Your thoughts on 1099's

Discussion in 'Business Operations' started by ChadA, May 11, 2009.

  1. ChadA

    ChadA LawnSite Senior Member
    Posts: 521

    I was thinking of putting my 2 employees on 1099. Anyone else out there do this? Thanks for any info.
     
  2. Littleriver1

    Littleriver1 LawnSite Senior Member
    Posts: 811

    Paying tax sucks. But, it's the Law. To me it's like gambling. I stoped gambling because I wasn't any good at it.
     
  3. ChadA

    ChadA LawnSite Senior Member
    Posts: 521



    Good advise. Thanks.
     
  4. topsites

    topsites LawnSite Fanatic
    Posts: 21,654

    I would recommend, speak to your accountant about this 1099 deal.
     
  5. Smittie

    Smittie LawnSite Member
    Posts: 238

    From my understanding even if you 1099 them you still have to give them a W-2. At least thats how my CPA explained it. I would still check with your CPA though just to be certain.
     
  6. bohiaa

    bohiaa LawnSite Fanatic
    Posts: 5,220

    at the end of the year you have to report to the IRS how much you paid them. you will have to send them a 1099. with the ammount that you paid.

    then it's up to them to report there income to the IRS.

    you report it. and your done............
     
  7. kaferhaus

    kaferhaus LawnSite Bronze Member
    Posts: 1,444

    There's a caveat to doing that.... 1099 is for contract labor. If the only job these guys have are working for you then you're driving down a very slippery slope legal wise. I was told by not only a CPA but my attorney NOT to 1099 anyone that had a "schedule set by you"

    In other words if you're telling a guy to show up at such and such time and work until such and such time even if it's only a few days a week then he's a employee, NOT a subcontractor

    You CANNOT 1099 a employee, period.

    If you then tell the guy times are slow and you don't need him any longer..... he files for unemployment and states you were his "employer" then you have a fight on your hands... he gets pissed, calls the IRS.... they decide you're an "employer" and come after you for all of the back withholding, FICA etc etc. etc.

    Also the guy gets "hurt" on the job..... claims he's an employee (forget any sub-contractor agreement unless the guy meets the "tests" for being one)

    Here in my state you cannot 1099 anyone who you pay more than $600 in any calander year UNLESS he has a business license.

    Use common sense....if the guy is a "employee", you know it, he knows it and if there's a problem you and you alone are going to pay the price and penalites for it and he'll be portrayed as your "victim" (which he was).

    The easy thing to do is to obey the law and pay your damned taxes. Obama needs the money because he's already spent it.
     
  8. wrtenterprises

    wrtenterprises LawnSite Senior Member
    Posts: 310

    Is he using your equipment? Is he driving your trucks? Will he make more than $600.00 in a season? If you answer yes to any of these, he is an employee. Don't be a hack, do it the right way.......
     
  9. bohiaa

    bohiaa LawnSite Fanatic
    Posts: 5,220

    NOT true, anyone can be 1099'ed, it's jsut a simple way of paying an employee, this way he's responsable for paying his taxes.

    your thinking of day labor. Jsut because you 1099 someone does NOT mean he's NOT your employee, and it has NOTHING to do with if he uses your equiptment or not,

    wait untill you get into, a percentage, this is where the money is for both employee and employeer, or shall I say Contractor, by paying a percentage, THEN HE"S truly NOT your employee.

    I have 1099'ed Many times, 6 for last year in fact, and it looks like 10 so far this year. I pay 2.50 per hour more, By 1099 than by the hour.
    simply because it saves me tons of money,
     
  10. ChadA

    ChadA LawnSite Senior Member
    Posts: 521

    I have 1099'ed Many times, 6 for last year in fact, and it looks like 10 so far this year. I pay 2.50 per hour more, By 1099 than by the hour.
    simply because it saves me tons of money,[/QUOTE]


    My wife works at a doctors office and is paid 0n 1099 $700 a week for almost a year now.

    I am waiting to hear back from my cpa.

    Thanks for all the input everyone.
     

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