1099 Question.

BamBamm5144

Now, before you make fun of me, I am 99.9 percent sure I have the correct answer and just NEED to make sure. Some of you might know that I am not the actual owner of the company but the "right hand" man. I ran into an old buddy from HS. He wants me to snow plow for him but he said he wants to 1099 me. I told him that if I were to be 1099 I would need to be in actual business for myself already, be licensed and pay all appropriate fees and taxes. Since I am none of the above I would need to be hired on as a regular employee of his correct? He seems to think I am wrong but maybe thats cause he used to try to make me fit into lockers at the old HS

Please let me know guys. Thanks.

NormW

As far as being a 1099... If your both comfortable being a 1099, then it should be Ok. By being a 1099, your saying your operating independantly, and agree to be responsible for taxes, licensing, etc...

If your clearly not working independently, and not paying taxes, insurance, etc... Your buddy could end up being on the hook for the above.

I checked into this, this summer. The people working behind the counter at the IRS, could not give me a straight answer. I walked away with a pile of brochures and pamphlets...

IMO the best I can figure is... "If your both comfortable, being a 1099, then it should be OK". That being said, he would be safer labeling you, as an employee... but, you would have to take a painful cut it pay, to cover the increase in labor burden. There lies the root of the issue.

dakzaag

1099 equal subcontract.
My understanding is you have to have some risk that you might loose money such as getting paid by the job vs the hour.

You only need insurance if you get caught or have a problem... most of us realize that something will happen sooner than later so we get insured and licensed and whatever else we need.

I don't see how you could drive his truck and be under his insurance and not be considered an employee. If you have your own truck and have the insurance etc. than you don't need him, just start plowing for yourself.

He is still trying to minipulate you, just a bigger locker called jail.

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D K & Sons
The maintenance schedule for brick
1. Stand back and say "man that looks nice!"
2. Repeat as often as needed.

SC sawdaddy

If he gives you a 1099, that means that he is claiming you as a write off, You provided a service or product for his business and he paid you for it. Now it is up to you to pay taxes on the profit that you made.

FremontREO

http://www.irs.gov/pub/irs-pdf/fss8.pdf

BKFranks

If you do the 1099 I hope you're prepared to pay the additional taxes. You going to have to pay self employment tax, you're going to have to pay quarterly otherwise you get hit with a fine when you file. Like everyone said, you need insurance since you're an independent contractor. All these costs add up as part of doing business and you should be charging more then if you were just an employee making only wages.

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BamBamm5144

Thanks guys. That is right along the lines of what I thought. Its not operating a truck but actually a skidsteer on a large commericial property.

ARI001

I bet he wants to pay you $20.00 per hour on that 1099 also. He may or may not be right there are a lot of factors used to determine who you can and can not 1099. Check with your accountant he/she should be able to give you the details that pertain to your situation. If it where me I would tell the guy to go f**k himself. He's just trying to avoid paying taxes. He knows if he hires a sub-contractor he will pay them more because they pay taxes and figure for overhead and profit. He knows if he hires somebody he will be responsible for payroll taxes, WC, etc., and assume responsibility for lost profits if production rates fall, equipment breaks down, fuel prices that continue to rise etc. So this a**hole figures he'll just try and screw someone who doesn't know any better. I hate a**holes like that.

macatawacab

the IRS has a list of 20 questions that determine if you are an employee or an independent.

Google that list and work your way thru it.

Anti-wingnut

Whos skid-steer?

BamBamm5144

Its his Skid-steer, all of his stuff. The complex is actually within walking distance if I cut through a yard or two so I am even able to use it for my own driveway.

Everything got worked out today. He said he would 1099 me and I told him it would be much more simple if he would just make me an employee of his which he did without a problem. Turns out he will need my knowledge and skills to help him out when he does certain roofing,siding, window and gutter jobs since he claims he can never find a good crew (which I 100% believe him).

Since this is my first year plowing, 20.00 an hour to sit in a heated skidsteer is the going rate correct? I am assuming it is, at least in this area from what I am seeing others offer.