Help with taxes

If you do NOT have a contract, then you are a legal employee and they have to pay taxes.

 

Your 1099? An independent contractor?

 

Lots of confusion on this one and a great topic for new drivers and even those looking for opportunities.
If you are a direct employee, the company MUST take take taxes out of your paycheck.
If you are an indpentent contractor (1099 employee) they will not take taxes out and the taxes are all your responsibility to pay.
This is the employment version of bait and switch. Why do companies do this? Well, it saves them money and limits their liability.
How you ask? Well they don’t have to pay any unemployment insurance, health Insurance, 401K, workers comp, and the list goes on and on.
As a 1099 employee you are responsible for everything.....no unemployment benefits should the market change, the company can terminate you today with no support system for you at all. Get hurt on the job? Tough luck.
Any company offering a 1099 position is basically telling you that as a worker you are not valued.

 

Early in my career I did one job like this. The first year I just put every third pay cheque into a separate account. Then at tax time I paid my taxes and used the left over money for a Caribbean cruise.
The second year I did quarterly instalments now that I knew what my numbers were.

 

When you left you should have contacted the irs and they would make company pay their share, you could have had a better vacation.

 

This is not true.
Some 1099 positions pay very well. Some don't. No different than employee compensation. Some good, some not so good.

 

Pay rate and being considered a valuable employee are two different things.
Everyone pays well when things are good. A 1099 employee is expendable when things are not good.

 

First I am NOT an attorney. I am also not an expert by any means on California's labor laws. Maybe @REO6205 can chime in on how California's AB-5 may affect the OP. Years ago when I was doing repos I was being paid as a contractor. This was because of the nature of the work. Just know as a contractor you are responsible for paying Federal and State Taxes PLUS any possible local levy. You are also responsible for paying FICA as well. Depending on the state you might be forced to have some kinds of insurance too.

Personally, I would only do this type of work on a limited basis!

 

H&R Block does taxes for private entities as well as corporate. Go in and talk to the person that prepares your taxes. You can have them do alot or very little. It is all up to you.