Sub contractor or LLC ?

Forum|Forum|4 years ago
September 12, 2021
8 replies
22 views

Hi there

I'm a 1099 company professional Class A driver, every year I file schedule C (expenses & meal ) deductible, I start new job as class A driver and my employer asking me to start LLC with no responsibility, I'll driver their truck, maintenance, fuel they will pay. I did not understand why they asking for LLC ?

Thanks in advance.

Bsch4477

Level 15

An LLC limits your liability to your business and protects your personal assets. You could ask the business that you work for what the advantage is to them.

Critter-3

Level 15

As a single member LLC you are taxed as a sole prop on a Sch C so for you nothing will change if you get an EIN for an LLC ... as to why they require it ... probably so that they can avoid the IRS employee rules and thus avoid paying you as an employee... this is an end run around the rules : https://www.irs.gov/taxtopics/tc762

Since they will have you drive their truck and they will pay for all the truck expenses you are technically an employee and should be paid as such. They should be paying 1/2 the SE taxes, pay workman's comp, a per diem and provide you with health insurance.

Blackwster00Author

Level 2

On 1099 their no benefit no overtime, no health nothing, just flat hourly rate. My employer said I'll safe on taxes, I don't understand how ? Without the necessary over the road expenses.

Not clear answer from them , looks like they are hiding something.

Critter-3

Level 15

YOU won't save on taxes instead they save money by not having to treat you as an employee ... which is why they are using the "LLC" trick to do an end run around the IRS employee rules. Read the link I posted. Then you will need to figure out if you want to play their game or not based on the info you have to consider.