Who wants to talk to me about working 1099?

[rudeguy]

I took on a temp job as a contractor. I've never done this kind of work, so I don't know how it works.

Do they normally take taxes out? They haven't asked for any information from me other than my name and address.

It's not a big deal since I've already paid in enough to cover state and federal but what about social security?

Does the IRS say I have to put money aside for taxes?

Sorry for the dumb questions, I just have no idea how this works

 

[PenguinPower]

Here

The bigger question I would be asking is, "Are you really an IC?"

 

[Fern]

I took on a temp job as a contractor. I've never done this kind of work, so I don't know how it works.

Do they normally take taxes out? NO They haven't asked for any information from me other than my name and address.

It's not a big deal since I've already paid in enough to cover state and federal but what about social security? You pay Self Employment tax. The rate is approx 15%. See a Schedule SE that attaches to your Form 1040.

Does the IRS say I have to put money aside for taxes? Maybe. Depends on a couple of factors but they generally want you to make quarterly estimated tax payments. See Form 1040-ES

Sorry for the dumb questions, I just have no idea how this works

Answers in bold above.

Fern

 

[W.C. Nimoy]

Here

The bigger question I would be asking is, "Are you really an IC?"

What do you mean by that exactly? When the nature of the work is more like employee-employer, but they use 1099 anyway?

 

[rudeguy]

Here

The bigger question I would be asking is, "Are you really an IC?"

For sure. I was brought on for one project only.

 

[PenguinPower]

What do you mean by that exactly? When the nature of the work is more like employee-employer, but they use 1099 anyway?

I mean this and this.

I've had a few former colleagues get hit hard.

 

[rudeguy]

I mean this and this.

I've had a few former colleagues get hit hard.

Meh.. just another excuse to spend our money by picking on the working man. Big brother can blow me.

 

[W.C. Nimoy]

A different one-

WHat if your employer calls you an IC (during the first 3mo's probation period anyway), but you filled out a w4 with them when you started- that means you're definitely not an IC, in any capacity, right?

Their benefits obviously don't start until the 3mo's are over, but any clue if that also excludes workers comp from the first day? It seems like that would be a state mandated thing (texas), regardless of how long you're there, but obviously wouldn't apply to independent contractors. In this case, nothing is IC about the relationship per the link above. Just curious about workers comp mostly- I injured myself on the very first day. Reported, but ignored.

:hmm:

 

[onza]

They will pay you for straight hours only.

You will be taxed on those earnings.

They will not withhold any taxes, and you will need to withhold your own taxes.

Good luck.

 

[Tweak155]

I did about $30k worth of work last year on 1099. Since it was my first year that I knew I would owe, I just kept the taxes until tax time.

Even with overpaying taxes on my W2 job I still owed the gubment $5500. Was not fun... but I didn't pay it until Apr 14th

 

[rudeguy]

I did about $30k worth of work last year on 1099. Since it was my first year that I knew I would owe, I just kept the taxes until tax time.

Even with overpaying taxes on my W2 job I still owed the gubment $5500. Was not fun... but I didn't pay it until Apr 14th

Wtf tax bracket did you hit?

 

[Fern]

Wtf tax bracket did you hit?

The self employment taxes alone (assuming he did not max out on his W-2 wages) would be $4590.

Fern

 

[Fern]

A different one-

WHat if your employer calls you an IC (during the first 3mo's probation period anyway), but you filled out a w4 with them when you started- that means you're definitely not an IC, in any capacity, right?

Their benefits obviously don't start until the 3mo's are over, but any clue if that also excludes workers comp from the first day? It seems like that would be a state mandated thing (texas), regardless of how long you're there, but obviously wouldn't apply to independent contractors. In this case, nothing is IC about the relationship per the link above. Just curious about workers comp mostly- I injured myself on the very first day. Reported, but ignored.

:hmm:

First, you're either an IC or an employee. Your status is determined under law, not by the whim of the employer etc. If you're performing the same duties it would be incorrect for an employer to change your status from IC to employee merely because some time limit had been met.

Your classification is generally dependent upon your duties and how they are performed (e.g., at home unsupervised or at work place with supervision).

From a quick search it appears that TX generally doesn't require WC. But the question may be can some employees be covered and others not? Or, if the employer provides it can there be a waiting period? I couldn't find an answer to that. You may need to call a TX Dept for info. Try this one:

Deputy Commissioner
Workers’ Compensation Classification and Premium Calculation Division, MC 105-2A
Texas Department of Insurance
P.O. Box 149104
Austin, Texas 78714-9104

Fern

 

[W.C. Nimoy]

That info is greatly appreciated, thank you so much.

It's a city, so I figured they'd be more responsible.

 

[Tweak155]

Wtf tax bracket did you hit?

Pretty low actually, I didn't work the whole year and started a new gig near the end of it.

 

[PenguinPower]

First, you're either an IC or an employee. Your status is determined under law, not by the whim of the employer etc. If you're performing the same duties it would be incorrect for an employer to change your status from IC to employee merely because some time limit had been met.

Your classification is generally dependent upon your duties and how they are performed (e.g., at home unsupervised or at work place with supervision).

From a quick search it appears that TX generally doesn't require WC. But the question may be can some employees be covered and others not? Or, if the employer provides it can there be a waiting period? I couldn't find an answer to that. You may need to call a TX Dept for info. Try this one:

Deputy Commissioner
Workers’ Compensation Classification and Premium Calculation Division, MC 105-2A
Texas Department of Insurance
P.O. Box 149104
Austin, Texas 78714-9104

Fern

Employer's may get to choose - in most cases - whether or not they provide WC coverage, but they have to notify the new hire in writing at the time of hire either way. It starts day 1 if provided.

If the employer does not have coverage, you can go the personal injury route and there is no limit to amount and type of compensation as there would be under WC.

 

[Via]

Just remember to keep track of everything you spend related to the job for deduction purposes.

If you're self-employed I'm pretty sure you can still deduct 100% for what you pay for health insurance.

Keep track of all of the miles you drive for the job, all of the clothes and supplies etc, you buy for the job. If you have to spend any nights out of town you get deductions for that as well.

If you have any previously owned equipment that you've never deducted or used for business purposes you might be able to deduct that as well (your PC and printer if you use it for the job, for instance).

You can probably deduct a cell phone if you use it exclusively for your job.

 

[Tweak155]

Just remember to keep track of everything you spend related to the job for deduction purposes.

If you're self-employed I'm pretty sure you can still deduct 100% for what you pay for health insurance.

Keep track of all of the miles you drive for the job, all of the clothes and supplies etc, you buy for the job. If you have to spend any nights out of town you get deductions for that as well.

If you have any previously owned equipment that you've never deducted or used for business purposes you might be able to deduct that as well (your PC and printer if you use it for the job, for instance).

You can probably deduct a cell phone if you use it exclusively for your job.

It's been a while since I could count the deduction, but IIRC, if you use the phone at least 51% for business you can do a deduction for both the cost of the phone and the monthly bill.

 

[AustinInDallas]

Keep track of all of the miles you drive for the job, all of the clothes and supplies etc, you buy for the job. If you have to spend any nights out of town you get deductions for that as well.

Clothes can only be deducted if they can ONLY be used for the purpose of the job. Basically Uniforms. No suites, pants, shoes, polos(unless they have the logo of the company on them)

 

[Mandres]

Meh.. just another excuse to spend our money by picking on the working man. Big brother can blow me.

Just so everybody is clear, being improperly classified as a IC rather than an employee hurts the worker and benefits the employer, because it shifts the burden of the employers portion of payroll taxes to the worker rather than the company and denies the worker certain protections that are granted to employees.

The reason that these rules are in place is to protect employees against being unfairly classified as contractors.

 

[onza]

Auto:

You have two options,

take mileage deduction (whatever it is these days.. 50 cents?)
or
actual costs (insur / gas / tolls etc).

 

[Via]

Clothes can only be deducted if they can ONLY be used for the purpose of the job. Basically Uniforms. No suites, pants, shoes, polos(unless they have the logo of the company on them)

If course you can't just deduct anything, but musicians (for example) can deduct the cost of performance clothes like tuxedos.