Tax questions for employee

Discussion in 'Starting a Lawn Care Business' started by wilkins45, Apr 14, 2006.

  1. wilkins45

    wilkins45 LawnSite Member
    Posts: 3

    I have to hire an employee or two. I want to keep costs to a minimum and do it legally.

    I have heard there is a way to keep from having to deduct taxes, etc. for an employee and simply pay them, similar to that of a sub contractor. However, they will be using my equipment and working for me. At the end of the year they are given a 1099 form with their earnings? Do I have to pay for insurance covering the employees? Workman's comp?

    I'd like to know how this is done to limit my liabilities and record keeping headaches.

    Any help is greatly aprecaited.

    I live in Indiana.

    Thanks

    Jay Wilkins
    jay.wilkins@ontariosystems.com
     
  2. JoeFireman

    JoeFireman LawnSite Member
    Posts: 12

    I dont believe thats true. I believe if they are using your equiptment on you accounts they are your employee. However if you find out different PLEASE let me know. signed Tired of doing it all by myself.
     
  3. 6'7 330

    6'7 330 LawnSite Bronze Member
    Posts: 1,822

    NOnot legally


    You don't have to take out full time medical, but worker's comp is a must,your workers get hurt your ass is in a ringer.You also will need to set up an account for unemployment,with your state department of employment security.I know it all seems scary, but it is part of doing legal business.
     
  4. LushGreenLawn

    LushGreenLawn LawnSite Silver Member
    Posts: 2,121

    Mabye look into a temp agency? I may be wrong but I think the temp agency pays workmans comp, and you are paying the temp agency for their service.
     
  5. Fvstringpicker

    Fvstringpicker LawnSite Fanatic
    Posts: 7,603

    As a ex-revenue agent, the advice given already is sufficient. A good rule of thumb is that if big business ain't already figured it out, you ain't goin be able to do it either.
     
  6. MarcSmith

    MarcSmith LawnSite Fanatic
    Posts: 7,157

    rather thay paying a temp agency, you could use a copmany like Paychex to handle your payroll and they can also set you up with workers comp as well. (which is based in part on your line of work and you employee pay rate) I did use them and was pleased. Paychex were delivered every two weeks by currier or fedex on wed or thursday. all i had to do was fax or email over weekly hourly reports. They also prepared all needed tax documents both quaterly and annually. Big stress relivever right there. You still needed to file you income tax stuff, but they sent out the W2 adn what not....You may not initially need WC, but many commerical properties recquire you to have it to bid on the property.

    I had WC and had to use it. Glad I had it, glad it worked...
     
  7. The landscaper

    The landscaper LawnSite Senior Member
    Posts: 845

    I heard the same thing about the temp agency covering some of those costs. I have never looked into it tho.
     
  8. Landscape25

    Landscape25 LawnSite Member
    from Florida
    Posts: 199

    I think generally the temp agencies cover everything. The one I will be dealing with if necessary does.
     
  9. Dunn's

    Dunn's LawnSite Bronze Member
    Posts: 1,534

    That paying people as a sub and giving them a 1099 is illegal and immoral if you pay your employee lets say 9.00 an hour and you pay them with a 1099 they get taxed at like 47% meaning they where only really making 4 dollars and some change. Oh yeah some cheap bastard did it to me. Guess what dont think he will be doing it to much to many others I wrote to the company that his business was doing work for yea that hurt him a little I contacted the IRS And sent in a form forgot the number but sent it to the calif irs office thats where they handle that kind of crap and lets just say I got even in other ways to and your meesed up for even thinking about ripping off your employees to save a buck!
     

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