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not sure how this "contractor" thing works

Discussion in 'Business Fundamentals' started by scottyknows50, Jun 15, 2010.

  1. scottyknows50

    scottyknows50 Member
    Messages: 93

    I will be plowing for a company that wants to use me as "contracted" labor. From what I understand they are doing that so they don't have to pay any taxes?? Anyhow, they said I need to start my own business. Does this benefit me in any way? What are the costs involved in this? Will I then have to insure my truck under the business name and take away my personal multi-car discount? Just wondering if this is standard or if I should tell them to "shove it" and look somewhere else. Thanks- this site has been more than helpful with my questions before.
  2. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Basicly they want you to be a sub contractor. Meaning you must pay all your own expenses. You could just set yourself up with a DBA . But if you want in this business get a lawyer to help you. People are sue happy now days with slip and fall cases. And if possible get a copy of the agreement you 2 will be using.
  3. scottyknows50

    scottyknows50 Member
    Messages: 93

    Excuse the ignorance- what's a DBA? I don't really want to have to do much other than plow and get paid (wouldn't everyone!?!). Is this pretty standard?
  4. basher

    basher PlowSite Fanatic
    from 19707
    Messages: 8,993

    You would also have to meet the definition of a sub-contractor. If you search the site this has been covered a number of times. The best thing for you to do is talk to your accountant and a Lawyer but this could cost you much more then the taxes

    DBA: Doing Business As
  5. Mick76

    Mick76 2000 Club Member
    from Maine
    Messages: 2,157

    Basher has given sound advice..... I'm sure it would benefit you come tax time as you can deduct alot of the costs associated with plowing but there will be more work involved. I'd suggest talking to your cpa... if you don't have one, find a good one ..... if your going to be doing alot of subbing I'd suggest a lawyer to draw up a llc, sole prop, s corp... whatever you, the lawyer, and your cpa are comfortable with. Cover your A$$ because one slip and fall accidnet could ruin your lively hood if your not set up correctly. On the flip side of things, once you get thing established its nice extra $... heck if you really find you like plowing go after your own accounts in a few years.... you'll make more $ that way

    Good Luck
  6. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    Cost of establishing a business really depends on the state you are in. Around here all you have to do is start charging people for something. So check with your county clerk if a business license is required. Then, check with your insurance agent if you'll need commercial vehicle insurance. Ask about coverage in case you get sued (liability insurance). The company you sub-contract with will want you to have both.

    Your advantage will be that you can also have your own accounts and the tax advantages - you can deduct the equipment (truck, plow, fuel, maintenance etc). Check with a tax preparer for what records you need to keep.

    It's really not as hard as it seems.
  7. TCLA

    TCLA 2000 Club Member
    Messages: 2,707

    It's very standard. No need to tell them to shove anything.....they are giving you an opportunity.

    Unless you are expecting to work for a little cash here and there, and don't care about the future of your operation you should really be thanking them. They are taking a real chance with you.

    You have been given very sound advise. It's the perfect time to use your listening ears.

    Good luck to you!
  8. scottyknows50

    scottyknows50 Member
    Messages: 93

    I don't really have an operation- I'm a guy with a truck and a plow that plows with them when it snows- not much more. I was told the library has the info I need to start my own company so I guess I'll start there. From what I understand I am not responsible for the plowing- nothing is contracted under my name. I feel like I am considered more like just an employee, just with my own truck. Who knew this would all be so involved........ thanks for the replies.
  9. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    You just learned your second lesson.
  10. Matson Snow

    Matson Snow PlowSite.com Addict
    Messages: 1,985

    One Truck or a Hundred..YOU are an operation and start looking at it that way..Be more than just a plow jocky.....You need to talk with them a little more..But to me it sounds like you are a Sub-contractor....
  11. basher

    basher PlowSite Fanatic
    from 19707
    Messages: 8,993

  12. scottyknows50

    scottyknows50 Member
    Messages: 93

    thanks again for the responses. i don't really want an "operation." we have a plow at home to do the farm driveways and we thought we'd make some extra money with the thing. this all seems way to complicated for me and i guess i'd better just move on to something else. again, thank you for all of your help- this just doesn't seem to be in my best interests right now.
  13. elite1msmith

    elite1msmith 2000 Club Member
    from chicago
    Messages: 2,762

    compilcated or not, if you plan to use YOUR own truck for any plowing, regaurdless of if its subbing for this company, another, or even if you pick up drive ways on the side, by the book, you still need to set up a liablity policy, and at the very least a DBA business. even if you only plow driveways you need the proper insurance. odds are if you told you "multi family policy" that you hang a plow on the front of the vehical and that you intend to plow more than just your farm, they will likly drop you or jack your rates. most will not provide any converage unless they know you have a plow on it ahead of time.

    and of course paying your taxes on the money you make. talk to a cpa and they can get you set up properly.

    if you dont do these things, i would suggest leaving the truck at home, and plowing as an employee in the compaines truck rather than your own. that other ocmpany is not asking to "hire you" as a person and employee. rather they are asking to contract your vehical with an operator in the seat. FYI - depending most of the time the fuel comes out of the operators pocket. however as a sub you should expect to earn 50-80 per hour so it depends if thats all worth it to you
    Last edited: Jul 8, 2010
  14. scottyknows50

    scottyknows50 Member
    Messages: 93

    elite- my insurance company knows i have a plow on the truck. that's just another thing that confuses me. i'm not sure if i need to open a business, move the truck into the business's name (so i don't get sued and can deduct depreciation), insure it in the business's name. it's all confusing to me and i really can't afford to go talk to a lawyer about this sort of thing. thanks for the reply though. i am considering doing this again, so hopefully i get it all figured out within the next few months.