Am I an independent contractor ? 1099 ?

Please download the IRS PDF, Publication 15 (2011) and read the top of the second column on page 19!

I gave you all the information in my previous post but had to cite the source in an edit because I forgot.

I don't disagree that the hiring of a driver is an employee. I just don't agree with the policing of others affairs. I won't get in trouble for their transgressions, so they don't concern me. I only care if the relationship offers potential for me.

 

Why would I want to down load this publication 15. I already have it.

But, like I said, I do not worry about 2011 while I am STILL doing 2010 returns.

I will be doing the continued education and 2011 tax studies over thanksgiving like always.

 

With all due respect that is what the rates are as of now for the Tax Year 2011 and that is what I correctly spoke of. What makes you think that something called the 2010 Tax Relief Act will change in the present economy? You called me on something I had researched in the past couple of months and could show in writing from the IRS website.

You use software and I read. I learn a lot more from reading. You are the expert and I have conceded this. I am a has been and a wanna be and you are an expert. You are an enrolled agent. Why damage your credibility by downplaying facts?

I have also said most of these arrangements are illegal but I don’t feel like we need to police them. We have big brother breathing down our necks all the time. Why do we need others who aren’t affected by these arraignments trying to police them too? This is a sad part of our society that thinks it is their job to make sure everyone does what they should. I worry about me and let others do their own worrying.

If you work in one of these arraignments and make enough to pay your taxes and still have a good wage and the benefits you want, why worry about it. The company makes their profit, the worker gets his income and the government gets their taxes. As momma always asked, “If they tell you to jump off a cliff, would you do that?”

 

I have not damaged my credibility.

I have not questioned whether they were the 2011 rates.

I USED TO keep up on the rules and these RATES from things like the 2010 tax act.

How would you like to spend a very long time reading all of this stuff, making plans for your clients and spending additional time on this.

Then find that in 4 months they make changes to the act that gets rid of some of the key planning you made.

It is just a matter of time and issues.

If it will make you happy, I will spend this weekend reading it all while I am still working on 3 large tax returns for last year and 2 for prior years.

I am just not concerned about it.





But, this is why we need to regulate business. They will do whatever they can to skirt laws for dollars.

The big carriers are examples of this.

As far as the employer deal, if you do not feel the need for policing, fine.

 

As a Tax Preparer I see how this approach works.

As a businessperson who needs to make projections, I see it as a big disadvantage since we are 67% through the year that this information effects.

I believe the reason for projections is so you can change them when the situation changes and still stay on top of your business.

 

Tax projections and planning are separate issues.

I make projections based on the tax paid for the prior year which keeps clients out of tax penalty issues.


Since I am using a higher tax for SS it gives me a buffer. I make quick looks for projections based on this when I prepare them for clients.

Now, a review of this thread did not show whether we were discussing 2010, or 2011.

Apples and oranges when you are only talking about 2% and then 1/2 is subject to a deduction on the form 1040.

Not a materal concern in my opinion, but if you want to be upset go for it.

 

Roadmedic spelled it out. The tax is the tax, regardless of how it's shell gamed between an employer "contribution" and employee withholding. There's nothing stopping you from purchasing a similar insurance policy as your employer might get with worker's comp (usually called occupational hazard or the like). Either way, it gets paid. Either from hidden income you never will see on your pay stub, or by writing your own personal check.

In your example, the w-2 employee is actually earning $43,060. That's the number that will hit the boss's "payroll liability" account and the number he puts into his cost of doing business. The same thing applies to w/c, insurance, uniform service, or whatever other "benefit" you think you're getting for free. It's called a fully loaded cost. In a perfect world, that is the lower rate that an i/c will shoot for when negotiating, assuming he already knows what the w-2 rate is for a comparable position.

But that's not all. Let's go back to your original case where both the w-2 and i/c are offered the same gross wage of $40k. So at first glance, the i/c gets stuck with an additional $3,060? That sucks. Who would take a deal like that? Maybe someone that has a bad tax accountant working for him. A true i/c with the right CPA backing him up will make that $3,060 vanish (and then some) with qualified expenses that a w-2 employee cannot take.

The intent of the unnecessarily complex tax code we have in the USA is to weasel as much money out of the pockets of hard working men and women as possible without them noticing it. There ain't no free lunch. Our government knows that the majority of taxpayers never look at the "TAX:" line (line 44 on the 2010 1040). In fact the total tax line (line 60) doesn't even have a caption on my copy! That's no accident.

Most people scan on down to the REFUND or AMOUNT YOU OWE (big, bold letters, lines 74a and 76) and think they hit the lottery if they get a refund. By God I know what's on my line 60 every year, and remember that number each and every time I go to vote. Incidentally, that number would have been double had my wife and I been exclusively on w-2 wages.

 

Cost is the main prohibitive factor for an individual purchasing workmens compensation or occupational coverage.

One person coverage is much higher than the cost per employee to a company with several employees.

In addition, the insurance industry is not set up to recognize the individual for these policies.

 

A special tax break for the employee until the end of this year.