Are you a partner or an employee?

 

If you are not a part owner then he must W-2 you and confiscate money from you each week because you're just a peasant now and cannot be trusted with your full pay---the good news is he is on the hook for 50% of your SS Tax.

Here's a tip you'll get nowhere else, this guy just screwed you by not paying you as an employee, so go get your master license and do it yourself.

Good luck...:thumbsup:

 

If the owner controls and supervises your duties, he cannot declare you an independent contractor and 1099 you. You also can't do electrical work as an independent contractor without your license. If he doesn't fix this, you either need to take the EC test or you need to take your tools down the road to somebody else.

 

First of all, how is the corporation setup?
Are you and officer?
How is your workmans comp setup?
Your answer is in those three questions.

 

Years ago I worked for a service company and got a w2 and a 1099 and the guy got away with it.I even called the IRS and they said I was S.O.L.
:thumbdown::confused1::confused1:

 

Was the 1099 for a bonus?

 

You can start here.

 

Here's how it went: I was supposed to be a business partner, but after a few months no papers were signed although I was doing all the sales and I was doing the majority of the work. few months then I spoke with sbA and ask them how to go about becoming a legitimate partner in the business. I brought these findings to the owner in the owner said no I spoke with my accountant and I'm just going to 1099 you. I said no i cannot be 1099 according to what I have read. He said well I can't afford to pay for you as a regular employee. So months went on with us going back and forth about this very subject. at the end of the year I received a 1099 form. I just received my Earned Income 1099 form in the mail from for filing my taxes. I don't see how I could be a 1099 subcontractor if I don't hold a journeyman's license a regular license or if I had to go to work every day with him work his hours. Even purchase a second van for me you at some point drive on my own and have a helper. As far as uniforms go I wore the same shirt he wore which was the business shirt, I I obeyed his orders when it came to how much a job was going to cost and how many hours I was allowed to be on that job. Nothing about my employment sounds like 1099.

 

Sounds like a sticky wicket.

If you were an employee, they would have withheld your share of SS, and any federal or state taxes that they would be required to send in on your behalf. All of this would have been out of your check.

The only thing they are getting over on you (as far as taxes) is the business side of SS, which is 7.65% of your gross.

I don't know if you just want to resolve the tax issue or if you are going after the promise of a partner. If you just want to resolve the tax issue, I would tell him that you will take this to the IRS for determination or, he can write you a check for the 7.65% AND not 1099 you for it next year.

Good luck, and please let us know how this winds up.

 

Your so-called partner is trying to screw you. He already screwed you out of partnership, and now he is screwing you out of tax money, workers comp, unemployment insurance, etc.

 

Depending on the local laws and number of employees, he may not be required to have WC or pay UI.

 

My question is why are you still there?

 

I'm not employed with this person any longer I just want to make sure I don't have to pay what would have been withheld from my check if I was a w2 employee. I'll take it up with the IRS. this nut case is going to come knocking on my door

 

You have indeed been screwed. Contact the Florida Business Professional Regulations department (go to www.myflorida.com) and report him. Then contact the state workers comp division (I believe you can also do that from myflorida) and then the county building department.

People like this should not be allowed to operate. Florida has very strict laws regarding contractors and for workers comp. Employees should be treated like employees -- if you don't have control of your working hours, who you work for, etc -- you are an employee and should have the taxes, fica, etc withheld and paid for you. You are definitely not a sub-contractor.

Since you are no longer working for him, stick it to him! (By the way, I was a Florida Certified Electrical Contractor for 25 years -- I knew and obeyed those regulations and have no sympathy for anyone purporting to be an honest contractor abusing employees in this manner when they get prosecuted.) "Contractors" who get away with this make it hard for honest contractors to compete for work.

 

Okay but he knows where I live, should I report him to the irs now then the state or vice versa. I wonder how fast they will contact him.

 

I'm not employed with this person any longer I just want to make sure I don't have to pay what would have been withheld from my check if I was a w2 employee. I'll take it up with the IRS. this nut case is going to come knocking on my door

All the while you were working for him, how did you get paid and not know he wasn't withholding taxes, social security, etc?

 

I asked this before in a rhetorical way, but now I'm asking it outright.

Are you seeking revenge or do you just want to not be paying the company side of the SS and Medicare taxes (the 7.65%)?

 

so let's break this down:

the way I read the OP, what actually happened was that you were receiving either cash or a check with no taxes taken out, and after many months you finally realized that you would have to pay tax on your income. tough luck, charlie, that's how it goes. You make money, you pay taxes. Now you feel like you are being screwed because ?? I don't get this whole post. If you are really that business unsavvy, it's hard to believe that you "helped start the business". nobody is going to help you. not the IRS, the CIA, the marines, the better business bureau, Obamacare, or anyone else. Take it as a learning lesson, pay your taxes, and move on. sorry for the boot in the butt, but you deserve it.

 

I agree, but I don't think he should be responsible for the company side of the SS & Medicare taxes.

 

Wild leg, I worked for some time while we were discussing whether or not we were going to be making me a 1099 or w2 employee. It wasn't until about 9 months in that I discovered his plan to make me 1099 no taxes were being taking out correct. Why the insult? My business savviness had everything to do with how well I dealt with customers and how well I knew how much things cost it and what the labor rate should be for a job excetera. I'm not looking for revenge what I am looking for is for him to do what he was supposed to do you from the very beginning which is paid for his share of the tax brunt seeing as as a business owner he could not decide whether or not he was going to 1099 me or W form me.

 

As far as the insult regarding whether I was able to start a business or not, I will say that this person held a master's license for quite some time without starting a business it was not until I came along that contracts were landed vans were purchased logos were designed t-shirts and uniforms made, labor units established and lastly a discussion about whether somebody should pay taxes or not pay taxes be 1099 or W have a payroll company not have a payroll company what can be deducted what can't be deducted that was all me not the owner. the fact that I overlooked tax problem has nothing to do with business savvy. people hire accountants everyday and bookkeepers everyday to handle that part of a business, thank you.

 

You mentioned how when you joined the company contracts were landed, but apparently you didn't make one explaining your partnership or compensation. I think this what Wildleg's comment was about, that should've been done first.

 

Well you said it pretty well yes absolutely correct, that should have been discussed first. a lot of things should have been discussed but that's not how it happened. we ended up getting more work then we could handle very quickly, I quit our full time job first, moved in with family to lessen my bill load, and started working all he kept his job for a little while. then he quit his job we were in the truck together all the time. we almost never found time to discuss legal things. as much as I would bring it up as much as I would say how important it was, at the end of the day he was the owner I was not a true partner legally and could not make those things happen, regardless of whether I would bring him information from the government, from local business counselors, or my own personal findings through web searching. at the end of the day it was a mistake, but not for me to bear the brunt of. my earnings were significantly less then his since I was not a true partner. Agreed on percentages never came my way, hourly wages were changed all the time, my last few checks were completely wrong, hence why I'm out making somebody else successful now and he has his vans sitting at the shop.

 

The bottom line is, all a while you two were working together, it was unclear to you if you were partners or you were his employee, in some way you were paid, and not with a payroll type check that noted hours, wage, and deductions.

As soon as it was mentioned that he was going to 1099 you, and you knowing that meant you were being treated as a subcontractor, which would be illegal (from a labor and contracting board's point of view) because you did not hold a license (or insurance) and/or your relationship with him was more employer / employee rather than contractor / subcontractor, you should have put the brakes on then and there.

It's a tough lesson to learn the hard way. This happened to a lot of workers here in NY when a lot of contractors looking to attract better employees started paying their employees 1099 until the IRS and licensing agencies came down hard on these illegal arrangements.

Hopefully, you will be able to deduct a lot of your expenses from this debacle and minimize your tax liability.

 

You've all been more than informative. The Next Goal Is Starting My Own biz IN SC.

 

Good luck with that, but why in SC when you are working in FL and apparently have a customer base (at least that's what I understood you to insinuate when you were saying you did all the selling).

 

I've been wanting to leave the state for a while. I enjoy NC and SC. I'd never stay anywhere for clients. They can work with him or any of the other electricians I refer them to.

 

OK, I'm sorry I insulted you, but (now don't be insulted again) you can't be a businessperson and not know that payroll taxes are paid at least quarterly. After 3 months of your tax-free checks or cash, anyone with one toe-nail's worth of business experience knows that you would never (in this life) have gotten anything but a 1099 for those wages.

You did not have your eye on the ball. learn from it, but don't be expecting anyone to pay 1/2 of your taxes retroactively, cause it's not happening. We all (myself at least) have plenty of stories about being screwed over, you just have to move on. I've spent thousands and countless hours negotiating partnerships that never happened (and I'm sure that's a drop in the bucket to many others) . . . it's just the way it is. When you look back at this, you will eventually see how lucky you were to get out this cheap. Business management has a lot to do with avoiding unnecessary expenses, financial accidents, "unforeseen" charges, and the like. Get better as you go, and look ahead to see the potholes that await you so you can drive around them. good luck.

 

You have two choices,
One. Throw the 1099 in the trash they can't compare them to the issuer unless it's a specific audit of that very small company. Not much chance at all of that..
Two. Go to your accountant and have them deduct what ever you need to zero you out.

Don't tell us what you finally do.

 

I thought the IRS gets the 1099 too? I may be wrong, never sent any out myself. If so, throwing it in the trash won't help.

 

If state law says you are an employee, then as far as I know, you will be considered an employee by the IRS.

In that case your employer is required to give you a W-2 form and is liable for your withholding and all the taxes that employers are subject to. As a victim of fraud, I do not believe you are liable. You may need a CPA or a tax lawyer to explain this to the IRS, but you can take some comfort in the fact that your employer will probably be charged with tax evasion.

 

This is extremely unrealistic.

Nothing will happen to his employer. The OP got screwed and will learn a good lesson.