The Internal Revenue Service has warned that motor carriers that pay their owner-operators a fuel surcharge need to include those amounts in the Form 1099 report of the compensation they pay their contractors.
According to the IRS, some companies have not been including these fuel surcharges.
The IRS also urges owner-operators to check with the companies leasing their vehicles and confirm whether the fuel surcharges are being included in the 1099s. Unreported income can total $30,000 to $50,000 per year for one truck, the IRS says.
If the amount shown on the 1099 does not include the fuel surcharge, the driver must include the fuel surcharges in the income they report on their tax returns, says the IRS. If the surcharges were not reported for prior years, the owner-operator should file amended income tax returns to correct the oversight and avoid additional penalties and interest. Companies that have not included the fuel surcharge in past year must also file amended 1099s.
For more information, visit www.irs.gov.
According to the IRS, some companies have not been including these fuel surcharges.
The IRS also urges owner-operators to check with the companies leasing their vehicles and confirm whether the fuel surcharges are being included in the 1099s. Unreported income can total $30,000 to $50,000 per year for one truck, the IRS says.
If the amount shown on the 1099 does not include the fuel surcharge, the driver must include the fuel surcharges in the income they report on their tax returns, says the IRS. If the surcharges were not reported for prior years, the owner-operator should file amended income tax returns to correct the oversight and avoid additional penalties and interest. Companies that have not included the fuel surcharge in past year must also file amended 1099s.
For more information, visit www.irs.gov.
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