Client has truck that is rented to a truck line company. He is also the driver so he gets a w2 and 1099 misc. Have no problem with the truck rent going to Sch C. Problem is his leased equipment statement has truck rental of $67364( which is what is on the 1099 misc) and deducted out are his wages of $10152.69 which is what is on his w2 Question is since the $10152.69 is included in the 1099 misc per his statement can this amt be deducted from his Sch C and if so would the be listed as comission or what.
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This does not compute.
There are companies that provide drivers with trucks and there are companies that hire owner-operators. Either way, a good driver will make 45-65K. I think that his employer is trying to pull a fast one. They are avoiding payroll taxes for him and themselves by the pretense of renting the rig. If T/P is not willing to go with me to discuss the matter with a Revenue Agent I would ask that he take his business elsewhere. Obviously you will protect his confidentiality and not approach the IRS without his blessing. But if the IRS comes to you then you need a tax lawyer at your side. -
Maybe
[.. I think that his employer is trying to pull a fast one. They are avoiding payroll taxes for him and themselves by the pretense of renting the rig.
But the taxpayer is not avoiding ss tax because the 1099 income listed as rent is going to the Sch C. His lease eqyipment statement for Dec was listed as year to date
1. truck revenue 67364.26
2.minus wages -10152.69
3.minus 19% -1928.91
4.other revenue 85.00
5.escrow interest 36.06
the 85 is listed as nonemployee comp the 67364.26 is listed as rent the 10152.69 is the w2 amt and the 36.06 is on a 1099 int as interest earned. It just looks like if I report the 67364.26 that the wages os 10152.69 is included and he will be taxes twice on this. If I pulled out on his Sch C what would this be listed as.Comment
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Good point
So it looks like both the taxpayer and the government are being shafted. All the more reason why your client should willingly rat them out.Comment
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