I am a small business gaining income with independent contractors who work with me. I have income form other agencies as an IC but am growing with private clients, and would like to wean out of the IC status. I do sign confidentiality agreements with my clients, and also at the time receive 1099 from the companies I work with as an IC, I plan on submitting my new EIN and they now want to send me two 1099, one as IC and one with new EIN. does this pose a problem?
2007-06-30 07:19:34 · 2 answers · asked by CarolLee K 1 in Business & Finance ➔ Taxes ➔ United States
You can get 2 1099s but your corporate isn't taxed based on 1099s but on the corporate books. You will then need to deal with payroll taxes for yourself.
Make sure you have an accountant advising you on the independent contractors, the IRS is very careful who they let claim people aren't employees. If you are paying them 1099 income and they don't pay their taxes they may come back and say they were an employee so you should have paid taxes for them. Also make sure they have insurance and don't expect unemployment. They be independent but you do need to make sure you understand the laws deciding that.
2007-06-30 07:52:25 · answer #1 · answered by shipwreck 7 · 0⤊ 1⤋
If you are a sole person LLC you can report your EIN 1099 income on your schedule C along with what you are calling IC income. However LLCs are rarely a good idea for small businesses.
2007-06-30 12:02:14 · answer #2 · answered by ? 6 · 0⤊ 0⤋