1099?

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Sparque

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Greets all... this is my first post so I will be it short and to the point.

I am new to the Seattle area and I am looking for work. I got to a shop and they do 1099's. Just wondering... as this is the first time I have seen this and I have only been in the trade for a short time ( just turned out ). Is this a norm and can I see this at more shops.

Any input would be great good or bad, I really don't see any bad reasons, just not sure what the difference really is. Is only better for the EC and I get the shafted?

Thanks all
 
Depends on what they pay. Essentially you'll be subcontracting. However, be aware you will (if the same as Ohio):

  • Have to pay your own income taxes/social security (estimated and paid quarterly),
  • Not be covered by workers comp unless you pay yourself,
  • Not be eligible for unemployment when out of work, and
  • Not have any employer paid benefits, such as medical/dental/eye insurance, pension, etc..
Technically, you will be self-employed. I'm sure there are others items that can be added to the list, but those are the ones that come to mind.

The pros might be: it'll put food on the table, you can possibly build a reputation making it easier to go out on your own, perhaps some others that I can't think of at present.
 
So you are an "Independant Contractor"? All ready?! Or are you an "Employee"?

It should be noted that many reputable buisiness people are ignorant of the law. Some are not.... They know full and well what they are doing.... So don't take what I am about to say the wrong way....

1099's and some people who do them sometimes could be looking for a way out of taxes, and a sucker who doesn't look for that "extra" money to fully compensate themselves for all the taxes they are going to have to pay when they get the shaft when they file thier taxes. And those people wont care about your unhappiness when you realize that you made slightly above minimum wage at years end. So it is important to make sure you are compensated for all those taxes you're gonna get nailed with.

But as an indepentant contractor, you can renegotiate your fees, unless otherwise contractually obligated... (That is if you are even legally allowed to work as an "Electrical Contractor" under the laws of your state, and have your own buisiness licence, etc.)

But if you have a regular "Supervisor", and are generally treated as an "Employee" - you can bet that your "Employer" has no clue...

Some advice from our government....

http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

http://www.topechelon.com/recruiters/contracting/definiti.htm

http://www.topechelon.com/recruiters/contracting/20point.htm


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I have no idea whats up with me and URL's lately, but they're in there - like Ragu... :)
You'll just have to extract them yourself.... And really advise you do so...
 
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Along with e57s good advice and links I will add this.

Whatever amount they pay you, figure you need to put away almost one third of it for taxes.

For example $1000 a week may sound great until you relize your lucky if you keep $700 of that.

It can work as long as you go into it knowing what the Govt will expect from you.
 
I just checked my pay stub-I bring home 69% of my gross pay. When my benifits kick in and I start paying my part of health, dental, IRA, etc, it will go down. Of course different states have different (or no) income taxes.
 
Short and to the point. Unless the $$$$ is 3 times what you would make hourly or/ weekly run don`t look back.I was part of a shop that had a cash payday.This was awhile ago but most of the guys took a serious bath with the IRS.
BTW after it was all said and done the company went into a standard pay scenario.Hourly and a piece rate that was actually transposed into an hourly rate.

If it`s to good to be true it probably is to good to be true.Remeber this subtle line.Let the buyer beware..............
 
Dittos on the "make sure you save for your taxes", and especially the quarterly filings / estimates / payments mess.

In addition to being absolutely sure to pay all your taxes, whenever I've worked 1099, I've been more mindful that unemployment is just around the corner. What that means is saving even more money so that when you're unemployed you aren't stuck eating dogfood.
 
Sparque said:
I got to a shop and they do 1099's. Just wondering... as this is the first time I have seen this and I have only been in the trade for a short time ( just turned out ).
Click to expand...

If you are not a licensed electrician I doubt if this is even legal. To work under the license of a master requires direct supervision ( an empolyee ) and to use a 1099 tax form requires a sub-contractor.

If you need money and enter into this agreement then document all the hours that you work and keep copies of all checks. Make notes of any supervision ( times required to be on the job, standard break times, materials furnished by employer ).

When you leave the company then go to the labor board with proof that you were really an employee and make the employeer pay his share of the taxes.
 
Sparque, here's the law.

Under what circumstances can L & I Revoke my license?

Your electricians' certificate could be revoked for the following reason's:

The certificate was btained through error or fraud.

The holder is judged to be incompetent.

The holder violates any of the provisions of RCW 19.28.620.

Does my electrician's certificate allow me to advertise and do small jobs?

No. A certificate allows you to to work only in the electrical construction trade for a licensed electrical contractor. Labor and Industries can explain these requirements.

Will my electrician's certificate allow me to advertise and do small jobs?

NO. State law defines such work as contracting, which requires a different certification. Chapter 19.28.005 RCW defines electrical contracting as".. a person ,firm, partnership, corporation, or other entity that offers to undertake, undertakes, submits a bid, or does the work of installing or maintaining or equipment that convey electrical current." If you do such work without an electrical contractor's license, you are subject to a fine. Your electrician's certificate also could be revoked.

Sound harsh? It's straight out of the books in Washington.

My advice would be Run don't walk from these clown's! But hey what do I know I know, I only a master's in Washington state.

Here's a link - http://www.lni.wa.gov/IPUB/500-004-000.pdf
 
growler said:
If you are not a licensed electrician I doubt if this is even legal. To work under the license of a master requires direct supervision ( an employee ) and to use a 1099 tax form requires a sub-contractor.
Click to expand...
I would like to offer one comment on this statement. A Master can give ?direct supervision? to a person who is not an employee of the same company. The notion of supervision has nothing to do with employment status, but rather is all about watching the work and making sure it is done correctly.

As a personal example, at the moment, I am working as a contractor in an engineering office. The head of this office will be signing and sealing any drawings I create. In doing so, he will be certifying that the work was performed ?under his supervision.?
 
Charlie, at least in my area there is a lot more to it than just direct supervision.

An apprentice can not 'sub contract' to a licensed person.

Sub contracting is considered running an EC business and apprentices can not do that in this area.
 
Rockyd said:
Chapter 19.28.005 RCW defines electrical contracting as".. a person ,firm, partnership, corporation, or other entity that offers to undertake, undertakes, submits a bid, or does the work of installing or maintaining or equipment that convey electrical current."
Click to expand...
Here in Va., it can't even be "a person," but must be a business entity, whether a sole proprietor, partnership, corporation, etc.

There must be a business license in the company name. I both own a corporation (I'm president, actually), and hold a Master's licence. That's the bare minimum.
 
The IRS has jurisdiction over the "employee" status. A general rule is that anyone who performs services for you is your employee if you can control what will be done and how it will be done. In your case, if you do not have the proper certifications to be an electrical contractor, you are an employee, and in most cases your employer does NOT have the option of withholding taxes or not. It must be withheld and remitted to the IRS daily, weekly, monthly or quarterly, depending on the total amount accrued by an employer.
 
Larry,

All my post is copied from Wahington state law, check out the link. I also have a Masters there.

Sometimes we don't like the law, but it is what it is. Thinking back on Charlie b's rule on code! We just have to be players in the game. My gut feeling is "Run, don't walk, if this is the game with said contractor! There is a reason where the buck stops, is also a reason for them to get "big" bucks! Hats off to you guys.
 
IMO - Unless this guy is getting paid well - this EC is getting away with paying his share of FICA and other taxes and liabilities.

I think it is clear to all but a few here that the practice - is borderline illegal, and dubious at best.

And for those who are out there doing this... It's just a red-flag for an audit down the line. State and Federal... Eitherway, it is best to know the law, and follow it to the letter on both sides of a 1099. As willful misclasification can be both a criminal and civil matter. Imagine getting hammered by the IRS, brought to court for fraud by the State, and getting sued/with-held by all, including your employees once they learn you own them back taxes.

Check out this form, and give the questions an answering - and see if you pass the test.


www.irs.gov/pub/irs-pdf/fss8.pdf
 
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Wow.... thanks all for the many replies. I really didn't think it would get this many. All gave some pretty good input, either it be good/bad. I am going to print out many of these questions and ask them to the owner and will post back. I am really just curious now as to why they are using this approach to business. It's seems to be an ok place.... they don't have beat up van's and all look pretty professional with some pretty good pay for the area. (at least what I have seen)

Oh... and thanks to the ones that posted the WA links.... going to look at them now so I can get to know WA better since I plan on being here for a while:)
 
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