1099 Form Question

Run.

The "employer" is not complying with the law.



http://www.irs.gov/Businesses/Small-...tory-Employees

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Statutory Employees

If workers are independent contractors under the common law rules, such workers may nevertheless be treated as employees by statute (statutory employees) for certain employment tax purposes if they fall within any one of the following four categories and meet the three conditions described under Social Security and Medicare taxes, below.

• A driver who distributes beverages (other than milk) or meat, vegetable, fruit, or bakery products; or who picks up and delivers laundry or dry cleaning, if the driver is your agent or is paid on commission.
• A full-time life insurance sales agent whose principal business activity is selling life insurance or annuity contracts, or both, primarily for one life insurance company.
• An individual who works at home on materials or goods that you supply and that must be returned to you or to a person you name, if you also furnish specifications for the work to be done.
• A full-time traveling or city salesperson who works on your behalf and turns in orders to you from wholesalers, retailers, contractors, or operators of hotels, restaurants, or other similar establishments. The goods sold must be merchandise for resale or supplies for use in the buyer’s business operation. The work performed for you must be the salesperson's principal business activity.

Refer to the Salesperson section located in Publication 15-A, Employer's Supplemental Tax Guide (PDF) for additional information.
Social Security and Medicare Taxes

Withhold Social Security and Medicare taxes from the wages of statutory employees if all three of the following conditions apply.

• The service contract states or implies that substantially all the services are to be performed personally by them.
• They do not have a substantial investment in the equipment and property used to perform the services (other than an investment in transportation facilities).
• The services are performed on a continuing basis for the same payer.

Page Last Reviewed or Updated: 23-Jan-2013



http://www.irs.gov/Businesses/Small-...or-Employee%3F

This one is quite lengthy and more in depth.

Here is a small part of it.

In determining whether the person providing service is an employee or an independent contractor, all information that provides evidence of the degree of control and independence must be considered. Common Law Rules

Facts that provide evidence of the degree of control and independence fall into three categories:

1. Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
2. Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
3. Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?

Related Topics

• Independent Contractor (Self-Employed) or Employee?

 

Like Roadmedic says run. It is an industry standard if you will that some employers want to pay on a 1099 and then you have to pay your taxes but it is not really legal to do this and more companies are getting into hot water with the IRS over this.

 

Find another job.

 

Also there its no money going into your social security, no workmans comp, stay away!!!!!

 

Wait!!! you can run as a contractor. If so you will have to take care of your tax info. It's a lot more work. Ask questions. I did 1099 as I was self employed and work for other companies. Bottom line, understand your options and what you can do.

 

Just because somebody did it, does NOT mean it was legal.

 

There is nothing wrong with working under a 1099 as long as you are responsible enough to pay your own taxes. Where some get into trouble is that they don't put money back to pay their taxes. Some who work on a 1099 pay quarterly while others pay at the end of the year. Frankly, I would not worry too much about paying social security. The way the government is spending money, there may not be any money to pay retiree's anyway. You could set up your own retirement account and not worry about the social security. You can get an occupational accident policy instead of workers comp and pay about $140/month.

 

I've done it, you just need to keep track of eveything. it is good to pay your SS taxes cause you may need them later. I find it better to let them do it and take my weekly pay.