# Time for another 1099 or employee thread!



## grandview (Oct 9, 2005)

These are always fun.

Lets say your plowing a place.Your doing the plowing but need someone for the sidewalks.Now do you hire an employee or a sub? 

1. you hire someone to shovel and you pay by the hour and all taxes and stuff. Employee?

2.You hire a guy and he provides his own shovel and salt for the job and drives himself there.Sub?

3. You hire a guy,he drives there in his own car ,but he uses your shovel. sub or employee?

4. You hire a guy, brings his own shovel and pays for any salt he uses from your salt pile that is on site.sub or employee?

5.Someone falls on the sidewalk and sues, do they sue you or just the sub?


Just playing around with this and having fun on here.Thumbs Up


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## siteworkplus (Nov 7, 2011)

how aboyt you hire a guy and he brings 5 of his friends and you pay him X $'s per man hour and he uses the shovels you gave him for Xmas and ice melt the PM supplies


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## jb1390 (Sep 23, 2008)

grandview;1615009 said:


> These are always fun.
> 
> Lets say your plowing a place.Your doing the plowing but need someone for the sidewalks.Now do you hire an employee or a sub?
> 
> ...


1. Employee
2. Sub
3. Splitting hairs, sub unless you require the use of your shovel, and tell him how to use it. 
4. Sub
5. They sue everybody right on up the chain, your sub, you, property owner that hired you. Depending on what the sub did/did not do may affect who (if anyone) was negligent.


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## ducaticorse (Oct 16, 2012)

The description of work being done really has nothing to do with whether the person is a "sub" or "employee". It has everything to do with how you pay them for the services they are performing, and what insurances they carry.


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## grandview (Oct 9, 2005)

ducaticorse;1615137 said:


> The description of work being done really has nothing to do with whether the person is a "sub" or "employee". It has everything to do with how you pay them for the services they are performing, and what insurances they carry.


The job description dictates how you will be paid. If you have 2 guys and you tell one your an employee,then you pay him and take all the taxes out for him,plus pay your share. A sub you give him a lump sum. And in a 3rd case if you hire someone they can bill you the cost of the work and in NYS plus tax.


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## ducaticorse (Oct 16, 2012)

grandview;1615186 said:


> The job description dictates how you will be paid. If you have 2 guys and you tell one your an employee,then you pay him and take all the taxes out for him,plus pay your share. A sub you give him a lump sum. And in a 3rd case if you hire someone they can bill you the cost of the work and in NYS plus tax.


Maybe that's the way it works in NY, but here in MA, if you pay a "sub" as a "sub", he'd better have his own liability and WC, otherwise those costs fall directly onto your shoulders at the end of the year audit, not to mention a "sub" get's 1099, and "employee" doesn't. Also, if your employees are full time here in MA (anything over 36 hours a week) you have to provide health care along with the standard WC insurance. There is so much MORE to this than just 'how you pay the guy".... Employee misclassification is a road you do not want to travel down with the state and fed. I realize this is a lighthearted conversation, but you don't want to be misleading anyone either.....


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## grandview (Oct 9, 2005)

ducaticorse;1615232 said:


> Maybe that's the way it works in NY, but here in MA, if you pay a "sub" as a "sub", he'd better have his own liability and WC, otherwise those costs fall directly onto your shoulders at the end of the year audit, not to mention a "sub" get's 1099, and "employee" doesn't. Also, if your employees are full time here in MA (anything over 36 hours a week) you have to provide health care along with the standard WC insurance. There is so much MORE to this than just 'how you pay the guy".... Employee misclassification is a road you do not want to travel down with the state and fed. I realize this is a lighthearted conversation, but you don't want to be misleading anyone either.....


And yet on here and LS guys try and push an employee into thinking they are a sub and only want to get them a 1099.


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## ducaticorse (Oct 16, 2012)

grandview;1615234 said:


> And yet on here and LS guys try and push an employee into thinking they are a sub and only want to get them a 1099.


Well, that is BS, and about as unprofessional as one can get. Employers do this often, especially unscrupulous fly by nighters and mom and pops. Usually it's under the guise of a "cash gig" yet they ask for a ssn # for "informational purposes only". Then at the end of the year, you get a 1099 in the mail claiming all your "cash" wages. This is an issue for the state AG's office in regard to punishment to contractor for purposefully committing employee misclassification, but in the mean time until it gets worked out, the employee is on the hook for the taxes to the state and fed. And even AFTER it gets worked out, he or she is still on the hook for a portion of the taxes....

Slippery slope indeed...


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## grandview (Oct 9, 2005)

In my landscaping side if I need "professional: work done.Yes I "sub" it out. But they send me a bill with sub total and sales tax. This way done and out of my hands and fully deductible


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## ducaticorse (Oct 16, 2012)

grandview;1615250 said:


> In my landscaping side if I need "professional: work done.Yes I "sub" it out. But they send me a bill with sub total and sales tax. This way done and out of my hands and fully deductible


As long as you have a receipt that actually tracks back to a biz, then you're all good, as long as your "sub" is fully insured or your ins co doesn't ask for proof of insurance of whomever it was you hired to work at your job site. A-hole biz owners who try and save a dime by misclassifying employees are just as bad as the guys cutting throats on bids, carrying no insurance, and using stolen equipment. They are literally stepping on the backs of the very help that allowed them to achieve in order to make a few extra bucks.


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## Drakeslayer (Feb 11, 2011)

grandview;1615250 said:


> In my landscaping side if I need "professional: work done.Yes I "sub" it out. But they send me a bill with sub total and sales tax. This way done and out of my hands and fully deductible


Do you normally do unprofessional work? :laughing:


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## grandview (Oct 9, 2005)

Drakeslayer;1615399 said:


> Do you normally do unprofessional work? :laughing:


Well I am a hack. Mostly when i have someone that needs sprinkler shut off or starts,i don't do that. I call a company and they do the work and bill me. I then bill my customer,with a little extra for me.Thumbs Up


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## framer1901 (Dec 18, 2005)

I pay a sub that is a true sub but he doesn't carry insurance anymore - I reduced his wages to account for what my insurance (WC and Liability) charge me when I pay him. Yes I am taking on the liability of him, I know it and understand it.

Isn't there a work around sort of to the employee thing, something like you can 1099 someone for the first 600 they make before putting them on payroll? We don't do that but I think I've heard of it - almost like having a temp, if they work out, you shift them over to payroll, if they don't, you don't incure all the cost of adding to payroll hassles.. I know for sure you don't have to 1099 if wages are under 600 (they count it on our insurance audits though), but I thought I heard something else about this tryout period.

I hired a sub this year to take care of one account for us - I get his insurance info and yep he's got liability but he has a WC waiver (in MI you get this direct from the state - you have to attest to being a business with no employees), to close to season begining and too much other stuff going on but now after the fact, we're going to do a bit of background checking to see what the real deal is. Maybe he just manages all the plowing he does, but I highly doubt he's riding around cutting grass by himself, which is BS.

I agree 100%, you can't compete with people skirting the tax laws, unfortunately they are everywhere. We switched to payroll years ago, but about a year later than we should have - when you do get caught and they bang you with that matching withholding amount you should have been paying along with the penalty, you are screwed.


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## grandview (Oct 9, 2005)

I think it's called casual labor.


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## ducaticorse (Oct 16, 2012)

framer1901;1615959 said:


> I pay a sub that is a true sub but he doesn't carry insurance anymore - I reduced his wages to account for what my insurance (WC and Liability) charge me when I pay him. Yes I am taking on the liability of him, I know it and understand it.
> 
> Isn't there a work around sort of to the employee thing, something like you can 1099 someone for the first 600 they make before putting them on payroll? We don't do that but I think I've heard of it - almost like having a temp, if they work out, you shift them over to payroll, if they don't, you don't incure all the cost of adding to payroll hassles.. I know for sure you don't have to 1099 if wages are under 600 (they count it on our insurance audits though), but I thought I heard something else about this tryout period.
> 
> ...


You dont have to 1099 at $600 or under, but by federal law, the individual earning the $600 must report it.

Your sub that is exempt from carrying WC as an officer of the company is more than likely legit, although it means squat to your own WC provider, and they will whack you for the additional coverage for the WC uninsured sub at your end of the year audit.


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## thelettuceman (Nov 23, 2010)

G/V: Just speaking for myself and no one else .... If I hire someone, I make sure they have a Federal ID number and not an SS#. This way the payment is made out to a company and I do not get involved with 1099 BS. Always get a certificate of insurance from the company you sub out to. You would be well advised not to hire my company. We are a certified "Fly BY Night" operation.

As far as liability : Regardless of what your contract or agreement is, the person doing the sueing is going to sue everyone involved


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## ducaticorse (Oct 16, 2012)

thelettuceman;1616191 said:


> G/V: Just speaking for myself and no one else .... If I hire someone, I make sure they have a Federal ID number and not an SS#. This way the payment is made out to a company and I do not get involved with 1099 BS. Always get a certificate of insurance from the company you sub out to. You would be well advised not to hire my company. We are a certified "Fly BY Night" operation.
> 
> As far as liability : Regardless of what your contract or agreement is, the person doing the sueing is going to sue everyone involved


You can own and operate a business under a SSN, you are not required to have an FTEIN under a business organized via SP or unless you have employees. You may however run into trouble getting WC coverage without a FTEIN. Whether or not you are paying a company or an individual, you are supposed to be doing a 1099 if they are working on a jobsite that you are responsible for and that payment exceeds a total of $600 in during a fiscal year. I do know that it is not enforced to the "t" but that is how it's supposed to be done.

Curious as to why you call yourself a "certified fly by night operation". That's not something I would be bragging about....


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## thelettuceman (Nov 23, 2010)

ducaticorse;1616329 said:


> You can own and operate a business under a SSN, you are not required to have an FTEIN under a business organized via SP or unless you have employees. You may however run into trouble getting WC coverage without a FTEIN. Whether or not you are paying a company or an individual, you are supposed to be doing a 1099 if they are working on a jobsite that you are responsible for and that payment exceeds a total of $600 in during a fiscal year. I do know that it is not enforced to the "t" but that is how it's supposed to be done.
> 
> Curious as to why you call yourself a "certified fly by night operation". That's not something I would be bragging about....


You are correct about operating a business with a SS#. I would stay away from that. If I make a check out to a business with a FED ID#, I do not get involved with 1099BS.

About that FLY BY Night operation .... just wondering if anyone was reading and paying attention to my post !!!!


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## scott3430 (Dec 28, 2010)

There is no need to 1099 a sub if they make under $600. - in a three month stretch. And the sub does not need to claim earnings of less then 600.


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## framer1901 (Dec 18, 2005)

A guy could have a Fed ID# and you still have to 1099 them - to 1099 or not is based on how the business is structered not SS# verses Fed ID#.

Corporations like a S - Corp do not need to be 1099'd

Sole Proprietor, LLC get 1099'd

A sole proprieter can operate under a Fed ID#.

To 1099 or not is sort of wishy washy, it's best just to file the things instead of getting caught by some auditor years down the road. They are simple to print out.


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## thelettuceman (Nov 23, 2010)

framer: All your info is correct. To me, it is better to pay someone with a fed id # vs. ss#. This way the IRS cannot claim that the SS# guy should have been classified as an employee.


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