Owner/Operator escrow account

[anavarro-transport1970]

If I am a owner/operator truck driver where do I enter my escrow paid in on the schedule C for my company?

[Irene2805]

I'm not sure what you mean by " escrow paid in on the schedule C."

To enter taxes paid for your business, follow these step:

1. On the screen for your business return, click the box Add expenses for this business.
2. On the What kind of expenses screen, mark the box Taxes and licenses and click Continue at the bottom of the screen. 
3. Enter the taxes paid on the next screen.

Examples of taxes and licenses include the following:

• Business license
• State board license
• State and local taxes
• Property taxes
• Payroll taxes
• Other taxes and licenses expenses

If you're referring to estimated quarterly federal and state tax payments you paid, please follow these steps:

1. Click on Federal >  Deductions & Credits. 
2. In the Estimates and Other Taxes Paid section, click on the Start/Update box next to Estimated Tax Payments. 
3. On the next screen, click the ​​​Start/Update box next to Federal estimated taxes for 2020(Form 1040ES).
4. On the screen, Did you pay estimated taxes for 2020? click the Yes box.
5. Enter your payment(s) on the next screen, How much did you pay in federal estimated taxes? 
6. If you made more than four payments, click Add another payment at the bottom of the screen to add another line.
7. You will be brought back to the Estimated Taxes screen.  If you also made state estimated tax payments, click the Start/Update button next to State estimated taxes for 2020.
8. On the screen, Did you pay state estimated taxes for 2020?​​​​​​​ click the Yes box.
9. Enter your payment(s) on the next screen, How much did you pay in state estimated taxes? 

If you meant something else please respond to this thread with more information.

[anavarro-transport1970]

I am not talking about taxes.  My husband is a owner/operator of a trucking LLC and I do his taxes.  He receives load to delivery through a larger trucking company which withholds money from his pay to go in a escrow account.  Through my research I have found that as a owner/operator in the trucking industry it is a deduction on his taxes and I am not sure if it should go under other expenses or somewhere else on the Schedule C.

[ColeenD3]

What is the purpose of the escrow account. Does he eventually receive the money or is it a fee he is paying to someone?

[anavarro-transport1970]

The money is held in escrow for repair, insurance, fuel, admin fees or anything it is needed for.  If he ever stop being dispatched by the large company anything remaining will be returned to him.

[ColeenD3 · Accepted solution]

Is this amount reported to him on a 1099-NEC? Normally, it is not his until he has constructive receipt, meaning that the funds are available for him to use. How is the company that pays him treating this money? Are they considering it part of his 2020 compensation, or not payable to him until such time as he removes it from escrow?

[anavarro-transport1970]

Yes it is report on his 1099 NEC.  On his yearly pay summary it is reported as a deduction.  Thank you so much for all your help!

[Carl]

Money placed in an escrow account is his money, and it remains his money until something happens that gives cause for a withdrawal from that account to pay a debt that he is liable for.

Money put into escrow is not reported on any tax return until such time that money is used to pay a qualified and tax deductible expense. Generally when that happens, the administrator of the escrow account will send a notification of some type (usually at tax filing time) detailing withdrawals from the account, as well as who or what entity the withdrawn money was paid to, and why that money was paid. (Not all withdrawals from an escrow account may be tax deductible.)

[Critter-3]

If all the income is reported on the 1099 then all of it needs to be reported on the return even if some money is held back for future expenses  because if he quit all the money remaining is released to the owner.  The expenses paid during the year from this account are deductible in the year they are withdrawn and paid.   This is no different than putting some of the money in a business savings account.