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Discussion in 'Business Operations' started by jermana232, Mar 19, 2013.
Its look a few posts up. Its been answered twice. 13.3 percent more.
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Your employer is playing in a game that years ago you were able to get away with. It was very common. hats not the case anymore. 1099's are for businesses. There are some jobs that you can legally be a 1099 independent contractor but this isn't one of them. He is more at risk than you. Not only does the govt do audits, the insurance companies do as well. I learned this the hard way and wrote about it years ago on here. I had a cpa and no idea i was doing anything wrong. Until i got an insurance audit and a bill for $25,000. Then a state audit and a bill for back taxes that i am still paying now, years after i closed the business. Yes. Some still get away with it....for now...but it wont last forever.
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First of all, take the time to go back and re-read Roger's post above. It is spot on. This is not some sort of game or joke. Your state will be after your "employer" for unemployment taxes and the IRS takes the misclassification of employees very seriously.
From everything you've described, you are not a subcontractor. It is as simple as that. Again, follow Roger's advice and find a new job. It isn't that difficult. If you are skilled as a mowing operator, I'm sure you can find another job as a W-2 employee for a legit lawn care operator for $11/hr.
Now, if you insist on continuing at your own risk, you will pay the entire portion of the Social Security and Medicare Taxes. That equals 15.3% (some people are saying 13.3%, but that is incorrect. The law reverted back to 15.3% in January of 2013.
So, assuming you make $11/hr and work 1500 hours this year as a contractor, here is what you'll be paying:
As a "contractor" = $16,500 x .153 = $2,524 in payroll taxes.
As an employee = $16,500 x .0765 = $1,262 in payroll taxes.
So you are losing out on $1,262 in extra tax owed b/c your "boss" is not playing by the rules.
Also, this does not take into account federal and state income taxes.
There are some deductions you would be entitled to, but they won't come close to making up the $1,262.
Again, find another job. It is in your best interest.
Here's a tip, coming from someone who has worked a LOT of jobs in the landscape and construction industries for both honest and shady bosses: the boos who's willing to play games with the IRS and the labor board is the one most likely to play games with paying you what you're owed for the hours you work.
I don't know about your state, but in NC, as a employee, you can plan on paying out 28% anually of all the money you make for federal and state tax's.