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Discussion Starter #1
Hoping you guys may give some thoughts opinions...

I'm a 1 man show. I don't even use my electrical business as my main source of income. My dilemma is that I've been paying 1-2 guys cash for helping out when in need. For the last few months I've been slammed and hate the fact that if I don't 1099 them then I have to eat that $ as income. Is this a no brainer? Should it just trickle down? Or should I just eat the tax? I know tax laws can get tricky. I just want to be able to make it worth there time still. My top guy makes 25/hr do I give him a decent raise and then 1099 him?
 

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Discussion Starter #3
My accountant is pretty by the book and would expect me to 1099 anyone who does work for me
 

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While I agree with the above posters, don't forget to consider whether you are even allowed to 1099 them. If you are directing when/where they go to work and their schedule, they are employees and you will be responsible for the business side of their SS contributions plus withholdings and workers comp and unemployment contributions.

Of course, if you don't get caught, you can do whatever you please. It's that getting caught thing.
 
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There are plenty of guys who do the same thing and eat the tax..

Is it right and legal NO...

If one of these workers gets hurt.. they will hang you by your nuts from a tree for not having workman's comp..
 

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Discussion Starter #8
Theone thing that scares me is someone getting hurt. The guys know they're doing "sidework". I understand that friendships can go out the window when someone's ability to work is compromised by an accident. Maybe they can sign a release?? As far as 1099. If I'm considering them subcontractors I don't see the harm. They'd be responsible for there own taxes and income correct?
 

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Theone thing that scares me is someone getting hurt. The guys know they're doing "sidework". I understand that friendships can go out the window when someone's ability to work is compromised by an accident. Maybe they can sign a release?? As far as 1099. If I'm considering them subcontractors I don't see the harm. They'd be responsible for there own taxes and income correct?
Just because you call them subcontractors does not make them subcontractors.
 

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There's four laws/status that the IRS looks at to determine if someone is an emplyee or a subcontract.

If you read them and know them, you might act more like your accountant.

JMO
 

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You need to work this out with them before you 1099 them, they needed to know your intend day one. I KNOW they assume this is tax free cash.
 

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Discussion Starter #13
I would never spring this on them. They're aware that at some point it's coming. And they know they'll have notice
 

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Work comp is a separate issue entirely. For what you get in protection it's very affordable. Talk to your insurance agent and they will help you set it up.
 

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Theone thing that scares me is someone getting hurt. The guys know they're doing "sidework". I understand that friendships can go out the window when someone's ability to work is compromised by an accident. Maybe they can sign a release?? As far as 1099. If I'm considering them subcontractors I don't see the harm. They'd be responsible for there own taxes and income correct?
Signing a release will not have any legal effect. Such agreements are routinely thrown out when it can be shown to be illegal. :blink:

AS for the 1099 status, one thing that can have THAT thrown out is whether or not they licensed themselves? If not, you ain't got a legal leg to stand on.... :whistling2:
 

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I would never spring this on them. They're aware that at some point it's coming. And they know they'll have notice
First, delete this post, user name and never use it again.
Second, it would be improper to 1099 these guys. It will open a huge can of worms for you.
You have to eat it.
You were not paying workmanship comp, unemployment or SS, on these guys. Consider that your income and you are even.

Clean up your act and start the year out right and get them on payroll.
Thank God, Mother Earth or whatever you believe in that no one has gotten hurt and sued you and your clients.

Good luck.
 

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You need to work this out with them before you 1099 them, they needed to know your intend day one. I KNOW they assume this is tax free cash.

Maybe split the two. You eat half, they get 99'd for half, and moving forward, you get them on the books.
 
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