Correct me if I am wrong. It is my understanding that if a company employs you for everyday work and you are hired to do work with-in the nature of that business that the employer must pay taxes on you. I further believe that you can only hire someone as a 1099 employee is they are performing a service for you that falls outside of the company's business (example, if you are pizza cook in a pizza restaurant they must hire you as a regular employee for whom they share in the payment of taxes, but if you are a handyman and you come into the pizza shop on occassion to fix things then you can be a 1099 employee who is solely responsible to taxes).
Am I right or wrong? Can you site sources? I'd sure appreciate your help. Thank you.
2006-07-27 10:54:18 · 4 answers · asked by Doctor ~W. 5 in Business & Finance ➔ Taxes ➔ United States
Well, you are correct, but, you are wrong.
Let me explain.
You are asking a huge audience of 13 to 99 year old people a question that rankles the hair on our necks... We HATE taxes, and are trying to eliminate PAYROLL taxes, and get the WEALTHY to pay some, through the FAIRTAX ACT see http://fairtax.org
Your interpretations of the issues involving the 1099 reporting vs. the w4 are valid, BUT, have been ruled on BOTH sides, by different IRS regions. That makes it impossible for anyone out here to assure you a proper answer, because YOU need to ask YOUR IRS folks at your regional office!!!
That is ANOTHER example of why the FAIRTAX would be more equitable!
Government has already spent $4 million on investigating, and the GAO shows that the largest top-heavy bureaucracy on the planet, the IRS, would be eliminated!!!
The major opposing force is the CPA union of lobbyists! A second group is the Democratic Party, whose manipulation of worker wage taxation affects both businesses and workers, thus causing the reaction to 'sell our votes'.
But, they just don't see that their world of buggy whips wouldn't totally disappear!
And, income would INCREASE for each worker, while priices would drop (the hidden taxes on all consumer goods, all foods, all drugs, all go away), and the 'underground economy' is 'captured' whenever they purchase!!!
2006-07-27 11:13:38 · answer #1 · answered by Anonymous · 3⤊ 1⤋
A 1099 employee is not limited to someone who falls outside of the company's business operations. A 1099 employee should not be under "behavior or financial control or have a relationship of parties" (see first on source list) for in-depth examples, start on page six (see 2nd on source list). If you truly believe that you should be considered an employee and not a subcontractor, you can request that the IRS investigate and determine how you should be classified by completing a form (see third on source list). You could always hire an accountant to help you with this, but your question seems quite coherent to me - you shouldn't have a problem at all. Furthermore, you can call the IRS with questions at 1-800-829-1040. They have been very helpful to me in the past.
2006-07-27 18:10:39 · answer #2 · answered by Kristi C 2 · 0⤊ 0⤋
There are IRS rules on if you are an 'employee' or a 'contractor'. Right off the bat, you have to be available to work for more than one 'customer'. What complicates this even more, is that if there is a history of that line of work using 1099 employees, they are exempt from the other rules. Google contract employees, internal revenue service.
2006-07-27 18:01:11 · answer #3 · answered by northwest.poet 4 · 0⤊ 0⤋
That is absolutely correct with the exception of certain professional such as physicians and attorneys who can be paid on a 1099 under certain circumstances.....
2006-07-27 17:58:38 · answer #4 · answered by 3eleven 4 · 0⤊ 0⤋