ILLMAS Posted September 4, 2008 Report Share Posted September 4, 2008 Hello, I have a question in regards to pizza delivery charge and tips. One of my client bought a pizza business from someone and kept the delivery personel, but I am not to sure they are addressing the delivery charge and tips properly, here is an example of how they are doing business: Pizza + Tax $17.00 Delivery Chrg$ 2.00 Total $19.00 Once the pizza is delivery, the driver returns the $17 and keeps $2 + tip, on top of that my client give each driver around $30 for fuel a week, my client does not report delivery charge as revenue, but they do report the fuel charge as an expense. I told them that this didn't seem right, they should be giving the drivers a 1099 at the end of the year with the delivery charge + tip + fuel stipend, is this correct? FYI the drivers are not employees. Thanks, Quote Link to comment Share on other sites More sharing options...
Gail in Virginia Posted September 5, 2008 Report Share Posted September 5, 2008 Does he not pay the delivery drivers anything but the delivery charge and $30 for gas? I am glad I am not a delivery driver. I would have thought they would be employees, and I would have thought they got paid, so I am probably not the best one to answer this question. Under the circumstances you outline, he pays them the delivery charge and the fuel stipend, so he should give them a 1099 for that, but he doesn't pay the tips and he probably doesn't have a clue what they get in tips. If they were employees, they should be reporting tips to him and he should be including them on the W2, but I don't think he would have an obligation to report tips if they are not employees. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted September 5, 2008 Report Share Posted September 5, 2008 If he does not count the delivery charge as income, he can not deduct paying it to the driver as an expense. But he can deduct the $30 for fuel he pays out to these Independant Contractors who deliver for him. Quote Link to comment Share on other sites More sharing options...
Daune/CA Posted September 5, 2008 Report Share Posted September 5, 2008 If he does not count the delivery charge as income, he can not deduct paying it to the driver as an expense. But he can deduct the $30 for fuel he pays out to these Independant Contractors who deliver for him. It appears that the "delivery charge" is never received by them, but retained by the driver. As a cash based business, the delivery chg would not be income, nor expense--only the $30 fuel paid to driver would be an expense. And if that amount totaled more than $600 per driver, it would require a 1099 to be issued, and they should have the 1099 info on hand even before paying the fuel payment. Quote Link to comment Share on other sites More sharing options...
michaelmars Posted September 6, 2008 Report Share Posted September 6, 2008 agree with Daune, I have food deliv clients too but you should be aware that both the irs and Workers Comp are going after these arrangements. Quote Link to comment Share on other sites More sharing options...
joanmcq Posted September 10, 2008 Report Share Posted September 10, 2008 I delivered pizzas for awhile, and I was an employee (Round Table Pizza). Wages + tips. Quote Link to comment Share on other sites More sharing options...
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