1099 for workers

Discussion in 'Starting a Lawn Care Business' started by roger miller, Dec 19, 2005.

  1. roger miller

    roger miller LawnSite Member
    Posts: 31

    been watching this website for a while and decided to become a member. great web site. this is my first year of mowing. last year i had 6 accounts and this year it looks like i am between 70-80 so far. have another 50-100 possible. i mow for cabin rental companies in the smoky mountains and try to get complete resorts so driving does not happen during the day, just drive to one resort and stay there all day. do any of you 1099 your employees so that you don't pay taxes on them so their wages are subcontracted out? my accountant told me to do it that way.
  2. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569

    Then you and your accountant will be sharing a federal jail cell if you do because that is VERY ILLEGAL and the IRS keeps a very close check on our industry because so many clowns try and get away with it.

    A 1099 and it's legal use is very simple. If and ONLY IF you land a job and then in turn sub-contract that job out to another cutter that uses his own equipment and cuts it on his own schedule and you have no say-so then he is a true contract employee and you do not have to pay taxes on him and can 1099 him.

    If however it is YOUR equipment used, your schedule that it is cut by and you make the decisions then he is YOUR employee regardless and you must pay taxes, FICA, Unemployment on him and W2 him.

    You need to drop the accountant that told you otherwise like a hot potato because he is either 1) Stupid, 2) a Crook, 3) Lazy or 4) all of the above.

    Also use a true CPA not justa an accountant because CPA's have formal training and must meet state and federal regs and pass their exams...on the other hand anyone can call themselves an accountant with no training and no testing.
  3. Mueller Landscape Inc

    Mueller Landscape Inc LawnSite Senior Member
    Posts: 489

    Find another CPA.
  4. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569

    ALso if you have had these employees for the entire year or even part of it and have not been holding out the taxes, FICA, UEI, and your match and paying it monthly as required and submitting your quarterly 941's then you are already in financial trouble with the IRS and your State and the penalties alone will probably exceed the other liabilities..
  5. roger miller

    roger miller LawnSite Member
    Posts: 31

    i'm glad i asked. i had no one helping me this year but want to make sure everything is set for the next year. how much does an employee cost you with taxes and all that?
  6. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569

    It will depend on a lot of factors but in general if you pay the employee say $10 an hour you will actually be paying around $14-$15 an hours, NOT including workers comp coverage if you need it.
  7. mcwlandscaping

    mcwlandscaping LawnSite Gold Member
    Posts: 3,164

    Welcome to LS, youll enjoy it!

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