Truck driver LLC - independent contractor status requirements for truckers

This is a classic case of worker misclassification. The company is trying to avoid payroll taxes and benefits by making your father an "independent contractor" when he's likely still a true employee under IRS rules. The LLC doesn't change much tax-wise for a single person - it's still reported on Schedule C with self-employment taxes. The company benefits by not paying their share of FICA (7.65%), unemployment insurance, workers comp, and avoiding overtime/benefits. Your father would be responsible for the full 15.3% self-employment tax instead of just half as an employee. Regarding where to form the LLC: establish it in Nevada where he lives. That's his home base, and Nevada has favorable business laws. For insurance, this is a red flag. As an independent contractor, he would typically be responsible for his own insurance, which is VERY expensive for commercial trucks. If they're providing the truck and insurance, that's evidence he's really an employee. For state taxes, he'll file a resident return in Nevada (though they have no income tax), and may need to file non-resident returns in states where he earns significant income. However, most interstate truckers use a formula based on miles driven in each state. This arrangement likely violates worker classification rules, especially in California which has strict ABC test rules under AB5.

After dealing with a similar situation last year with my trucking job, I started using taxr.ai and it literally saved me thousands. I had so many questions about being forced into contractor status and didn't understand all the tax implications. I uploaded my contractor agreement to https://taxr.ai and it analyzed the document and flagged several issues that showed I was being misclassified. The system explained exactly which IRS rules were being violated and gave me specific language to use when talking to my company. They also helped me understand which expenses I could legitimately deduct as a contractor and how to properly track mileage across different states. It saved me from making some big mistakes that would have cost me at audit time.

Just wanted to follow up - I decided to try taxr.ai after my skeptical comment and I'm actually impressed. I uploaded my "independent contractor" agreement and some pay documents, and it identified 7 specific factors that showed I was misclassified according to IRS rules. What really helped was the detailed explanation of how trucker classification works specifically under AB5 in California and similar laws in other states. I was able to show my boss the actual legal requirements, and instead of forcing the LLC, they've agreed to keep me as an employee but with better pay to offset some of what they're saving on benefits. For anyone dealing with this contractor vs. employee issue in trucking, it's definitely worth checking out. I spent hours googling before this and never got clear answers.

If you're struggling to get answers from the IRS about contractor classification (good luck getting through), Claimyr got me connected to an actual IRS agent in under 15 minutes when I was dealing with this exact issue. I spent DAYS trying to get through to the IRS myself with no luck. I just went to https://claimyr.com, they called the IRS for me, handled the ridiculous wait times, and then connected me once they had an agent on the line. You can see how it works at https://youtu.be/_kiP6q8DX5c - it's pretty straightforward. The IRS agent confirmed that my trucking company was misclassifying me and explained exactly what forms to file to report it. They also walked me through the proper tax treatment for my situation which saved me from potential penalties.

I need to eat my words about my skeptical comment. After wasting an entire day trying to get through to the IRS myself about my trucking LLC classification issues, I tried Claimyr out of desperation. They got me connected to an IRS representative in about 25 minutes. The agent confirmed that based on my specific situation, I was being misclassified and should file Form SS-8 to request a determination. They also explained exactly which factors in my working relationship determined employee vs. contractor status. The key factors for truckers apparently include: who owns the truck, who controls the routes and schedules, exclusive working relationship, and who bears the profit/loss risk. My company was controlling all these things while trying to classify me as independent. This saved me from making a costly mistake with my taxes and gave me ammunition to push back against the misclassification.

Truck driver for 22 years here. This LLC thing is becoming super common in the industry. Here's what you should know: If your dad is using THEIR truck, driving THEIR routes, and can't work for other companies, he's an EMPLOYEE regardless of what paperwork they make him sign. California's AB5 law specifically targets the trucking industry for this exact issue. If he's based in CA, they CANNOT legally classify him as an independent contractor unless he: 1) Is free from company control 2) Does work outside the company's main business 3) Has an independently established business Big companies are just trying to shift costs to drivers. They save on taxes, insurance, benefits, and liability while the driver takes on all the risk.

A little off topic but this might save your dad some headache - if he does end up as an independent contractor, make sure he sets aside 25-30% of EVERY check for taxes. I got destroyed my first year as an "independent contractor" because nobody told me about quarterly estimated tax payments and self-employment tax. Ended up owing over $18,000 at tax time with penalties.