I'm a 1099 "employee"..questions

Discussion in 'Business Operations' started by jermana232, Mar 19, 2013.

  1. mowing4cash

    mowing4cash LawnSite Member
    from us
    Posts: 188

    Keep looking for a job and get your self out of that. Best to be w2 unless he was paying a ton more. Taxes are a lot less stressful.
     
  2. JCLawn and more

    JCLawn and more LawnSite Fanatic
    from MI
    Posts: 5,206

    Ok in reality the way taxes work your paying around 5 percent more than if you were w2 but you can write off all your meals (if you talk business wink, wink), clothing, gas or car milage, phone bill, tools, office equipment and so on. Personally my insurance covers my sub contractors. Unless you making more than 15 grand a year your paying less taxes if you have any write offs.
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  3. JCLawn and more

    JCLawn and more LawnSite Fanatic
    from MI
    Posts: 5,206

    I was way off. Its 13.3 percent. Just add those deductions up and it won't be bad.
     
    Last edited: Mar 19, 2013
  4. Roger

    Roger LawnSite Fanatic
    Posts: 5,917

    It is not a matter of what "you" or any other LS member wishes to call it. The IRS has very clear guidelines on who is an employee, and who is a contractor.

    As a contractor, you must have all your own tools, set your own schedule, and work independently. If you are taking any instructions on how to do the work, using equipment/tools from somebody else, and getting instructions from another, then you must be working as employee.

    Asking about "how much am I loosing" is the wrong question. Either you work as an employee or a contractor, as per IRS guidelines, not what somebody here thinks.

    From what you have said here, it sounds like you are an employee and this relationship is subject to scrutiny and penalties (which are severe). Either insist you work as an employee, or find another place of employment.

    This is an age-old question, but the answer is always the same. The subject has been discussed over and over on LS.

    There are many, many threads decrying other LCOs who don't play by the rules. Yet, I read many posts in this thread giving suggestions to the OP on how to circumvent the rules. Do we want competitors who play by the rules, or those who choose to circumvent the rules?
     
    Last edited: Mar 19, 2013
  5. Snyder's Lawn Inc

    Snyder's Lawn Inc LawnSite Platinum Member
    Posts: 4,541

    I have a 1099 Sub working for me He told me what he turns in is less then half what I pay him. He shows he only makes $6.00 per hour and rest for Insurance Tools equipment His tax guy set him up doing this way.
    He told first time being 1099 sub. He turned it all in and he had to pay a lot in at end of the year
     
  6. Roger

    Roger LawnSite Fanatic
    Posts: 5,917

    Oh, wow! Actually, double wow!
     
  7. JCLawn and more

    JCLawn and more LawnSite Fanatic
    from MI
    Posts: 5,206

    Their is a lot of gray area here and its not all black and white like everyone thinks. Here is what the IRS says....

    Independent Contractor Defined
    People such as doctors, dentists, veterinarians, lawyers, accountants, contractors, subcontractors, public stenographers, or auctioneers who are in an independent trade, business, or profession in which they offer their services to the general public are generally independent contractors. However, whether these people are independent contractors or employees depends on the facts in each case. The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done. The earnings of a person who is working as an independent contractor are subject to Self-Employment Tax



    So does this mean the one of my customers who tells me directly what to do in each step when I work for him is actually my employer and my employee who does his job with no direction is a sub contractor? According to the common rule it is.
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  8. Snyder's Lawn Inc

    Snyder's Lawn Inc LawnSite Platinum Member
    Posts: 4,541

     
    Last edited: Mar 19, 2013
  9. JCLawn and more

    JCLawn and more LawnSite Fanatic
    from MI
    Posts: 5,206

     
  10. jermana232

    jermana232 LawnSite Member
    Posts: 19

    Thanks for all the replies. Does anyone have an estimate of the difference I'll pay in taxes at $11/hr as a 1099 (without any deductions) vs w2?
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