Company driver + Fleet owner

[mcavoy33]

I've decided that I'm ready to make the jump into ownership. I'm going to buy a cargo van, maybe even two. However, I've also decided I am not going to quit my driving job, I am going to hire someone to drive my van.

The reasons are two fold, I don't want to give up the sprinter and it doesn't make sense for me to buy one yet. More importantly, I want to diversify. I don't want to put all my eggs in one basket. If my van breaks down, I am still earning an income from driving someone else's van. I've seen enough breakdowns to realize that they are real and you need to plan for them.

But I'm curious, what tax implications will arise doing it this way, any suggestions on structure to minimize tax implications?

Currently I claimed a bunch of deductions and I'm having a minimal amout of tax being withheld off of my paycheck.

 

[Fkatz]

Company driver + Fleet owner
I've decided that I'm ready to make the jump into ownership. I'm going to buy a cargo van, maybe even two. However, I've also decided I am not going to quit my driving job, I am going to hire someone to drive my van.

The reasons are two fold, I don't want to give up the sprinter and it doesn't make sense for me to buy one yet. More importantly, I want to diversify. I don't want to put all my eggs in one basket. If my van breaks down, I am still earning an income from driving someone else's van. I've seen enough breakdowns to realize that they are real and you need to plan for them.

But I'm curious, what tax implications will arise doing it this way, any suggestions on structure to minimize tax implications?

Currently I claimed a bunch of deductions and I'm having a minimal amout of tax being withheld off of my paycheck.
Hi, Macovy33

It would depend on the current owner of the van that you are driving now.

If you are an owner/operator curredntly leased on to him, that is fine if you want to lease on with another company and hire drivers who will become Independent Contractor, just like you are now and recieve a 1099 Misc at the end of the year.
But if you are driving as a company driver and recieve a W-2 with taxes taken out. You might have a problem. It night be considered as a "Confilct of Interest" and be released on your current job. which will be a very definite possibility. You might want to talk to them first and find if you can do this.

If you are an O/O then you will have no problem with another driver, you yourself cannot do both. if your contract states that the company that you are leased onto has "EXCLUSIVE USE OF YOUR VEHICLE", THEN IT CANNOT BE DONE. YOU MUST SIGN THE 2ND TRUCK ON WITH THEM."


if you have any other questions please do not hestitate to ask, but direct all question where I can attach information to be read by you, I cannot attach any items to this forum
Thank you

Franklin Katz, ATP, PA, PB,
Frank’s Tax and Business Service
120 York Rd
Kings Mountain, NC 28086-3151
(704) 739-4039 Fax: (704) 739-3934
e-mail: [email protected]
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