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View Full Version : Your thoughts on 1099's


ChadA
05-11-2009, 11:26 AM
I was thinking of putting my 2 employees on 1099. Anyone else out there do this? Thanks for any info.

Littleriver1
05-11-2009, 11:30 AM
Paying tax sucks. But, it's the Law. To me it's like gambling. I stoped gambling because I wasn't any good at it.

ChadA
05-11-2009, 12:02 PM
Paying tax sucks. But, it's the Law. To me it's like gambling. I stoped gambling because I wasn't any good at it.



Good advise. Thanks.

topsites
05-11-2009, 03:17 PM
I would recommend, speak to your accountant about this 1099 deal.

Smittie
05-11-2009, 03:23 PM
From my understanding even if you 1099 them you still have to give them a W-2. At least thats how my CPA explained it. I would still check with your CPA though just to be certain.

bohiaa
05-11-2009, 05:17 PM
at the end of the year you have to report to the IRS how much you paid them. you will have to send them a 1099. with the ammount that you paid.

then it's up to them to report there income to the IRS.

you report it. and your done............

kaferhaus
05-11-2009, 05:43 PM
There's a caveat to doing that.... 1099 is for contract labor. If the only job these guys have are working for you then you're driving down a very slippery slope legal wise. I was told by not only a CPA but my attorney NOT to 1099 anyone that had a "schedule set by you"

In other words if you're telling a guy to show up at such and such time and work until such and such time even if it's only a few days a week then he's a employee, NOT a subcontractor

You CANNOT 1099 a employee, period.

If you then tell the guy times are slow and you don't need him any longer..... he files for unemployment and states you were his "employer" then you have a fight on your hands... he gets pissed, calls the IRS.... they decide you're an "employer" and come after you for all of the back withholding, FICA etc etc. etc.

Also the guy gets "hurt" on the job..... claims he's an employee (forget any sub-contractor agreement unless the guy meets the "tests" for being one)

Here in my state you cannot 1099 anyone who you pay more than $600 in any calander year UNLESS he has a business license.

Use common sense....if the guy is a "employee", you know it, he knows it and if there's a problem you and you alone are going to pay the price and penalites for it and he'll be portrayed as your "victim" (which he was).

The easy thing to do is to obey the law and pay your damned taxes. Obama needs the money because he's already spent it.

wrtenterprises
05-11-2009, 08:31 PM
Is he using your equipment? Is he driving your trucks? Will he make more than $600.00 in a season? If you answer yes to any of these, he is an employee. Don't be a hack, do it the right way.......

bohiaa
05-11-2009, 11:37 PM
Is he using your equipment? Is he driving your trucks? Will he make more than $600.00 in a season? If you answer yes to any of these, he is an employee. Don't be a hack, do it the right way.......

NOT true, anyone can be 1099'ed, it's jsut a simple way of paying an employee, this way he's responsable for paying his taxes.

your thinking of day labor. Jsut because you 1099 someone does NOT mean he's NOT your employee, and it has NOTHING to do with if he uses your equiptment or not,

wait untill you get into, a percentage, this is where the money is for both employee and employeer, or shall I say Contractor, by paying a percentage, THEN HE"S truly NOT your employee.

I have 1099'ed Many times, 6 for last year in fact, and it looks like 10 so far this year. I pay 2.50 per hour more, By 1099 than by the hour.
simply because it saves me tons of money,

ChadA
05-12-2009, 09:04 AM
I have 1099'ed Many times, 6 for last year in fact, and it looks like 10 so far this year. I pay 2.50 per hour more, By 1099 than by the hour.
simply because it saves me tons of money,[/QUOTE]


My wife works at a doctors office and is paid 0n 1099 $700 a week for almost a year now.

I am waiting to hear back from my cpa.

Thanks for all the input everyone.

wbw
05-12-2009, 10:58 AM
You are REQUIRED BY LAW to withhold and forward taxes to the government. In addition to income tax withheld YOU ARE RESPONSIBLE for matching the employees social security contribution. There is no legal way around this if they are your employees. BTW, I can almost guarantee that they are employees.

at the end of the year you have to report to the IRS how much you paid them. you will have to send them a 1099. with the ammount that you paid.

then it's up to them to report there income to the IRS.

you report it. and your done............

Fvstringpicker
05-12-2009, 11:25 AM
You simply have to withhold required taxes and pay matching FICA on employees. "Employee" v. independent contractors are defined by law. Failure to withhold taxes, pay FICA, and issue w-2s, when required, are subject of separate and substantial penalties. Those of you who willfully and knowingly issue 1099s to employees in order to avoid withholding/paying tax are also in danger of possible fraud penalties. Dr. Five

bohiaa
05-12-2009, 01:36 PM
You are REQUIRED BY LAW to withhold and forward taxes to the government. In addition to income tax withheld YOU ARE RESPONSIBLE for matching the employees social security contribution. There is no legal way around this if they are your employees. BTW, I can almost guarantee that they are employees.

you can have employees, you can 1099 them, you can even match, "well NOT match I dont know anyone who does that " pay the required ss, and taxes on the monies they made for you.

there's noting wrong with that

Fvstringpicker
05-12-2009, 02:31 PM
you can have employees, you can 1099 them,

Are you saying you have a choice to give employees 1099s rather than w-2s, choose not to withhold income taxes and not pay matching FICA?

TJLANDS
05-12-2009, 07:05 PM
NOT true, anyone can be 1099'ed, it's jsut a simple way of paying an employee, this way he's responsable for paying his taxes.

your thinking of day labor. Jsut because you 1099 someone does NOT mean he's NOT your employee, and it has NOTHING to do with if he uses your equiptment or not,


:nono:
not true, in fact I beleive you would be breaking a law(or laws).
Just one ex employee(or current) makes a call to the State Board of Labor and you sir would need some vaseline.

Greg78
05-12-2009, 07:17 PM
A lot of misinformation most of it from bohiaa.

http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

Greg78
05-12-2009, 07:19 PM
More information
http://www.entrepreneur.com/ask/answer8607.html

wrtenterprises
05-13-2009, 07:49 AM
At least in Pa., if you have someone using your equipment and materials, driving your trucks, and they make more than $600.00 per season, they are an employee, period. Some states may be somewhat different, but the federal labor laws are the same for everyone. Obviously some on this board have little knowledge about such issues, and need to learn the rules before giving a start-up employee information......

Fvstringpicker
05-13-2009, 02:10 PM
At least in Pa., if you have someone using your equipment and materials, driving your trucks, and they make more than $600.00 per season, they are an employee, period.


If they don't the IRS promulgated definition of an independent contractor, you better withhold the required taxes or you'll end up not only paying the withholds out of pocket but also pay stiff penalties.

poolboy
05-13-2009, 05:18 PM
You cannot 1099 an "Employee". Simple, no if's or buts about it. I turned in a former employer of this after working for them for a short stint several years ago. Guess what, after the IRS sent me a simple yes and no investigation form, that former employer lost, and is no longer in business. At the time, they were one of the larger pool builders in the Houston area.

familylawncare
05-13-2009, 08:31 PM
No disrespect, but bohiaa may be the most uniformed person on this website...sounds like you are prime for an IRS audit.