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7 Answers

Responsibilities of a1099 employee?

Asked by: sventre 327 views YA Discussion

Just interviewed for a job I’m really interested in and they initially offered to pay me under the table (no taxes involved) – now they want to make me a 1099 employee instead, but at the same pay rate offer. Shouldn’t I ask for a higher salary because I would be responsible for paying federal and state taxes if I am 1099-d?

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7 Answers



  1. Erik on Oct 30, 2012 Reply

    you should for that reason, but in addition you do not qualify for unemployment, vacation, health care, and all kinds of other benefits. Normally pay would be higher to compensate for that (since you take the risk yourself). Odds are they can’t legally make you a 1099 “employee” anyway, since you would most likely qualify as a regular employee. The IRS has some information on that.

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  2. Bash Limpbutt's Oozing Cyst© on Oct 30, 2012 Reply

    There’s no such thing as a “1099 employee.” The term is a complete oxymoron.

    Unless you have started your own business, have a number of clients that you provide services for, you personally determine who will do the work and in what manner and on what schedule, then you are an employee and your wages are documented on Form W-2.

    For comparison’s sake, a self-employed individual needs roughly double the income to be in a similar financial position as an employee does, all else being equal. Self employed people get no benefits other than what they provide for themselves. They don’t qualify for unemployment insurance if their business fails. They are not covered by workers compensation unless they take out their own policy. They pay double the FICA taxes that employees do. They get no paid vacations, etc.

    Your prospective employer is trying to illegally evade payment of payroll taxes and is trying to dump it on you. When caught — and the IRS is getting quite good at catching these bastards — the penalties from the IRS can often bankrupt the business. You don’t want to be on board when that happens.

    See this IRS page for more information: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-%28Self-Employed%29-or-Employee%3F

    If they insist in proceeding, file a Form SS-8 http://www.irs.gov/pub/irs-pdf/fss8.pdf with the IRS to get a formal ruling on your status.

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  3. Quick Answers on Oct 30, 2012 Reply

    Your post reeks of tax fraud.

    1. Being paid under the table and then you deciding not to declare the income is tax fraud. Many people desperate for work simply track the money and file anyway. Going back and saying hey, I wasn’t going to report this money, so I want more is admission that you planned to be a tax evader.

    2. They apparently have just figured out that if they don’t report the income to the IRS, they can’t deduct what they pay you and they’d have to pay the income tax. Thus the 1099-Misc. This puts the IRS on notice that you got paid so you can’t try to conveniently forget to declare the income.

    3. They can’t actually choose to make an employee a contractor. The decision is based on facts and circumstances. You can file a form SS-8 with the IRS and ask for a determination. If the IRS agrees that you are an employee, then you would only owe the fica/mc that an employee would pay.

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  4. tro on Oct 30, 2012 Reply

    no such thing as a 1099 employee, that is absolutely an INDEPENDENT CONTRACTOR
    as such you are, to say the least, INDEPENDENT
    meaning just that, you control your own hours, you use your own tools, you determine how you will do the job etc
    this is probably not the case here but to cut to the chase, you will pay your own self employment tax, you are not covered by workmen’s comp, you are not eligible for unemployment when they let you go etc
    to really get a determination you can get the SS8 from http://www.irs.gov submit to that agency and let them decide your status

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  5. Bobbie on Oct 30, 2012 Reply

    1099-MISC you would NOT be classified as a employee that would have a employer for this purpose at all and NOT a very good thing to be at this time in your life for this purpose.
    None of the available benefits of have a employer that would withhold the required taxes and pay Unemployment Insurance taxes so that later on in life when might get laid off from your job you MIGHT be able to qualify for some of the UI payment amounts after you would have been employed long enough to be able to qualify for them at that time in your life.
    The Internal Revenue Service has developed a new form for employees who have been misclassified as independent contractors by an employer. Form 8919, Uncollected Social Security and Medicare Tax on Wages, will now be used to figure and report the employee’s share of uncollected social security and Medicare taxes due on their compensation.
    Generally, a worker who receives a Form 1099 for services provided as an independent contractor must report the income on Schedule C and pay self-employment tax on the net profit, using Schedule SE. However, sometimes the worker is incorrectly treated as an independent contractor when they are actually an employee. When this happens, Form 8919 will be used beginning for tax year 2007 by workers who performed services for an employer but the employer did not withhold the worker’s share of social security and Medicare taxes.
    In addition, the worker must meet one of several criteria indicating they were an employee while performing the services. The criteria include:
    The worker has filed Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, and received a determination letter from the IRS stating they are an employee of the firm.
    The worker has been designated as a section 530 employee by their employer or by the IRS prior to January 1, 1997.
    The worker has received other correspondence from the IRS that states they are an employee.
    The worker was previously treated as an employee by the firm and they are performing services in a similar capacity and under similar direction and control.
    The worker’s co-workers are performing similar services under similar direction and control and are treated as employees.
    The worker’s co-workers are performing similar services under similar direction and control and filed Form SS-8 for the firm and received a determination that they were employees.
    The worker has filed Form SS-8 with the IRS and has not yet received a reply.
    By using Form 8919, the worker’s social security and Medicare taxes will be credited to their social security record.
    To facilitate this process, the IRS will electronically share Form 8919 data with the Social Security Administration.
    SS-8 Form
    Form SS-8 (Rev. August 2011)
    Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding
    Form (Rev. August SS-82011) Department of the Treasury Internal Revenue Service Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding OMB. No. 1545-0004 For IRS Use Only: …
    http://www.irs.gov/pub/irs-pdf/fss8.pdf
    2011 Form 8919
    Uncollected Social Security and Medicare Tax on Wages
    Form 8919 Department of the Treasury Internal Revenue Service Uncollected Social Security and Medicare ▶ See instructions Tax on back. Wages ▶ Attach to your tax return. OMB No. 1545-0074 Attachment 2011 Sequence No. …

    http://www.irs.gov/pub/irs-pdf/f8919.pdf

    Hope that you find the above enclosed information useful. 10/30/2012

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  6. Max Hoopla on Oct 30, 2012 Reply

    There is no such thing as a 1099 Employee. You are either an employee or an independent contractor. An employee has to follow the employers orders about when to show up for work and how to do the job. An independent contractor is responsible only for getting the job done. If you are really an employee, withholding taxes is not optional; you can’t mutally agree to be treated as an independent contractor..

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  7. Judy on Oct 31, 2012 Reply

    There is no such thing as a 1099 employee. An employee gets a W-2, not a 1099.

    Whether they give you a 1099 or just pay you without paperwork, your legal obligations are the same to pay the tax. To just take money for working but not report it on a tax return and pay what you owe is called tax evasion. That isn’t what you were suggesting you’d do if the didn’t give paperwork, is it?

    And if it was, be aware that this can get you in big trouble. If the business is audited, you end up caught right along with them.

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