime them as much as possible. Hopefully, you won’t feel guilty about missing a few holidays or special occasions too.

5. Now this isn’t a plus, but it is a fact. Most owner operators are unhealthy. They’re obese, they’re smokers, and have issues like high blood pressure. In order to take your business further and have the energy to maintain it get a little healthier. Try to go for healthy snacks like a package of almonds or a heart healthy omelet for breakfast. Maybe see where you can fit in an extra walk around the truck stop or experiment with exercises you can do from your cab.

6. Owner operators tend to be experienced, drivers. They have some education like a high school degree and maybe a little college, but in most cases, they went to driving school and completed their courses. They were determined students who put at least 60 hours of driving training behind the wheel to learn how to drive like a boss. Plus, most owner operators don’t come from average desk jobs, they spend a few years out on the road trucking for companies first.

7. The average owner operator is a planner. They don’t spend down time twiddling their thumbs or checking facebook, they spend it planning their next move. When their freight is being unloaded they’re scheduling a new pick up. Also, they’re always thinking about who they need to call in order to build good relationships and gain repeat customers.

It’s important to check in with the people you regularly work with to show interest and keep spirits high. It’s also important to market yourself to new customers. Either from your office or your cab think about where to go and who to call next instead of going in blind.

8. They answer to almost no one. While owner operators still have to comply with DOT regulations and taxes like the 2290 and IFTA they don’t have managers constantly watching them to make sure they follow every little company policy. They only keep up with their own standards which do involve a high level of professionalism. The fact is they have a nice level of freedom on the open road.

Are You Ready To Become An Owner Operator?

The average owner operator is a hard working person who is financially smart. They’re planners and don’t mind putting in a little extra elbow grease. If you’re ready to take the leap make sure you have a good head on your shoulders for being your own boss and the persistence and patience to make your business successful.

More more trucking tips keep coming back to ExpressTruckTax.com and be sure to share your facts about the average owner operator in the comment section below.