JustAnswer > Tax
Ask A Question|Register|Login|Help
JustAnswer

Tax

Ask a Tax Question, Get an Answer ASAP!

Have your own Tax question?

6 Tax Professionals are Online Now
characters left:
Not a Tax Question?
Bookmark and Share

Question

i am going to switch over to a sub contractor in massachusetts for construction. can i write my truck and gas off? how do i go about doing it? can i save money this way?

Submitted: 1792 days and 7 hours ago.
Category: Tax
Value: $2
Status: AWAITING CUSTOMER ACTION
+
Read More
Posted by Winston Scully 1792 days and 4 hours ago.

Answer

Hi XXXXXXXXX:
If you use your truck in performing your duties as a sub contractor you may deduct your truck expenses less any amount re-imbursed for the use of your vehicle.
I assume that you are an "employee". On that basis you would use Form 2106 to figure your deductions.
If you are self-employed then you would use Schedule C to report your income. You would also be subject to Self employment tax.
I do not know enough about the operations and how you would be paid, what insurance you may need etc. to answer your last question properly.

I hope this was helpful

Answer

Winston has given you a good answer.

To address your final question - "Can I save money this way?" As a sub-contractor, you will have employer and employee portion of FICA and Medicare to pay, in addition to normal federal and state income taxes. The costs of your truck, tools, etc. (all of the expenses you incur in the production of your income) will be directly subtracted from your Gross Revenue, rather than listed on Schedule A and subject to 2% of your adjust gross income.

However, as a sub-contractor, you have the option of working for more than one contractor. This gives you the option to "adjust" your pricing - depending on the quality of your work and the customers you pursue - aiming for the higher valued homes is usually the method of charging a higher hourly rate and, if your work is good enough, not only getting the higher rate, but having these customer recommend their friends and neighbors.

If you are asking about making a change in payment method to you - this depends on whether the relationship changes between you and your employer. If the relationship doesn't change, IRS will say the change in status and payment method are not permissible - either you are an employee or you are an independent contractor.

If this does not answer your question, or raises other questions, please let me know.

 

Edited by SunTaxMan on 12/27/2004 at 7:44 PM

Picture
Expert: T. R. Miller, The SunTaxMan
Pos. Feedback: 100.0 %
Accepts: 
Answered: 12/27/2004

Public Accountant , Tax Preparer

30+ years in Public Accounting and Tax Preparation

+
Read More

Related Tax Questions

  • Is any portion of a Full Athletic Scholarship
  • DOES CORPORATE TRANSFER TO STOCKHOLDER PAYS TAXES ...
  • What does the code of w in Box 14 on a military W-2 ...
  • We rented our vacation home for 3 days in 2006 and 115 ...
  • I had to pay taxes to a town because I worked there; I can ....
  • Can a parent use a bank debit card to gift their child?
  • I have recently received a letter from the irs after ...
  • I have received a letter from the IRS saying they need to .....



Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.
Question List | Become an Expert | Terms of Service | Security & Privacy | About Us
© 2003-2009 JustAnswer Corp.