Blacknarwhal
Let's Go Brandon!
....interestingly, today I got approached by my current clients--who I have been a 1099 contractor for for the last year and half--to switch to part-time employee status. I wonder how much this has to do with that.
ECON Are you a 1099 Contractor? Read this update from the IRS
- Thread starter 20Gauge
- Start date
kyrsyan
Has No Life - Lives on TB
I'm betting a lot. A lot of companies were stretching those guidelines for all they could.
kyrsyan
Has No Life - Lives on TB
They did that a few years back. It's going to be interesting to see how it all plays out in the work from home environment.
Oh you said another magic word “salaried” most workers are “hourly” there IS a difference and that difference is abused as well.
20Gauge
TB Fanatic
Very correct
20Gauge
TB Fanatic
Would not surprise me
20Gauge
TB Fanatic
Millions upon millions
Hypothetical example but real world scenario.
Wondering if it had any effect on these folks?
IT Consulting firm hires “consultants” as employees then basically provides “staffing” to another firm using these employees. I think I have seen the term “Corp to Corp” used to describe this scenario.
The firm where the employees of the IT Consulting firm are actually working every day provides the computer these people use. Gives them direction on how and what to do.
I guess since they are NOT 1099 and ARE employees of somebody none of this likely applies.
Wondering if it had any effect on these folks?
IT Consulting firm hires “consultants” as employees then basically provides “staffing” to another firm using these employees. I think I have seen the term “Corp to Corp” used to describe this scenario.
The firm where the employees of the IT Consulting firm are actually working every day provides the computer these people use. Gives them direction on how and what to do.
I guess since they are NOT 1099 and ARE employees of somebody none of this likely applies.
Babs
Veteran Member
I worked for a company that did "employee leasing" years ago. It was a new concept at that time. These employees were primarily factory workers. The leasing company I worked for, paid all the employer obligations and benefits, then billed the company an hourly fee for each employee.
Interesting question, Kris.
Blacknarwhal
Let's Go Brandon!
Salaried: You work however long we want you to work for the same pay.
Hourly: Don't forget to punch out before your mandatory unpaid overtime.
1099: Thanks for paying half the tax bill for us!
That would be the WHOLE tax bill, wouldn’t it?
Blacknarwhal
Let's Go Brandon!
I don't think so. In an employee / employer, the employee pays half and the employer pays the other. In the 1099, the employee pays the whole thing. The employer just pays their own.
Granny Franny
Senior Member
The OP has a link to an IRS publication that helps decide the question. There is also a form that can be submitted to the IRS (SS-8) to determine whether you are an employee or contractor. https://www.irs.gov/pub/irs-pdf/p1779.pdf
I think like a lot of folks here that this is more for the companies who hire the gig workers, but it could impact a lot of small businesses in the process.
From the brochure:
The courts have considered many facts in deciding whether a worker is an independent contractor or an employee. These relevant facts fall into three main categories: behavioral control; financial control; and relationship of the parties. In each case, it is very important to consider all the facts – no single fact provides the answer. Carefully review the following definitions
Behavioral Control
These facts show whether there is a right to direct or control how the worker does the work. A worker is an employee when the business has the right to direct and control the worker. The business does not have to actually direct or control the way the work is done – as long as the employer has the right to direct and control the work. For example:
Instructions – if you receive extensive instructions on how work is to be done, this suggests that you are an employee. Instructions can cover a wide range of topics, for example:
• how, when, or where to do the work
• what tools or equipment to use
• what assistants to hire to help with the work
• where to purchase supplies and services
If you receive less extensive instructions about what should be done, but not how it should be done, you may be an independent contractor. For instance, instructions about time and place may be less important than directions on how the work is performed.
Training – if the business provides you with training about required procedures and methods, this indicates that the business wants the work done in a certain way, and this suggests that you may be an employee.
Financial Control These facts show whether there is a right to direct or control the business part of the work.
For example: Significant Investment – if you have a significant investment in your work, you may be an independent contractor. While there is no precise dollar test, the investment must have substance.
However, a significant investment is not necessary to be an independent contractor.
Expenses – if you are not reimbursed for some or all business expenses, then you may be an independent contractor, especially if your unreimbursed business expenses are high.
Opportunity for Profit or Loss – if you can realize a profit or incur a loss, this suggests that you are in business for yourself and that you may be an independent contractor.
Relationship of the Parties These are facts that illustrate how the business and the worker perceive their relationship. For example: Employee Benefits – if you receive benefits, such as insurance, pension, or paid leave, this is an indication that you may be an employee. If you do not receive benefits, however, you could be either an employee or an independent contractor.
Written Contracts – a written contract may show what both you and the business intend. This may be very significant if it is difficult, if not impossible, to determine status based on other facts.
Griz3752
Retired, practising Curmudgeon
Not verbalised to mu knowledge but I can JB getting behind such a strategy: anything to impair Liberties for anyone with a view to tighter controls over everyone.
Bridey Rose
Veteran Member
Just last week I got a tax bill for not paying quarterly withholding on my 1099 income last year and early this year. That never happened before.
Either I'm earning more self-employment income, or the IRS is cracking down.
It was only for a little less than $150, but it resulted in a lot of cursing on my part!
Either I'm earning more self-employment income, or the IRS is cracking down.
It was only for a little less than $150, but it resulted in a lot of cursing on my part!
ShyGirl
Veteran Member
IRS just sent us a bill for more taxes for last year. It's kinda confusing and I am trying to figure it out but I think it is for more money for Self Employment taxes for the Unemployment we got from the state last year. The state kept sending us emails saying we could collect unemployment under the special covid laws and we weren't making much at all because of covid on real estate so we took the unemployment money following all the rules and having taxes withheld on the money.
Now they say we owe more. The only way I can figure it is they want SE taxes on the unemployment money which adds $1500 to our taxes and since I didn't put it on the SE form and pay the tax in April it is now also adding interest to the bill.
This year is even worse because we earned nothing so far from real estate and also did not get any unemployment. I have no idea how to do the taxes for this year because we only got SS and pension money but also paid all the fees for being a real estate agent and made no money from selling houses.
Now they say we owe more. The only way I can figure it is they want SE taxes on the unemployment money which adds $1500 to our taxes and since I didn't put it on the SE form and pay the tax in April it is now also adding interest to the bill.
This year is even worse because we earned nothing so far from real estate and also did not get any unemployment. I have no idea how to do the taxes for this year because we only got SS and pension money but also paid all the fees for being a real estate agent and made no money from selling houses.
How would the "right to direct and control" the worker apply say to an interior design firm that uses hundreds of independent contractors/artisans for various specialty projects: custom drapes, refinishing, custom wall coverings and coatings, flooring specialists, lighting designers, cabinet makers, etc?
One such firm I knew of had thousands of 1099s each year varying in amounts from $600 to $100,000s.
One such firm I knew of had thousands of 1099s each year varying in amounts from $600 to $100,000s.
20Gauge
TB Fanatic
I can not really speak to the state issues, but most likely the IRS ( Federal ) wants their part of the unemployment. It was taxable and partially taxable, depending upon the year
I would suggest getting a professional
20Gauge
TB Fanatic
West
Senior
Wells and taxes/regulations, are deep subjects.
Maybe this will wake up some people's. Sure isn't going to help commerce.
More jobs going out of country that's for sure.
Really our government just needs to tax all receipts as income. Meaning out lawing that greedy tax loop hole of business expenses.
That would help ,
Maybe this will wake up some people's. Sure isn't going to help commerce.
More jobs going out of country that's for sure.
Really our government just needs to tax all receipts as income. Meaning out lawing that greedy tax loop hole of business expenses.
That would help ,
They're working on ways to ultimately tax garage sales, classified ads, flea markets, even selling a boat in your front yard. Probably just a matter of time before the DMV reports to the IRS any private car/boat/trailer sales of $600 or more. The ever improving 'Big Brother' spy technology is on the government's side. The end of cash as a monetary exchange will be the end of freedom for the vast majority of people.
Ever wonder why when you cancel a Marketplace posting on FB they ask if you sold your item, if it sold on FB or somewhere else, and to whom (if sold on FB)?
Ever wonder why when you cancel a Marketplace posting on FB they ask if you sold your item, if it sold on FB or somewhere else, and to whom (if sold on FB)?
20Gauge
TB Fanatic
such sales / reporting is not limited to $600 for taxation. All of it from the first $ is taxable.
They are already going after the items you mentioned. Remember all cash app ( and like items ) are now reporting sales.
Blacknarwhal
Let's Go Brandon!
Meanwhile, I've been playing musical contract chairs with my current client for the last two days. They basically want me to act like an employee, behave like an employee, but keep paying taxes like an independent contractor. I think I may be about to lose a job.
GB Appling
Contributing Member
Sux about your job. I wish companies would just fire the irs and not their contract workers!#abolishtheirstoday
ShyGirl
Veteran Member
I reported and paid federal and state income tax on the unemployment income but there isn't even a line on the SE form (self employment) for unemployment income and I didn't even think it would included in self employment taxes. Also didn't see a place on Schedule C (Profit or Loss from Business) to report unemployment. Of course 1099 workers aren't normally suppose to get unemployment benefits.
They also taxed half of both of our social security payments as income and of course all of my pension payments. So I guess they get taxes from unemployment both ways, as income and as self employment income.
20Gauge
TB Fanatic
IT would have been a 1099 from the state that goes in a different location than schedule c