Disclaimer: I’m not a trucker. I’m asking as a point of curiosity, not for my own use. I have and will continue to pay the IRS and other authorities on a quarterly basis.
I was having a discussion yesterday with a friend who retired from trucking last year.
She said that during her time as a self-employed trucker, she and everyone she knew in her circumstances paid taxes on an annual basis only.
She also indicated that she was never penalized for this behavior.
I had always assumed that people in that kind of situation had to make quarterly payments.
What gives?
Is there some kind of bizarro rule that exempts that particular industry’s contractors?
Sounds wrong, or she wasn’t telling you the whole story. This site on trucking jobs indicates that self employed operators DO have o pay estimated taxes:
I’m wondering if she didn’t fail to notice $300 or so in penalties, interest and fees that they dinged her with each year.
She has most of a math degree, so that would be borderline amusing.
Thank you yabob.
It’s entirely possible this is the case. A client who came to me after years of having someone else doing his taxes was bragging about how clever he was to not make “interest-free loans to the government” (i.e. quarterly payments). Then I pointed out the $170 penalty on the previous year’s return. It was not a lot of money in the big picture, but it was more than the interest he was bragging about getting.
She may have been confusing truckers and farmers. If you receive at least 2/3 of your income from farming you are exempt from estimated taxes as long as you file and pay by March 1.
Not all truckers are independent operators. If a trucker is an employee of a company then no, they wouldn’t pay quarterly taxes.
You can, of course, NOT pay quarterlies when you should - you’ll just get a penalty tacked on at the end of the year and maybe a nastygram from the tax agency.
Ironically, because the payroll people at my prior corporate jobs were idiots and couldn’t figure out how to manage out-of-their-state taxes, back when I lived in Indiana and worked in Illinois, I told them to stop paying my state taxes for me (you can do that - you have to sign some paperwork but it’s entirely legal) and despite being an officiall full time employee paid quarterly taxes.
What’s the irony here? Now that I’m living AND working in Indiana as an independent businesswoman, in a situation normally requiring me to pay quarterly taxes I’m making so little money at the business I don’t have to pay quarterlies! (I’m hoping that changes this year - I’d liked to be making that much money)
So… if the trucker is making poverty-level or lower wages she might not have to pay quarterlies, either.