Hi all,
Your questions:
rootie
Team drivers just starting, have a tax question.
Hello, I am just getting ready to get into a team driving situation with my roommate. I was contacted by a fleet owner and was told that they pay a % to the truck. I am not sure how to show that when it comes to tax time when I go file. We are not married so we file separately. The fleet owner said it was up to us to divide up the pay. That won't be an issue, but I am not sure how to show it to the IRS.
Any ideas??
Thanks!
08-13-2009,
Poorboy
Senior Member
Join Date: Jan 2009
Re: Team drivers just starting, have a tax question.
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Who is Paying for the Fuel, Tolls, Maintenance, Insurance?
rootie
Re: Team drivers just starting, have a tax question.
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we would be paying for all. 50/50 except maintenance.
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Last edited by rootie; 08-14-2009 at 10:30 AM. Reason: error
08-17-2009, 05:09 PM #4 (permalink)
TSexpediter
Join Date: Jan 2008
Re: Team drivers just starting, have a tax question.
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Even though the owner pays in one settlement, depositing the money in one account, and then you the drivers split the money, the owner has to report that on 2 separate 1099's issued to each one of you 50/50. Make sure you discuss this issue with him. You don't want to end up with an issued 1099 for the entire amount, while the roomate gets nothing.
On a different note: What I advice my team drivers (and actualy I mention it in my contract) is that the drivers should have a contract between themselves. ESPECIALLY when you're not husband/wife team. Issues do come up and the owner cannot control this. You have to come up with a way of splitting the fuel cost, the tolls and all your other expenses. Otherwise you're gonna get into fights like "I paid for fuel last time, it's your turn now" or "I have no money can you pay now".
Just my friendly advice.
Yesterday, 12:44 AM #5 (permalink)
letzrockexpress
Senior Member
Re: Team drivers just starting, have a tax question.
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You could legally form a partnership between you and your roommate. The owner could pay the partnership and you could pay yourselves from the partnership's account. You would avoid any lopsided tax issues this way, assuming you both are adept at handling the checkbook. Your accountant can set this up for you. It's not at all complicated.
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The Cato Institute
Hi again,
You have a number of choices that you can do
1. As letrockexpress mentioned legally form a partnership between you and your roommate. The owner could pay the partnership and you could pay yourselves from the partnership's account. You would avoid any lopsided tax issues this way, assuming you both are adept at handling the checkbook. Your accountant can set this up for you. It's not at all complicated.
FORMING A PARTNERSHIP IS BASICALLY THE SAME AS FORMING A CORPORATION, LLC, "S" AND "C" CORPS.
UNDER A PARTNERSHIP, all aspects of the company have certain problems that you might consider.
# 1 factor you must carry "WORKMENS COMPENSATION" FOR BOTH OF YOU
# 2 You will be responsible for DRAWING A SALARY, EITHER BY SETTING UP A OWNERS DRAW, OR PAYROLL ACCOUNT WHERE WITHHOLDING FED TAX, SOCIAL SECURITY, AND MEDICARE TAXES, AND PAY UNEMPLOYMENT TAXES. ARE TAKEN OUT AND YOU HAVE TO FILE QUARTERLY PAYROLL RETURNS (YOU MUST WITHDRAW $$$ FOR YOUR PERSONAL USE. BY EITHER MEANS.)
IRS PREFERS A PAYROLL ACCOUNT. Also you must file Federal Tax Return form 1065, along with a resident state Partnership return (depending on State.)
Average CPA Cost around $ 400-plus for 1065 only plus you Individual return.
A form K-1 is then generated from the 1065 and reported as income from tha form on your individual federal and state tax return.
There is a possibily of double taxation
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2. Since you are not husband and wife, A 1099 Misc is supposed to be mailed to each of you and all expenses can be split 50/50 on each ones tax return Each person should have his own business checking account for tax purposes. The only items that each one would have besides the 50/50 split would be his own showers, laundry, cell phone, drug screens, dot physicals, plus a few other items. otherwise all the other business expenses are split equally.
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3. Depending on the Owner if he decides to make out only One 1099 MIsc to the Primary Driver, then the one who received it has to make out a !099 Misc to the other person.
ONLY PROBLEM WITH THIS IS THE LATENESS OF THE 1099 ISSUED TO THE SECONDARY PERSON. Still the expenses are split 50/50 except for personal deductions. This would require a written contract between both the primary hiree and the secondary driver.
If you have any additional questions please do not hesitate to ask,
Franklin Katz, ATP, PA, PB Frank's Tax & Business Service, 120 York Rd Kings Mountain, NC 28086-3151
(704) 739-4039
FAX; ( 704) 739-3934
email:
[email protected] web site: [
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Providing Professional Accounting Services and Income Tax Preparation
Circular 230 Disclaimer – Any tax advice in this communication (including any attachments) is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of (1) avoiding tax related penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any transaction or tax-related matters addressed herein.
