POLE PWI- what do you pay starting labor...?

[Ron Musgraves 240]

**********/board/upload/showthread.php?postid=31415#post31415

click above to vote

[Paul B. 523]

If you ask the employee, the answer is: Not enough!

If you ask the employer, the answer is: Too much!

[Ron Musgraves 240]

i'll bet..LOL did you read the pole latelty Paul?

[Paul B. 523]

Yes I have Ron.

It always amazes me that folks are surprised by IRS guidelines on sub-contractors. Most do not do their homework and others choose to go underground. When it catches up with them it will be costly!

The other item that will catch up with folks is hiring illegals - rules are tightening and while it may take a few years, the ones that are caught will not be very happy.

I'm all for tightening enforcement, since the businesses that are complying to laws are competing on uneven grounds. Also, the underground folks just do not realize how much they are hurting the economy.

I've posted on this subject several times on several BB's.

Although the test for sub-contractor seems extremely difficult to meet, it's actually fairly straight forward after you understand the concept of a sub-contractor.

There are a few other items that were not mentioned, such as:

- The business has burden of proof for a subcontractor relationship.

- The business is required to file 1099 form each year for any subcontractor it paid over $600.

- By not filing the 1099 form, this person or entity is automatically considered an employee for that year.

- If a person was considered an employee the previous year, they can not be considered a subcontractor, if they do the same work.

- Is there a written agreement or contract between the business and the subcontractor.

- How does the business represent the worker to its customers.

I know I missed at least a couple of others so it's best if people read for themselves.

The document at this site: www.irs.gov/pub/irs-utl/emporind.pdf is a study course for IRS employees on determination of small business Section 530 tax relief qualification. In other words, this is the guide which is used in determining if a business is qualified to NOT pay federal taxes because the individual is considered to be a sub-contractor. This is a 160 page document with study and precedence cases.

[Ron Musgraves 240]

Always great info Paul, sometimes you can tell them and tell them, they dont get it.

[Beth n Rod 1,279]

Maybe we should post that poll here too. ;)

[Jon 533]

The law on hiring illegals has been around for years yet the companies that break that law more then others are meg-corps. They can afford to hire the lawyers to defend against government harrassement and enforcement.

Back in the 60s and 70s while working the uniform business I remember many times those green cars scooping into the parking lot and trying to round them up, the company would hide them everyplace, under dirty laundry, in emptied washers and dryers, inside trucks just leaving, was a joke.

Always happened just before the Holidays, year in and year out.

IF just that one law was enforced 100% and IF there was a law saying no American company can out source to other countries there would be more American jobs saved.

Like I have said before, show me just ONE AUTOMOBILE made 100% in America, 50% or more of those parts are imported so it is not made in America but assembled in America.

I bet our pressure washers are no different, not 100% manufactured with American parts.

[Paul B. 523]

It's all about enforcement.

A couple of three other things I didn't hit on in regards to sub-contractors in my earlier post.

One is the liability insurance - are you as a contractor covering your subs or do you make them have the insurance. Better check your policies!

Second, when these subs are set up legally, are they really going to work for you for the prices you're willing to pay?

Third, after you have been audited, you become flagged by the IRS and become a target for frequent future audits.

[Ron Musgraves 240]

Beth, you can adjust the thread, its a good topic about subs. make a new thread or pole about who subs? that post the link on *** where they are talking about this.

I know the law about sub contracting. most do not meet the requirements. the sub really needs to be a sub. ist pretty much that simple. those who think they have it beat just have not been caught.

There are ways around paying all the required misc: things involved with employees. I choose not to practice for reasons of my own. However there are better alternative methods. Some can have employees sign off on these obligations. Remember Income tax only falls on one person,,,, Yourself...

[Bozobush 47]

Can we please start spelling "poll" correctly? I swear, the ability of this group to spell or write coherently amazes me. Next, who cares what others are paying? Just as with what one charges, it is all based on factors that have little in common between companies, locations, type of work. Essentially, the poll and it's figures are meaningless.

Next, despite what Ron, "Mr.-I-subcontract-everything", says, the taxes do not just fall on the employee. The employer become liable for all withholding that was never done, including penalties and interest.

As an aside, is there a reason Ron is always trying to use this board to drive people to "his" board?

[Ron Musgraves 240]

LOL, wrong,,, personal income tax is ultimately your responsibility.

the withholding your reffering to are Fica, state and others such as des ect. of course if the employee claims an income status you would need to withhold. I guess you didnt read carefully.

Since my spelling is poor i'm sorry you cannot understand or read what i say. Barry you have informed me about my spelling in the past. your repeating yourself.

Correct yourself again, Mr. i sub-contract everything... I use real subs...sorry you are upset about it.

Thanks for the correction on poll.. I will probably spell it pole again. Sorry for you thinking everyones and idiot becasue they can't spell correctly.

you see some would be intimidated by your pole remark. I'm not upset with you at all Barry. I just wish you would quit hiding behind that stupid user name.

Beth, THIS is why real names need to be used. this wouldnt exist unless. BArry (Bozobush) I will not engage in your posts. Bye!!

[One Call Power Wash 500]

Okay, Okay now.

BoSbush, yu our wrog ther. This be a forum of busie folks andd wee are understand how to read/write. Unfortunatly, do too high volume of foks like yous, that us spell inccorectly.

Please do not use this board as a personal attack board. There is no need in it. Granted, yes we all make mistakes and yes some of us type faster then others to make those mistakes but this is little compared to the info that this board as well as others provide. As for Ron, he is a great member on many boards. I say great because if nice enough he may leave me part of his empire once he leaves this world as well as he post content and not waste 5" x 9" space on this board as you have done (posting nothing of value).

Please post relative information. Newbies are watchin.

Hows this for starting out as a new moderator ?

[Beth n Rod 1,279]

Personally, I suggest anyone serious about being in business hire a CPA to help get your corporation set up, to handle your taxes, and to advise you on employee withholdings. Many will offer payroll service or can direct you to one.

I can tell you this with certainty...

Hiring temporary labor from a company such as Labor Ready, they handle the taxes for you, you are paying them for the service of the person working.

If you have a full time or part time employee, you need to be withholding taxes, both Federal and state, as well as social security and in many cases local taxes. Employees work directly for your company and do not have a company of their own. At the end of the year you should be generating a W-2 for them.

Subcontractors would have to take money out of the money you pay them for their own taxes (as I understand it, please talk to a CPA) and at the end of the year you generate a 1099 for them. They should be filling out a form W-9 for you when you begin to use them. You should also have a copy of their liability insurance on file.

Hope this helps,

Beth:groovy:

[Henry B. 4]

I have used "actual" subcontractors in the past but they just didn't work out for me very well at all. In fact, my most used subcontractor was a company my dad started so that he could legally sub jobs from me. Everything was completly legal and well checked out with the irs, cpa and tax accountant of course. The problem was, I wasn't happy with the quality of his work and his constantly trying to change his pricing structure. I know subs can charge whatever but their work has to be worth the price.

I ended up having to fire him a couple years ago. Now I use strictly employees and his company is going down hill so fast that it's running away from him. I've tried giving him advice but so far he's not listening.

[Ron Musgraves 240]

I think its many case the state labor board. the irs just cares about the money being paid corerctly.