The Limos.com Forum Has Moved!!!

Jim, Tons of people still use 1099's in this industry. Some with a well-thought out schemata, others.... it is best always to cross the t's and dot the i's in our trade.

Jim: I know you and I are on the same page but there are a lot of companies here in Michigan who are just throwing caution to the wind and just going ahead and saying they are I.C. companies.

The Guy that you and I tried to talk to and set straight has left the first company and has his own company doing the same thing. He seems to feel what he is doing is proper.

Our association has more or less gone on record as bing opposed to the I.C. set up and has urged caution if you are going to do it but with the way the economy is here in Michigan many Guys feel it is worth the risk to have the unfair price advantage over the Guy who is playing by the rules.

You will find in your research on this forum that I had to mortgage a fully paid mountain home to pay back the IRS after an audit revealed I did not have a proper IC relationship with my contractors. I am talking huge sums of money.

Here is the simple version: If they drive YOUR car and pay you no rent/lease and assume no risk of financial loss or gain they are an employee. If you tell them how you want the car stocked and how to perform services for your clients, they are an employee. If you call them to assign them a job, they are an employee.

There are very, very few people in the industry still using this method. Everyone I know has employees. It is much healthier for the company to maintain direction and control.

In short - pay your EMPLOYEES. Collect payroll tax for the government and pay your part to society. No one likes it. It's just the way it is!

Go to the IRS web site and get the information there. Also go to the NLA web site they have some there. If you are a Sedan operation (glorified Taxi)where a Chauffeur has his Butt in the same Car all day it can work well. for you. If you are a Limo operation where a Chauffeur may be in different cars during the coarse of the day, it is almost impossible to work. The TLPA is the expert source on this because most Taxi operations are I.C.

If you do not set it up right, you will find yourself in deep "DoDo" you need to get an IRS determination before you do anything. You need to consider yourself a rental car company. Not only do you have trouble with the Feds, you will also have trouble with the State if it is not done correctly. There are people on this forum who are on the "Pay for the rest of your Life" plan with the IRS and the State right now because they did not follow the rules and got bad advice..

Do a search on this forum. There is lots of good stuff in the archives and this topic has been covered numerous times.