# Employee W2 or 1099?



## Jays Green Daze (Aug 23, 2009)

I was wondering what the pros and cons are to paying employees as a W2 employee or to 1099 them and let them worry about their taxes. With the new year starting I only have 3 employees other than myself in the winter but in the summer I will have closer to 6-8 depending on what new contracts are signed this year. If I 1099 them what recourse do I have in my profits as far as taxes are concerned. I should also mention the company is a Corporation "C" in Michigan.


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## grandview (Oct 9, 2005)

Don't even try it. Employees are w-2 only.


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## Herm Witte (Jan 27, 2009)

Agreed! W-2's, Workers Comp., Liability etc. Do it right. You are in business right? Since you are asking this question I also suggest that at a minimum you set up your business as an LLC.

Herm Witte


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## Jays Green Daze (Aug 23, 2009)

Herm Witte;910111 said:


> Agreed! W-2's, Workers Comp., Liability etc. Do it right. You are in business right? Since you are asking this question I also suggest that at a minimum you set up your business as an LLC.
> 
> Herm Witte


Thanks for the advice. I have the company setup as a corporation and the past couple of years I have W2 employees. I was just wanting your opinions on whether I should continue or change to a 1099 for the 2010 year. I wanted to know what the advantages of staying with a W2 is rather than 1099 is all. Please keep the suggestions coming and thanks again.


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## terrapro (Oct 21, 2006)

The only advantages is you get the fast track to tax fraud.

You said it yourself in the title "*employees*", they get a w-2 period. To be safe with subs they should really have their own equipment and work on their own time BUT in a timely manner. You can't tell a sub what to do but they need to do it to specs if you get my drift.


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## redman6565 (Jul 14, 2008)

w-2 is the only way to go. employees will appreciate it more too, specially if you eventually have to lay them off. 1099=no unemployment.


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## jomama45 (Dec 25, 2008)

Jays, listen to the others. A few states have already cracked down on the legal description of a sub (1099) vs. an actual employee. It will become far less "cloudy" & easy to get away with in the near future on a fedaral level IMO. Plus, it unethical IMO. Not only is it fraudulant as stated above, but it adds additional responsibility to your employees that should really be your responsibility.


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