How do I fill out a 1099, and write off my mileage on my taxes.?

Question

I'm a delivery driver. My employer just informed me that he is listing me as an independent contract worker. I've never had to fill out a 1099 before. I also do not know how to go about listing my mileage, or if I will even be able to deduct mileage when filing my taxes. I make about $100 a week in wages and $40 a night in tips (this number is impossible to get perfect as tips vary, drastically, from night to night). I drive approximately 200 miles a night, and spend approximately $30-$40 a night in gasoline. How would I go about documenting all of this so that I don't get "reamed" in the tax season?

Answer 1

The 1099 would be issued by your employer.  If he does not, you simply declare the income on your tax return. You need to keep records of your tips as well.

In order to claim your mileage you should be making regular records of how many miles you drive while performing your job.  You can use a simple notebook kept in the car or make entries on an excel sheet on your computer on a regular basis.

If you use a tax professional try to find someone who works with small business people.

At www.irs.gov you find answers to tax questions along with the IRS publications detailing tax regulations.

You can also visit www.proservtx.com for tax related information as well.

Answer 2

VB is on the right tract. However, I am going to tell you a little bit more.

There are 23 different tests to determine if you are  a contract laborer or an employee (and even more in some cases). In your case the most important one is you had to agree to be a contract laborer. The second is your profession and receiving a hourly wage. The list goes on...from the information given I would say that you are an employee.

What you lose as a contract laborer. First, you will have to pay Self-employment tax (15.3%) on top of regular tax (this is Social Security and Medicare). You will not have any Workman's Comp. and you will not be eligilble for unemployment. In short your boss is trying to get you to pay what he should be paying.

Hope this helps.

Answer 3

How you will treat the 1099-Misc income, read: http://taxipay.blogspot.com/2008/03/w2-o...

Answer 4

Keep a mileage log.  Also log your tips daily.  You will need to file Sch. C & SE on your income tax return.  I'm assuming you are driving a vehicle you own.

You should be getting paid at least 30% more than if you were treated as an employee.  If that is not the case, you are being taken advantage of.

You need to save 25% of your income to pay your taxes.  Do consult a good tax preparer, such as a CPA or an Enrolled Agent.

Answer 5

Pizza?

I find that a lot of pizza places treat their drivers as 1099-contractors...and apparently pray that the drivers don't realize they are being taken advantage of.

Running your car isn't just gas.  It's gas, insurance, repairs, tires, depreciation...and the standard mileage rate is currently 58.5 cents a mile to cover these costs for the average car.  If you are driving 200 miles a night, you need $117 in income just to break even.  $40 in tips and $20 in wages isn't going to cut it.