Accounting Questions

[daniel@procarpet]

I just wanted to check here before I go to my accountant.

1. If I hire someone to pass out marketing materials, should I consider them an employee or independant contractor?

2. Same pricincipal as before. Someone to answer my phone part time would be an employee or ic? I would think they could aswer for more than one company and be classified as an ic.

3. This is obvious. A tech working for you making a percentage is an employee right. My friend has his own carpet business. If he helps me on jobs we do together, do I pay him like an employee or ic?

 

[joeynbgky]

pay him as a IND much easier, he can write off mileage. Oh and its cheaper for you. Check €withyour state all laws are different. if its not legal where your at, then thats your decision€€

 

[Ken Snow]

If you pay any of the above more than 600 in a calendar year they are an employee unless they have a business offering the service to other companies. If this is the case make checks payable to their company. You may get away with doing it as an independant and issuing a 1099, bt if you get an IRS (not state) audit they may nail you for it annd you will owe fed taxes and penalties.

 

[rick imby]

The laws are very specific by state. In Montana the Employment office has a booklet that explains things very well, that they will send out for free. That same flyer explains overtime very well also. I have a bonus system that pays more than overtime would be. I call the payment overtime plus. There are several key things to being able to call someone a sub and not an employee. You can take care of a lot of the requirements in the job description. As a one man operation try to keep them as a subcontractor. Filing a 1099 is simpler than work comp, withholding, etc. Be sure to tell the people right from the start they will be getting a 1099.

Making them get a business license before you start them and then only writing checks to their business name is a huge step.

For them it is a blessing because then many things in their life become a deduction and a curse because they have to pay both sides of their social security and medical deductions--that is of course if they make money.

 

[Wayne Miller]

I think the $600 mark is for 1099ing casual labor.

http://www.irs.gov/pub/irs-pdf/p1779.pdf

 

[Brian R]

Your accountant will know what you are doing and how you should do it. Be upfront with him/her.
It's not just how you PAY your worker...It's also how your worker WORKS and with WHAT.

In CA. if they use YOUR equipment then they can't be a sub and they have to be considered and Employees...there are a ton of other factors that can get you into trouble if you do it wrong.

Again, your accountant should know how you are set up and can give you advice on what to do and what not to do.

I pay my accountant very well to keep me out of trouble.

In CA. anything over $600.00 has to be 1099ed if subbed out.
Employee? Forget about it.