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  #31  
Old 02-08-2013, 09:09 PM
205mx 205mx is offline
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Join Date: May 2011
Location: Nashville, TN
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Quote:
Originally Posted by jsslawncare View Post
No, he is saving money by not paying payroll taxes. But I'm no accountant.
But payroll tax (7-8% should be lower than his effective tax rate IF he owns a company that pays a high enough tax bracket. Which he SHOULD be if he's big enough to need help. Example my effective tax rate was 10% on 67,000 this year.

Now, factor in your state income tax.

I'm in TN so I don't know much ab state income tax :-)
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  #32  
Old 02-08-2013, 11:03 PM
205mx 205mx is offline
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Originally Posted by xclusive View Post
Yes and no. By the time he is done paying all the different taxes you have to pay when you have employees on the books, I am sure it all equals out. It does suck for his employees though cause they cannot collect unemployment during the off season though.
Sounds like you've ran all the numbers and know all the tax costs to a T
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  #33  
Old 02-09-2013, 06:06 AM
Smallaxe Smallaxe is offline
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If he pays anyone over $400.00, he needs to give that person a Form 1099-MISC... Failure to do so results in a fine... and if the IRS determines that you are purposely defrauding the IRS so that your helper doesn't pay taxes of his income, I think they'll make you suffer for that, besides giving your helper a bill for what they believe the back taxes may have been... you can pay in cash, check or MO as long as the 1099 is mailed in January...
It's called Sub-Contracting and perfectly legal... No Payroll taxes or Comp. required...
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Now that I know that clay's texture(platelets) has nothing to do with water infiltration, percolation, or drainage
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  #34  
Old 02-09-2013, 08:17 AM
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Greg78 Greg78 is online now
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Quote:
Originally Posted by Smallaxe View Post
If he pays anyone over $400.00, he needs to give that person a Form 1099-MISC... Failure to do so results in a fine... and if the IRS determines that you are purposely defrauding the IRS so that your helper doesn't pay taxes of his income, I think they'll make you suffer for that, besides giving your helper a bill for what they believe the back taxes may have been... you can pay in cash, check or MO as long as the 1099 is mailed in January...
It's called Sub-Contracting and perfectly legal... No Payroll taxes or Comp. required...
No it is not. For legit subs it is but not for employees .


http://www.irs.gov/Businesses/Small-...or-Employee%3F
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  #35  
Old 02-09-2013, 08:27 AM
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ELS Landscape ELS Landscape is offline
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Location: Grand Prairie, Texas
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I guess you could do like the topless bars and charge the guys a fee to use your equipment and a percent of their tips.

These guys are employees and what is being done is against the law.
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  #36  
Old 02-09-2013, 08:30 AM
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clydebusa clydebusa is online now
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In the last 8 years I have hired some 17 to 20 employees. I have found that many of them only make it a few days. So about 2 years ago I started paying cash for the 1st 2 weeks. If they make it past that they go on the payroll.
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  #37  
Old 02-09-2013, 09:02 AM
Smallaxe Smallaxe is offline
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Quote:
Originally Posted by Greg78 View Post
No it is not. For legit subs it is but not for employees .


http://www.irs.gov/Businesses/Small-...or-Employee%3F
IF the IRS determines that the people you're paying are INDEED employees you could go to jail for quite a spell for NOTW/Holding FICA on Form W-2...
I was referring to Sub-Contracting ONLY...
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Now that I know that clay's texture(platelets) has nothing to do with water infiltration, percolation, or drainage
,,, I wonder what does...
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  #38  
Old 02-09-2013, 10:06 AM
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Patriot Services Patriot Services is offline
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So many guys on here that really need to read up on business 101. Solo is one set of rules, adding even one pt employee changes everything and requires you to learn a whole lot more information.
Posted via Mobile Device
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  #39  
Old 02-09-2013, 11:12 AM
GravelyWoman GravelyWoman is offline
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Location: Fairhope, AL
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Quote:
Originally Posted by xclusive View Post
All he has to say is he just hired them if they get hurt and he will be ok to submit a claim for workers comp.
My workmen's comp insurance performs an audit at the end of every year of my employee's and how much I paid out in salaries. Wow, I could not go to sleep at night having such bad business practices in place! He will eventually get caught, one way or another!!! Just not worth the risk to me!

GW
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  #40  
Old 02-09-2013, 06:00 PM
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Pietro Pietro is online now
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All cash would be sweeeet thou!
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