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MikeKle
06-19-2010, 12:08 AM
I am trying to come up with a form that employees must sign before working for me, I have looked for templates, but havent found any like i need. Basically i am paying cash, under the table, and want to have something about them being responsible for their own taxes from this job, and something concerning injuries, so they cant sue me over something later. My friend that used to be in this industry had forms like this and is looking for them, but he admits they were likely deleted long ago. Anyone have a generic template I can copy with all the above info on it, or just a portion, and I can come up with the rest? Thanks for the help!

jasonki32
06-19-2010, 12:23 AM
Have them sign a W-9 and file a 1099 at the end of the year. Basically they are a subcontractor. If you are doing cash under the table there is nothing you can make them sign legally, since what you are doing is illegal.

topsites
06-19-2010, 01:28 AM
You can't pay them under the table and then expect them to pay taxes,
that would be like me selling cocaine on the street and expecting my buyers
to do something responsible with it.

That would backfire so bad, since it's all right for you to break the law.

ACA L&L
06-19-2010, 01:45 AM
You can't pay them under the table and then expect them to pay taxes,
that would be like me selling cocaine on the street and expecting my buyers
to do something responsible with it.

That would backfire so bad, since it's all right for you to break the law.

yikes, cocaine, as an example, never thought i would see that one, but yeah thats illegal, all of it. Pay taxes, its a deduction at end of year, one 40 hour employee costs sumin like 200 buks a qtr. For 5-6 guys i pay like 1200 qtrlt. But with those guys I make a more than enuff to cover that, and i have piece of mind. Your accountant can file all the paperwork, its really not a big deal. Now if u wanna do profit sharing, they would be considered owners, pay them each 10%off all profits, become a corp. and your good, just be sure to cross your I's and dot your T's......good luck man

Richard Martin
06-19-2010, 04:33 AM
You can have them sign any form you want. It doesn't matter. If they are employees that work when you tell them to, at your direction and with your equipment then you are required to withhold taxes and comply with individual states workers comp laws. Huge companies like McDonalds and Walmart have tried every way they can think of to get around these laws and still today, they withhold taxes and pay workers comp on every single employee.

Listen to no one you know or anyone here at Lawnsite about this. But for your own good you'd better listen to the IRS becasue they are the people you'll be trying to explain your form to if they or one of your "employees" turns you in for not withholding taxes. Disgruntled employees are the number 1 way that companies get caught doing this and I've seen it happen a bunch of times.

Read this from the IRS.

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

jvanvliet
06-19-2010, 06:29 AM
You can't "legally" pay anybody under the table. Read the above and like some one said before have them sign a w9 and give them a 1099 at the end of the year.

Be aware the IRS has some strict guidelines as to what constitutes a 1099 employee. They are independent contractors. What that means is YOU can't set their hours. They come when they want, work for as long as they want, and the way they want as long as your purpose for engaging into a contract with them is met. They bring their own tools, or equipment or whatever.

I have drawn up a 1099 agreement for my labor force that outlines some of these things. For example it states that I may provide transportation to the work site (at a specific time) if they don't show up, they are responsible for their own transportation. At their option, they may use their own equipment, or they may utilize mine. I explicitly outline their responsibilities with completion deadlines (like the end of the day), for example; All hard surfaces and planting beds are to be edged; weed wacked and blown off on completion daily.

That establishes what they have to do per the contract, If they weed wack first or edge first, I can't tell them, I can set the standard for acceptable perfomance but I can't tell them how to do it (but I can show them). They are not my employees, they are INDEPENDENT CONTRACTORS.

The bigger your operation, the harder the IRS will look at your 1099 and your W9's.

GOLDEN RULE: DON'T MESS WITH THE IRS!

Richard Martin
06-19-2010, 07:26 AM
I have drawn up a 1099 agreement for my labor force that outlines some of these things. For example it states that I may provide transportation to the work site (at a specific time) if they don't show up, they are responsible for their own transportation. At their option, they may use their own equipment, or they may utilize mine. I explicitly outline their responsibilities with completion deadlines (like the end of the day), for example; All hard surfaces and planting beds are to be edged; weed wacked and blown off on completion daily.

That establishes what they have to do per the contract, If they weed wack first or edge first, I can't tell them, I can set the standard for acceptable perfomance but I can't tell them how to do it (but I can show them). They are not my employees, they are INDEPENDENT CONTRACTORS.

I don't know if your people are independent subcontractors the way you have it setup. As I wrote above, you can state anything you want in a contract. The IRS won't give 2 hoots about it. For them to qualify as subcontractors you basically give them a list of lawns to cut for the week (or day if you have a daily contract written up and signed by all involved parties) and tell them to cut them. If they start riding in your vehicle, using your machines and cut them in the order that you set then they are employees.

They must be independent to be subcontractors.

Look. It doesn't matter to me what most of you guys do. I gave up on that long ago. I just want to try to keep the one guy that cares out of trouble in the event the IRS does audit them.

nepatsfan
06-19-2010, 07:44 AM
You cant pay them as subcontractors either. For them to be independent contractors, they need their own tools and not to be told when to go places and not report to you in the morning. A friend of mine got busted for that by the dept of industrial accidents. Small guy one employee. Why dont you just go the legal route like the rest of us and pay taxes. I cant believe you would come on here and ask for ways to get out of buying insurance and pay taxes. Get workers comp and pay your guys legit, then you wont have to worry about trying to find loopholes. I am not sure what I pay for my payroll service but its under 50 bucks a week. I just tell them the hours and they take care of all the taxes and pay. They send me the checks and its done. You can even pay workers comp right with the checks. They just charge you by the 100 that you pay out. We pay a little over 4 dollars per hundred but we do landscaping and masonry which involves digging so its a little more expensive than if you are just doing maintenance.

whosedog
06-19-2010, 08:07 AM
You all have to excuse Mikekle for his lapse of judgment.You see he has a heel spur,is allergic to grass(itches),has a bad back and neck,is addicted to methadone,has werewolves in his neighborhood,believes that there should be a class to teach you how to drive drunk,thinks it's ok to bang a customers wife(with the approval of his 19yr old GF),has a strange view of hell;etc.Mike we love you like a brother,you're what part of what makes LS so entertaining.

greginboise
06-19-2010, 08:35 AM
My corporation just went through an IRS full audit, I have 13 full time employees, we came out fine, no changes, but the auditer told me the IRS has added over 3500 new auditers this year to look into all levels of business. Better to simply do it right on the front end. I think you'll find the tax advantages to you will be huge too. Get a good accountant, someone with a little dirt under their fingernails........ no family "friends" . Make yourself accountable, because if someone gets hurt, and you try to defend yourself as not their employer, and they say you are, it could be very ugly.

greginboise

MikeKle
06-19-2010, 09:19 AM
I pay plenty of taxes! so thats not the issue, and the insurance thing, that is another story entirely, but it is by choice, Ive never had workers comp on anybody Ive had working for me, and while I am a pretty small operation, my friend that used to do this, had 2-3 crews going out each day and he never had any problems, as he had all his "employees" or subcontractors sign that form, although maybe he was just lucky, and I dont know what he "considered" his workers, employees, subcontractors, independent? It seems like it all depends on "what" you consider them and how they work and report to work... interesting. What if this person sends me a bill for their services each week?

JB1
06-19-2010, 09:34 AM
It just get better and better.

topsites
06-19-2010, 09:34 AM
I realize to a point it boils down to interpretation, all I'm saying is WHEN the IRS
calls to find out what's going on, SOMEONE had better have their story straight.
Ask me how I know this.

That having been said it might be a good time to consult with an accountant?

yikes, cocaine, as an example, never thought i would see that one, but yeah thats illegal, all of it.

Maybe I was a bit harsh because I like to get my point across,
but I do believe both tax evasion and cocaine possession qualify as felonies
so they're both serious offenses?

Anyhow...

Richard Martin
06-19-2010, 09:45 AM
It seems like it all depends on "what" you consider them and how they work and report to work... interesting. What if this person sends me a bill for their services each week?

As long as they get to work when they want and use their own tools, then yeah, you can legally 1099 them. It doesn't depend on "what" you consider them. Go read the link I posted. It's pretty clear.

Frontier-Lawn
06-19-2010, 09:54 AM
i still don't see why i have to pay half of the taxes and SS, they already cost some profit needing them for jobs!, THANKS IRS. By all right the employee should pay 100% of his taxes and SS that come out of his paycheck, we do so can them!

Richard Martin
06-19-2010, 10:08 AM
i still don't see why i have to pay half of the taxes and SS, they already cost some profit needing them for jobs!, THANKS IRS. By all right the employee should pay 100% of his taxes and SS that come out of his paycheck, we do so can them!

The system is setup on the presumption that business owners make more money than employees. They also profit from the employees. If you weren't profiting from the employees what would be the point of having them? Your "contribution" as a business owner is based upon that premise. And you're only paying half of SSI and Medicare, not half of their taxes. You are contributing to their eventual retirement.

MikeKle
06-19-2010, 10:20 AM
I realize to a point it boils down to interpretation, all I'm saying is WHEN the IRS
calls to find out what's going on, SOMEONE had better have their story straight.
Ask me how I know this.

That having been said it might be a good time to consult with an accountant?



Maybe I was a bit harsh because I like to get my point across,
but I do believe both tax evasion and cocaine possession qualify as felonies
so they're both serious offenses?

Anyhow...

I consider tax evasion worse than cocaine possession.

ricky86
06-19-2010, 11:48 AM
WARNING: Never, ever play games with the IRS. You will lose. Run your business in a conventional manner and you will be able to sleep at night. Unless, of course you think your slick enough to get away with it. But, you aren't. You already posted you pay under the table. Brilliant.

punt66
06-19-2010, 12:22 PM
I consider tax evasion worse than cocaine possession.

consider being an employee yourselff. You know nothing about running a legal business. You will get yourself in trouble.

jsf343
06-19-2010, 01:05 PM
I pay plenty of taxes! so thats not the issue, and the insurance thing, that is another story entirely, but it is by choice, Ive never had workers comp on anybody Ive had working for me, and while I am a pretty small operation, my friend that used to do this, had 2-3 crews going out each day and he never had any problems, as he had all his "employees" or subcontractors sign that form, although maybe he was just lucky, and I dont know what he "considered" his workers, employees, subcontractors, independent? It seems like it all depends on "what" you consider them and how they work and report to work... interesting. What if this person sends me a bill for their services each week?

This is a scary thread, every thing you mention is scary. If you want to sub them out the aw is very clear on subs and the definition of a sub. I would be VERY careful with stuff like that, you are giving an open invitation to the IRS.

Secondly, not having workmans comp can be a bad deal as well, especially if somebody gets hurt badly. Most folks if they are hurt bad enough are going to look for someone to pay. If they are mowing and a rock flies into someones eye (yes it does happen) you best be ready. As bad as I hate paying workers comp it is a necessary evil. I wouldn't play the odds on either topic if I were you.

MnGreen
06-19-2010, 02:54 PM
The admissions you have stated and questions asked are almost hard to believe.
I can't imagine putting that stuff out in the open like you have.

Work comp, taxes and liability are not issues of "choice" and or subject to "waivers" you want signed.
You better get "solo" and stay solo asap. Between all workers current and former, as well as your spiel on here,
big can of worms running wild.

nepatsfan
06-19-2010, 03:14 PM
I pay plenty of taxes! so thats not the issue, and the insurance thing, that is another story entirely, but it is by choice, Ive never had workers comp on anybody Ive had working for me, and while I am a pretty small operation, my friend that used to do this, had 2-3 crews going out each day and he never had any problems, as he had all his "employees" or subcontractors sign that form, although maybe he was just lucky, and I dont know what he "considered" his workers, employees, subcontractors, independent? It seems like it all depends on "what" you consider them and how they work and report to work... interesting. What if this person sends me a bill for their services each week?

You have plenty of issues here. There is nothing that an employee can sign that will get you out of this if the dept of industrial accidents shows up looking for comp. You can consider the employees monkeys or dogs if you want to. Have them sign a paper that says they are a dog and they dont need to be insured. (sounds pretty silly doesnt it? that is the idea behind what you are talking about. Having someone sign something that isnt true isnt going to hold up with anyone when it is obvious that it isnt true.) The irs will realize they are humans and they are working for you. Instead of looking for ways to BEAT the system why dont you comply and not be one of those lowballing scabs that we all talk about.

mbrew
06-19-2010, 03:19 PM
You are so screwed up you have no business with anybody working for you. You are a disaster waiting for a place to happen and you're just too dumb to know it. In my 10 plus years of heavy message board involvement that's the most blunt statement I've ever made and its justified. The sad thing is that since you have other people working with you, you could take them down with you.

I wonder just what kind of taxes you are paying. I very much doubt that you're claiming all of your mowing income based on the statements you've made. In fact I doubt you have the wherewithal to execute a federal business tax return.

The guy that cuts a couple of yards a week out of the back of his car isn't the problem with this industry, you are.

ACA L&L
06-19-2010, 03:21 PM
Im pretty sure there are alot of guys running with one guy, a friend, family member, whatever, but when you hire off the street you have to cover your own a$$. unless you know sumin we dont. you will last longer running a legitimate business. And you will actually save money by doing so. the fines are HUGE....

Frontier-Lawn
06-19-2010, 04:25 PM
I consider tax evasion worse than cocaine possession.

so does the fed gov, if they cant get you on the cocaine as a sure thing and 100% conviction on the tax for jail they will.





--------------------

BP brands to boycott include Castrol, Arco, Aral, am/pm, Amoco, and Wild Bean ****.

clydebusa
06-19-2010, 05:27 PM
This is the reason, I print or send all insurance, workman comps out to every customer I have. Then the $25 to $35 job can be justified to $40 to $50. Am I perfect no, do I bend the rules a little,,, yes. I do know of a couple contractors who have tied one on with the IRS and all went bankrupt! As one CPA told me "if it quacks like a duck and walks like a duck it is a duck!"

jvanvliet
06-20-2010, 06:36 AM
I don't know if your people are independent subcontractors the way you have it setup. As I wrote above, you can state anything you want in a contract. The IRS won't give 2 hoots about it. For them to qualify as subcontractors you basically give them a list of lawns to cut for the week (or day if you have a daily contract written up and signed by all involved parties) and tell them to cut them. If they start riding in your vehicle, using your machines and cut them in the order that you set then they are employees.

They must be independent to be subcontractors.

Look. It doesn't matter to me what most of you guys do. I gave up on that long ago. I just want to try to keep the one guy that cares out of trouble in the event the IRS does audit them.

They get the route, & the task to be accomplished daily for the duration of their contract. That's the contract. What order they do it in is up to them. They ride in my vehicle if they want to (usually they do) the can use their own equipment or mine, if they want to, (usually they want to use mine).

That they choose to ride in my vehicle or choose to use my equipment doesn't render them employees. And since I'm not operating a taxi service the route I take is the one they take, if they want a ride. They can choose at any time not to work at a particular property, if they want to. As long as the task is accomplished in accordance to the contract I don't care and if it isn't, they have broken the contract and are no longer working. It's that simple.

I worked for some time as a realtor, I could come to the office if I wanted to, I could use their computers if I wanted to, I could utilize their marketing material if I wanted to, I could ride in the brokers car for open house caravan if I wanted to... I was still a 1099 independent contractor.

Many call centers are set up the same way, you come in if you want to, use their phones if you want to, but you better be documenting a certain number of calls.

We can split hairs on the what if's and yes buts, independent contractors have a responsibility to adhere to the terms of their agreement, such as leaving a clean work site, finishing certain tasks within a certain amount of time, completing the job in a workmanlike manner, etc. etc. They can't operate without limitations or restraint to do anything they want in any manner they want to, that's why you have a contract.

If you are going to go 1099, having an independent contractor agreement drawn up is wise, having it reviewed by an attorney is wiser. The IRS is arbitrary and capricious in their rulings on virtually everything, even they don't know what the tax code is.

Anyway, playing it safe is the best advice, using a payroll company is even better. Empoyees are expensive and increase my labor overhead exponentially, so before I make the investment in an individual and put him on my books as an employee, he's a 1099.

punt66
06-20-2010, 07:25 AM
They get the route, & the task to be accomplished daily for the duration of their contract. That's the contract. What order they do it in is up to them. They ride in my vehicle if they want to (usually they do) the can use their own equipment or mine, if they want to, (usually they want to use mine).

That they choose to ride in my vehicle or choose to use my equipment doesn't render them employees. And since I'm not operating a taxi service the route I take is the one they take, if they want a ride. They can choose at any time not to work at a particular property, if they want to. As long as the task is accomplished in accordance to the contract I don't care and if it isn't, they have broken the contract and are no longer working. It's that simple.

I worked for some time as a realtor, I could come to the office if I wanted to, I could use their computers if I wanted to, I could utilize their marketing material if I wanted to, I could ride in the brokers car for open house caravan if I wanted to... I was still a 1099 independent contractor.

Many call centers are set up the same way, you come in if you want to, use their phones if you want to, but you better be documenting a certain number of calls.

We can split hairs on the what if's and yes buts, independent contractors have a responsibility to adhere to the terms of their agreement, such as leaving a clean work site, finishing certain tasks within a certain amount of time, completing the job in a workmanlike manner, etc. etc. They can't operate without limitations or restraint to do anything they want in any manner they want to, that's why you have a contract.

If you are going to go 1099, having an independent contractor agreement drawn up is wise, having it reviewed by an attorney is wiser. The IRS is arbitrary and capricious in their rulings on virtually everything, even they don't know what the tax code is.

Anyway, playing it safe is the best advice, using a payroll company is even better. Empoyees are expensive and increase my labor overhead exponentially, so before I make the investment in an individual and put him on my books as an employee, he's a 1099.

that is illegal and your another scrub. I hope the irs and department of labr monitors this site.

Hell on Blades
06-20-2010, 08:42 AM
First, there is always a right and wrong way to do things, most of us operate somewhere in between. I'd like to say that I do things right 90% of the time. I waive worker's comp because I am solo. I turn down jobs that require it as part of the contract anyway. I've set up a separate business checking account solely for the purpose of tracking all expenses and receivables. (As a matter of fact, when I re-started the business three years ago, I had to include an extra $100 deposit on a deck just to have the money to open the account.) My wife babysits in our home and that money is claimed under "extra income".

However, I won't say that occasionally light bulbs don't get purchased on the same receipt with fertilizer or that sometimes a return after a job goes for cash or store credit.

We all try to do the right thing (or should try), and it really upset me when people don't. MieKle knows the problems that Boone County, Florence, and Erlanger, KY are facing with income issues. The recent influx of immigrants have driven base wages WAY down, especially in industries such as landscaping. I'm sure that he also understands that paying under the table, while being easier accounting, adds to this problem by not encouraging regular employment. Not to mention the possibility that some of his employs may be drawing unemployment or welfare, adding to the strain on our limited municipal budgets. By not paying medical, he could be a contributing factor to St Luke hospital having to sell to St Elizabeth and to the Catholic Hospital Network tightening it's reigns. If Medicare was being paid and/or health insurance offered, our medical outlook may improve.

OK, nothing personal MieKle, I'm just taking an extreme point of view to illustrate my point. This problem will get much worse in the next couple years as health care reforms come online. Wait until the small guy that employs 15 has to offer health insurance.

On the flip side of this coin, MieKle-- If you decide to change the way you're doing business, call me- you can subcontract to me as a business without paying extras.:usflag::usflag::usflag:

MikeKle
06-20-2010, 09:03 AM
How is that illegal, if they are an independent contractor, just like we are? Do your customers have workers comp on you? They have hired you, agreed to a ray rate, basically tell you when to work, in a way, weekly, bi-weekly, on fridays, mondays, etc.

I actually talked with another lawn company yesterday, and he gave me a generic form of theirs that they use for new hires. It is basically what I was wanting. He has used this form for years with no problems, and his company is much bigger than mine, He has around 5-6 employees at any given time, I dont appreciate the comments about being a scrub, I pay my taxes and am on a payment plan nearly all year with the IRS, year after year!! In the past I have used friends to help me out, and I will likely continue to do the same. I dont know about the areas you all operate in, but around here, 90% of companies operate like this, as I know most of them, and nobody has ever had any problems due to this? BTW, the IRS will use any loophole and technicality they can to nail you, even if it is some obscure tax law no one has used in years, but if a citizen trys to do the same to get around them, they are ridiculed for it? I encourage anyone to get out of paying all the taxes they can, LEGALLY though! and if that means using technicalities and/or obscure means and methods, then so be it, the irs does the exact same thing.

jhawk60
06-20-2010, 09:40 AM
You have stated that you are trying to circumvent the law from the very beginning, your title is "form for new employees to sign" not "form needed for subcontractors".

I've seen people in the construction industry get called to the carpet on this before and it became a very expensive lesson for them. Those that were able to ride out the IRS crawling up their backside with a microscope call their workers what they are, employees, and they make sure they use the IRS guidelines for any subcontractors they do use.

If you operate this way you may indeed get away with it, but there are many things that can go wrong, if an employee get hurt bad you will be on the hook for workman's comp, if you let a guy go and he decides to file for unemployment compensation. form or not, you will lose.

Your form may seem like the cheap way out right now, but it could end up being very expensive in the long run.

As I said, you may get away with it, but do you really think those 16,000 new IRS agents are just going to be sitting on their thumbs?

whosedog
06-20-2010, 09:59 AM
Large corporations hire ex IRS agents to help them figure out every loophole they can use to avoid paying taxes;they also pay lobbyists to influence congress so laws are passed that are favorable for their business.This country is not about the little people,it's government of,by and for the corporations.They outsourced most manufacturing jobs and are doing the same with IT,just so the rich can get richer;stock options ,perks,golden parachutes etc.In the 50's most large corps paid their fair share of taxes,not anymore,the secretary who answers the phone pays more percentage of her income in tax than some of these corps.So you go for it Mike ,if they can get away with outsourcing Americans jobs while recieving taxpayer supported subsidies,do it;just consult a lawyer first.

mbrew
06-20-2010, 10:04 AM
How is that illegal, if they are an independent contractor, just like we are? Do your customers have workers comp on you? They have hired you, agreed to a ray rate, basically tell you when to work, in a way, weekly, bi-weekly, on fridays, mondays, etc.

I actually talked with another lawn company yesterday, and he gave me a generic form of theirs that they use for new hires. It is basically what I was wanting. He has used this form for years with no problems, and his company is much bigger than mine, He has around 5-6 employees at any given time, I dont appreciate the comments about being a scrub, I pay my taxes and am on a payment plan nearly all year with the IRS, year after year!! In the past I have used friends to help me out, and I will likely continue to do the same. I dont know about the areas you all operate in, but around here, 90% of companies operate like this, as I know most of them, and nobody has ever had any problems due to this? BTW, the IRS will use any loophole and technicality they can to nail you, even if it is some obscure tax law no one has used in years, but if a citizen trys to do the same to get around them, they are ridiculed for it? I encourage anyone to get out of paying all the taxes they can, LEGALLY though! and if that means using technicalities and/or obscure means and methods, then so be it, the irs does the exact same thing.

I really can't believe that I'm getting sucked into this, but here goes:

1) When you started this thread you said nothing about how to pay as a contractor, you stated that "Basically i am paying cash, under the table" The only reason for paying that way is to avoid taxes. You don't claim your income so you don't want to issue 1099's or W'2 that would demonstrate that you had income

2) There are all kinds of tests to determine whether an individual doing work for you is an employee or a contractor, but the one that I've found the easiest and the most useful is: Are the person's services available to the general public or just to you. If they are available to the public, the IRS and the courts will expect to see some corroboration of that such as advertisements, the ownership or rental of equipment necessary to do the job
without your support etc.

3) I think your 90% number is high, but I certainly agree that a majority of the operators that have employees in my area are using illegal aliens, paying under the table, or improperly paying their employees as contractors. I knew that when I started this business, and I'm all grown up and ready to deal with that, but when I see a guy that's making a killing by saving up to 40% on his labor and then if the guy gets hurt I know that I and the other tax payers are going to suck up the bill for his medical care it doesn't put me in a particularly good mood. Maybe you guys that are doing this stuff thought that the guy you were paying $10 bucks an hour to on a 1099 were buying workman's comp or health insurance? Yep - that must be it.

This is a free country and I really don't like to see a bunch of regulations. In fact I'd really like to see the tax codes radically changed, but the reality is they are what they are for now. I hope that one of your (using your term) "employees" doesn't get hurt, because you and them are going to be up a tree. On the other hand, I'd really like to see you execute some of those forms of yours and then have the IRS climb up your A** You'll be working to pay off Uncle for years to come.

MikeKle
06-20-2010, 10:20 AM
Large corporations hire ex IRS agents to help them figure out every loophole they can use to avoid paying taxes;they also pay lobbyists to influence congress so laws are passed that are favorable for their business.This country is not about the little people,it's government of,by and for the corporations.They outsourced most manufacturing jobs and are doing the same with IT,just so the rich can get richer;stock options ,perks,golden parachutes etc.In the 50's most large corps paid their fair share of taxes,not anymore,the secretary who answers the phone pays more percentage of her income in tax than some of these corps.So you go for it Mike ,if they can get away with outsourcing Americans jobs while recieving taxpayer supported subsidies,do it;just consult a lawyer first.

I agree, and many of these huge companies do not pay a dime in taxes, but its OK for a huge corp to do it..right? I think many guys in this industry pay under the table is because the work comes and goes, it may be busy in spring but if a drought hits in July, then you dont need 3 employees to mow for you, and they arent quite big enough of a company to pay into unemployment and workers comp yet. We are not the only industry that operates this way, cleaning services, smaller construction companies, tree services, window cleaning, etc. They all pay some of their employees on an "as needed", cash basis. kind of like a day laborer or helper for the days only when its very busy.

topsites
06-20-2010, 10:56 AM
Agriculturally speaking, whether you pay your taxes or not, you pay for it.
THAT is the most compelling reason WHY I try my BEST to pay them <- Don't start on me, yes I think MOST of us at LEAST TRY!
That is the CLOSEST you'll ever hear MOST any Lco admit to anything because the fact is nobody here is TRYING to do it wrong.

You see either way it's going to cost me, doesn't matter how you look at it.
Ever hear of what goes around, comes around?

I realize not every Lco and probably the majority of them are not 100% perfect up to par, but that is no excuse
for you or anyone to just say "oh well they don't do it right so why should I?"
Because at least in my case I am TRYING!
And I dare say MOST fall in a similar category and in most cases when they're doing it wrong
it's not for a lack of want of doing it right because they WANT to do it right, most Lco's do.

You...
Need to find some kind of way to turn yourself around, it's more than just this one problem,
as was already pointed out it sounds like something upstairs is all wrong.

Maybe sit down and do some long, hard thinking.

I don't know but you better get it straight because they are right, you won't last long doing it wrong.
The customers will have you for lunch, they're not stupid either.

mbrew
06-20-2010, 11:03 AM
Wow! The short sightedness of some people on this board is amazing! The tax codes are screwed up, there's no doubt of that, but in no tax code is a successful corporation going to pay taxes. In reality, their customers are going to pay them. Yes I know, woe is me, that's good for the big guy but little ole me can't ever get ahead, I have to pay my taxes. Man, just about every other thread on this board is about pricing, lowballers and scrubs where people are admonished to consider items like taxes, insurance etc in their pricing structure. If you're following that (very good) advice, who's paying your taxes? Your customers are because your taxes are built in to your pricing structure.

And for those of you that are complaining about corporations outsourcing jobs, I sure hope you're not hiring illegals because that's no better and in some cases far worse and paying under the table or illegally on 1099's is not a whole lot better.

MikeKle says "....they arent quite big enough of a company to pay into unemployment and workers comp yet." Then they aren't big enough to have employees yet. If those costs aren't built in to your pricing structure, you're pricing structure is screwed up.

I'm certainly no supporter of corporate America. In fact I'm in this business because I've had it with that whole deal. The "best and brightest" have done some incredibly stupid things in the last few years that we all have paid for. I'm also not a big fan of the way members of this forum call others names like lowballers, trunk slammers, scags etc. but on a board where people seem to pride themselves on their professionalism, I won't allow this obvious lack of it to go unchallenged.

MikeKle, you are certainly not a professional.

punt66
06-20-2010, 12:26 PM
How is that illegal, if they are an independent contractor, just like we are? Do your customers have workers comp on you? They have hired you, agreed to a ray rate, basically tell you when to work, in a way, weekly, bi-weekly, on fridays, mondays, etc.

I actually talked with another lawn company yesterday, and he gave me a generic form of theirs that they use for new hires. It is basically what I was wanting. He has used this form for years with no problems, and his company is much bigger than mine, He has around 5-6 employees at any given time, I dont appreciate the comments about being a scrub, I pay my taxes and am on a payment plan nearly all year with the IRS, year after year!! In the past I have used friends to help me out, and I will likely continue to do the same. I dont know about the areas you all operate in, but around here, 90% of companies operate like this, as I know most of them, and nobody has ever had any problems due to this? BTW, the IRS will use any loophole and technicality they can to nail you, even if it is some obscure tax law no one has used in years, but if a citizen trys to do the same to get around them, they are ridiculed for it? I encourage anyone to get out of paying all the taxes they can, LEGALLY though! and if that means using technicalities and/or obscure means and methods, then so be it, the irs does the exact same thing.

why are you on a payment plan? You got caught ha?

nepatsfan
06-20-2010, 12:44 PM
why are you on a payment plan? You got caught ha?

Although I am amazed at this whole thread and the guy trying to justify himself as a lowballer I will say that unfortunately I know how this goes. About 6 or 7 years ago I had to do the same thing. It can be that when you file your taxes your account tells you that you owe X amount of dollars. If you dont have it you go on a payment plan with the irs, with interest. I paid it off very quickly because it scared the sh*t out of me to be in that situation but it wasnt about getting caught. taxes were filed on time and you apply for a payment plan. It sucks I havent done it since, since we started filing quarterly.

punt66
06-20-2010, 12:46 PM
Although I am amazed at this whole thread and the guy trying to justify himself as a lowballer I will say that unfortunately I know how this goes. About 6 or 7 years ago I had to do the same thing. It can be that when you file your taxes they give your account tells you that you owe X amount of dollars. If you dont have it you go on a payment plan with the irs, with interest. I paid it off very quickly because it scared the sh*t out of me to be in that situation but it wasnt about getting caught. taxes were filed on time and you apply for a payment plan. It sucks I havent done it since, since we started filing quarterly.

ohh, i never allowed myself to be in that position.

nepatsfan
06-20-2010, 12:48 PM
ohh, i never allowed myself to be in that position.

Good for you, its a scary feeling.

punt66
06-20-2010, 12:56 PM
i am sure it is and thats why i am carefull.

Cboy7
06-20-2010, 02:50 PM
its been established that mikekle is not legit in many areas of business, so it is a complete waste of time responding to his inane threads.

Hoy landscaping
06-20-2010, 07:19 PM
even if you had a form it wouldn't help. any contract that states doing something illegal will not hold up in court. Maybe try to get them as independent contractors.

punt66
06-20-2010, 10:16 PM
even if you had a form it wouldn't help. any contract that states doing something illegal will not hold up in court. Maybe try to get them as independent contractors.

employees cannot be independant contractors. They must have their own equipment. Pay their own fuel. Work on their own schedule.

JB1
06-20-2010, 10:23 PM
Forrest Gump: Stupid is as stupid does.

clydebusa
06-21-2010, 05:33 AM
I really can't believe that I'm getting sucked into this, but here goes:

1) When you started this thread you said nothing about how to pay as a contractor, you stated that "Basically i am paying cash, under the table" The only reason for paying that way is to avoid taxes. You don't claim your income so you don't want to issue 1099's or W'2 that would demonstrate that you had income

2) There are all kinds of tests to determine whether an individual doing work for you is an employee or a contractor, but the one that I've found the easiest and the most useful is: Are the person's services available to the general public or just to you. If they are available to the public, the IRS and the courts will expect to see some corroboration of that such as advertisements, the ownership or rental of equipment necessary to do the job
without your support etc.

3) I think your 90% number is high, but I certainly agree that a majority of the operators that have employees in my area are using illegal aliens, paying under the table, or improperly paying their employees as contractors. I knew that when I started this business, and I'm all grown up and ready to deal with that, but when I see a guy that's making a killing by saving up to 40% on his labor and then if the guy gets hurt I know that I and the other tax payers are going to suck up the bill for his medical care it doesn't put me in a particularly good mood. Maybe you guys that are doing this stuff thought that the guy you were paying $10 bucks an hour to on a 1099 were buying workman's comp or health insurance? Yep - that must be it.

This is a free country and I really don't like to see a bunch of regulations. In fact I'd really like to see the tax codes radically changed, but the reality is they are what they are for now. I hope that one of your (using your term) "employees" doesn't get hurt, because you and them are going to be up a tree. On the other hand, I'd really like to see you execute some of those forms of yours and then have the IRS climb up your A** You'll be working to pay off Uncle for years to come.



Couldn't said it better!Thumbs Up

mcw615
06-21-2010, 08:14 AM
1) You must not be a business man, just someone who gives a job/lawn a price and hopes to make money, OBVIOUSLY.

My advise, know your business, create a break down budget, and modify your price accordingly.

I am going to give you the general outline of my business, this is per billable hour, factoring 35.5 billable hours will be invoiced on a 45 hour work week, drive time, load unload etc.

Labor + Labor Burden. Cost of labor, taxes, insurance, and benefits.
Overhead Recovery. Owner salaries, accountant, phone, utilities, office rent etc.
Equipment and Fuel. Costs to operate equipment: Gas, Equip, Parts/Repairs, Maintenance
Winter Labor. Costs to keep employees on payroll through the winter to retain them.
Truck and Trailer Costs.
PLANNED PROFIT. HOW MUCH PROFIT TO MAKE?

Now... create you budget for your hourly billable rate, then you can as well factor in your down time. For us, we charge for what it costs to show up. Takes 10 min of drive time for 3 employees, thats $12.00 on top of the billable hourly rate.

Know your business and make changes to operate legally and make a profit. Never think something is 'PAID' for, always break the life of it down. Then create seperate accounts as money comes in, and deposit those funds to each account so you know where you money is going and is supposed to be going. Costs are costs, you have to know if your making a profit.

jvanvliet
06-21-2010, 07:12 PM
that is illegal and your another scrub. I hope the IRS and department of labor monitors this site.

What the heck is a scrub...

And you don't know your butt from a hole in the ground if you believe that having a contractual agreement with a subcontractor that outlines the terms and conditions of the job along with timelines for performance, work specifications and completion is illegal.

I suppose in the fair state of Connecticut you just give the guy some money, tell him what you want done and when he does what he wants to do, when he wants to do it, it's just fine with you.

In Florida, professionals write CONTRACTS that outline the specifications of the work, the specifications of the materials, standards of performance and timelines for completion. I do that when somebody works on my house, my fences, my pool, whatever. That doesn't make them my employees.

The Fed, the States and even the hole in the ground you call a City writes contracts with subcontractors that have specifications and completion times. In fact, in many cases there are penalties written into the CONTRACT for failing to meet deadlines or standards. They do not become employees of the Fed, State or city for having to meet the specifications in the CONTRACT. Nor do they become employees if the municipality offers the labor crew a ride to work.

The IRS has been here, and the department of labor, OSHA and whatever regulatory agency you can think of is welcome to check out my operations. Do you meet all of your OSHA requirements? I'll wonder if you even know who and what they are and what your responsibilities are. (Hint, what is a fire extinguisher and a first aid kit, and ear plugs and eye protection?)

When I engage a 1099 subcontractor it is within the guidelines of 1099 independent contractors. The duration of the contract is for 30 days ren-ewable by mutual agreement. All income to the 1099 is reported to my WC carrier which I do monthly and I am charged $3.00 per $100 paid out to the sub... monthly; he is covered under my comp policies just in case and my liability policies as well. That doesn't make him an employee, that just makes me careful.

After 90 days, if I decide to keep him, I pull out his W-9 along with the photo copy of his SS card and ID and add him to the payroll as a legal EMPLOYEE. Until then, he is a legal 1099. I'm not eating the costs of putting an employee on the payroll until I know he's going to stay as an employee, I don't have the kind of money that guys in Connecticut have and my margins are tighter.

I don't have a big turnover, but when I need a man for short term labor, I do one of two things, I go to a payroll company, which is expensive and I get a pig in a poke or I enter into a CONTRACTUAL agreement with an individual of my choosing.

Is you plumber your employee? How about your electrician? When you had your house built, did you have a contract with the builder? Was he your employee? I'm not running a mickey mouse operation off the back of a 20 year old pick up truck and my agreements have been reviewed and are acceptable to standard.

Some guys here got it right... some guys circumvent the law and others work within it... and you can't fix stupid.

CLARK LAWN
06-21-2010, 07:19 PM
I think you been in the sun to long

punt66
06-21-2010, 08:10 PM
What the heck is a scrub...

And you don't know your butt from a hole in the ground if you believe that having a contractual agreement with a subcontractor that outlines the terms and conditions of the job along with timelines for performance, work specifications and completion is illegal.

I suppose in the fair state of Connecticut you just give the guy some money, tell him what you want done and when he does what he wants to do, when he wants to do it, it's just fine with you.

In Florida, professionals write CONTRACTS that outline the specifications of the work, the specifications of the materials, standards of performance and timelines for completion. I do that when somebody works on my house, my fences, my pool, whatever. That doesn't make them my employees.

The Fed, the States and even the hole in the ground you call a City writes contracts with subcontractors that have specifications and completion times. In fact, in many cases there are penalties written into the CONTRACT for failing to meet deadlines or standards. They do not become employees of the Fed, State or city for having to meet the specifications in the CONTRACT. Nor do they become employees if the municipality offers the labor crew a ride to work.

The IRS has been here, and the department of labor, OSHA and whatever regulatory agency you can think of is welcome to check out my operations. Do you meet all of your OSHA requirements? I'll wonder if you even know who and what they are and what your responsibilities are. (Hint, what is a fire extinguisher and a first aid kit, and ear plugs and eye protection?)

When I engage a 1099 subcontractor it is within the guidelines of 1099 independent contractors. The duration of the contract is for 30 days ren-ewable by mutual agreement. All income to the 1099 is reported to my WC carrier which I do monthly and I am charged $3.00 per $100 paid out to the sub... monthly; he is covered under my comp policies just in case and my liability policies as well. That doesn't make him an employee, that just makes me careful.

After 90 days, if I decide to keep him, I pull out his W-9 along with the photo copy of his SS card and ID and add him to the payroll as a legal EMPLOYEE. Until then, he is a legal 1099. I'm not eating the costs of putting an employee on the payroll until I know he's going to stay as an employee, I don't have the kind of money that guys in Connecticut have and my margins are tighter.

I don't have a big turnover, but when I need a man for short term labor, I do one of two things, I go to a payroll company, which is expensive and I get a pig in a poke or I enter into a CONTRACTUAL agreement with an individual of my choosing.

Is you plumber your employee? How about your electrician? When you had your house built, did you have a contract with the builder? Was he your employee? I'm not running a mickey mouse operation off the back of a 20 year old pick up truck and my agreements have been reviewed and are acceptable to standard.

Some guys here got it right... some guys circumvent the law and others work within it... and you can't fix stupid.

its not state. Its federal! Read the law. ITS ILLEGAL. GOOD LUCK WHEN YOU GET CAUGHT. I guess they use their own mowers to?

nepatsfan
06-21-2010, 08:16 PM
What the heck is a scrub...

And you don't know your butt from a hole in the ground if you believe that having a contractual agreement with a subcontractor that outlines the terms and conditions of the job along with timelines for performance, work specifications and completion is illegal.

I suppose in the fair state of Connecticut you just give the guy some money, tell him what you want done and when he does what he wants to do, when he wants to do it, it's just fine with you.

In Florida, professionals write CONTRACTS that outline the specifications of the work, the specifications of the materials, standards of performance and timelines for completion. I do that when somebody works on my house, my fences, my pool, whatever. That doesn't make them my employees.

The Fed, the States and even the hole in the ground you call a City writes contracts with subcontractors that have specifications and completion times. In fact, in many cases there are penalties written into the CONTRACT for failing to meet deadlines or standards. They do not become employees of the Fed, State or city for having to meet the specifications in the CONTRACT. Nor do they become employees if the municipality offers the labor crew a ride to work.

The IRS has been here, and the department of labor, OSHA and whatever regulatory agency you can think of is welcome to check out my operations. Do you meet all of your OSHA requirements? I'll wonder if you even know who and what they are and what your responsibilities are. (Hint, what is a fire extinguisher and a first aid kit, and ear plugs and eye protection?)

When I engage a 1099 subcontractor it is within the guidelines of 1099 independent contractors. The duration of the contract is for 30 days ren-ewable by mutual agreement. All income to the 1099 is reported to my WC carrier which I do monthly and I am charged $3.00 per $100 paid out to the sub... monthly; he is covered under my comp policies just in case and my liability policies as well. That doesn't make him an employee, that just makes me careful.

After 90 days, if I decide to keep him, I pull out his W-9 along with the photo copy of his SS card and ID and add him to the payroll as a legal EMPLOYEE. Until then, he is a legal 1099. I'm not eating the costs of putting an employee on the payroll until I know he's going to stay as an employee, I don't have the kind of money that guys in Connecticut have and my margins are tighter.

I don't have a big turnover, but when I need a man for short term labor, I do one of two things, I go to a payroll company, which is expensive and I get a pig in a poke or I enter into a CONTRACTUAL agreement with an individual of my choosing.

Is you plumber your employee? How about your electrician? When you had your house built, did you have a contract with the builder? Was he your employee? I'm not running a mickey mouse operation off the back of a 20 year old pick up truck and my agreements have been reviewed and are acceptable to standard.

Some guys here got it right... some guys circumvent the law and others work within it... and you can't fix stupid.
If they use their own truck and their own equipment than you are absolutely right. If you hand them a list of 40 lawns and say make sure these lawns are done weekly and they use their own trucks, and equipment than its perfectly legal.

punt66
06-21-2010, 08:40 PM
If they use their own truck and their own equipment than you are absolutely right. If you hand them a list of 40 lawns and say make sure these lawns are done weekly and they use their own trucks, and equipment than its perfectly legal.

and their own insurance, fuel, consumables, pay workers comp for their employees etc etc.