W2 Vs 1099- 80k salary- Which takes home more?

What write off are u doin for 1099 if you don't own the truck?

 

That question cannot be answered the way you want it to be. There are too many variables involved like what your deductions are and how you use them etc etc but if you look at the IRS tax brackets and then add your SE tax you'll quickly see 1099 pays more taxes in the end.

 

Meal allowance and hotels on the road would be about it unless he tries to get creative with the deductions.

 

Don't care about health ins. or workers comp? You get none of that on a 1099 and boy howdy, you WILL care about that in the future.

 

The "1099" option will be FAR MORE HASSLE & AGGRAVATION than it's really worth.

-- L

 

1099 pay is essentially inflated by 25-30% because it ignores ALL TAX PAYMENTS. The interesting comparison is not $80K W2 vs $80k 1099 but $80k W2 vs $104k 1099 AND THEN PAY ALL THE TAXES YOU OWE as a 1099. MANY MANY of these comparisons stop the comparison at PAYDAY and many, many 1099 success stories last until next April 15's tax day and then disappear once they see how many thousands they owe to the IRS/State tax authorities.

In my experience I paid around 15-20% of my W2 income in taxes over the years. For exactly the same gross pay/revenue you at least pay more in taxes just because you are paying employer/employee sides of the Social Security, sometimes called Self-Employed Tax.

Also, to ignore the financial effect of having the employer pay some of your health insurance costs versus having zero health insurance or paying 100% of the full costs on your own insurance/medical costs dwarfs the difference between W2/1099. If 1099 isn't paying AT least 30% more than W2 it should be seen as a financial downgrade. Ask accountants. Many 1099 truck drivers answers don't disclose their creative and individual "interpretations" of the tax code, which will eventually come back and bit them in the backside. As someone that experienced this before trucking, my $300 mistake in taxes eventually cost me $3,000 once the taxes and penalties were collected by the IRS, not to mention the stress of having the IRS on my back for several years.

Lastly, 1099 requires you to not just drive the truck and keep customers as happy as possible, but you also must be a part-time bookkeeper/amateur accountant. That takes time and is a level of responsibility ON TOP of working 70 hours per week as a driver. 1099 better pay substantially more to even be close to worth the extra effort. 1099 is generally better for the employer while W2 is generally better for the worker.

 

Well, given your first 2 sentences, I'd say ask yourself this, "when you break down on the side of the road and you need a tow, who makes more now?"

 

1099 - pay ALL taxes for for fed and state and you have NO health insurance ( unless you pay for it , like blue cross and / or aflac , HSA , etc ) those you MAY be able to deduct, but you have to be the book- keeper and keep all deposits recipts and pay outs ( bill payments to Any medical program).
You'll get more till 4-15 , then the tax man will demand there cut.
W-2 you pay half the tax and you get a refund if you can itemize ( med , hsa, etc) .
W-2 beats 1099 hands down.
.... done both , never 1099 again

 

I've done both and you make far more money on a W-2. It's easy to get sucked into the belief that 1099 pays more. The only time it really can be a money maker is if you actually legit own a business and have things to write off. If you're a "company driver" on a 1099, it's useless. You're just giving Uncle Sam free money at that point. That's why I tell drivers don't do it for a long term thing. A W-2 company can pay you 1500 take home on a good week, but a 1099 company paying 1500 is less because no taxes are taken out. So it'll be more like 1300, or less, for the same miles.