1099

[jaylectricity]

So a contractor that gets me some work mentions to me that he'll have to "give me something" for taxes at the end of the year. Not sure why he didn't just say, "I'm going to give you a 1099."

I was thinking that it's his right to report the money he took in as revenue and then report the money he gave me as an expense. But basically he's making me pay the tax on the job while profiting by marking up my bill.

He makes some money for picking up the phone. If he makes $300 on my $700 job by collecting $1000, is this a fair exchange?

 

[480sparky]

So a contractor that gets me some work mentions to me that he'll have to "give me something" for taxes at the end of the year. Not sure why he didn't just say, "I'm going to give you a 1099."

I was thinking that it's his right to report the money he took in as revenue and then report the money he gave me as an expense. But basically he's making me pay the tax on the job while profiting by marking up my bill.

He makes some money for picking up the phone. If he makes $300 on my $700 job by collecting $1000, is this a fair exchange?

If you're charging him $700, then your profit should be included in that price, not the price he gives to his customers. if you're not making anything at seven hundred clams, then you need to raise your prices.

Your deal is with the GC for $700. What he does beyond that is none of your business.

 

[Volta]

Maybe . . .

 

[cadpoint]

... If he makes $300 on my $700 job by collecting $1000, is this a fair exchange?

500.00 is taxable (last I knew), your on the Hook for 700.00, Hopefully...
Maybe ask to cut that margin for a broker'n fee because of for your availablity... :roll:

 

[jaylectricity]

If you're charging him $700, then your profit should be included in that price, not the price he gives to his customers. if you're not making anything at seven hundred clams, then you need to raise your prices.

Your deal is with the GC for $700. What he does beyond that is none of your business.

I don't think in "profit" terms, but I get what you're saying. But I'm also getting hosed with the homeowner because he thinks I charged almost 43% more than I actually charged. This means that he might not want to use me again.

But if I try to deal with him directly I might lose the GC as a contact if I don't cut him a check for getting me the work.

On one hand, it's paying for advertising after you've already secured the job. On the other hand it's giving somebody money for the privilege of knowing you.

 

[480sparky]

I don't think in "profit" terms, but I get what you're saying. But I'm also getting hosed with the homeowner because he thinks I charged almost 43% more than I actually charged. This means that he might not want to use me again.

But if I try to deal with him directly I might lose the GC as a contact if I don't cut him a check for getting me the work.

On one hand, it's paying for advertising after you've already secured the job. On the other hand it's giving somebody money for the privilege of knowing you.

Either raise your price, or consider the three c-notes as 'advertising expenses' you didn't have to pay. After all, what did you have to pay to get the job from a GC that always hires you?

 

[jaylectricity]

500.00 is taxable (last I knew), your on the Hook for 700.00, Hopefully...
Maybe ask to cut that margin for a broker'n fee because of for your availablity... :roll:

My availability is what keeps this guy calling me. I keep my schedule flexible. That's my offering to the building world. It never makes me a millionaire, but it keeps people calling me to see if I can take care of something right away.

 

[jaylectricity]

Either raise your price, or consider the three c-notes as 'advertising expenses' you didn't have to pay. After all, what did you have to pay to get the job from a GC that always hires you?

Yeah, I don't mean to sound ungrateful. Just wondering what other electricians thought about this scenario.

 

[Buck Parrish]

Sounds like " The company store"
and your the employee and customer

 

[cadpoint]

Yeah, I don't mean to sound ungrateful. Just wondering what other electricians thought about this scenario.

Were all not so Blessed, sometimes the blessing goes by unknowingly and maybe we can make it up with some WIT (Whatever it takes) and the closing phrase of the 6th thread.

 

[Sierrasparky]

Are you saying he is 1099 for the 1000.00 he bills the customer and pay's you 700.00 .
That is wrong and probably illegal.
If you are giving him a kickback then you need to write that off and 1099 him.
It's alll fair.....

 

[480sparky]

Yeah, I don't mean to sound ungrateful. Just wondering what other electricians thought about this scenario.

Builders & GCs who are always calling me to do work get a break from my 'normal' pricing.

 

[PetrosA]

So a contractor that gets me some work mentions to me that he'll have to "give me something" for taxes at the end of the year. Not sure why he didn't just say, "I'm going to give you a 1099."

I was thinking that it's his right to report the money he took in as revenue and then report the money he gave me as an expense. But basically he's making me pay the tax on the job while profiting by marking up my bill.

He makes some money for picking up the phone. If he makes $300 on my $700 job by collecting $1000, is this a fair exchange?

For him to get $1000, he needs to give the customer a bill from his company, no? You give him a bill for $700, and he has to pay tax on the $300 profit he made. If it's not working like that, then something's fishy in Denmark

 

[480sparky]

For him to get $1000, he needs to give the customer a bill from his company, no? You give him a bill for $700, and he has to pay tax on the $300 profit he made. If it's not working like that, then something's fishy in Denmark

Why does a GC 'have' to show a HO what he's paying his subs?

If a GC sends me a 1099 for $700, that means he's deducting that $700 off his taxes. He should be claiming gross income of $1000, making it a net profit of $300 of which he should be calculating taxes on.

 

[hardworkingstiff]

Why does a GC 'have' to show a HO what he's paying his subs?

If a GC sends me a 1099 for $700, that means he's deducting that $700 off his taxes. He should be claiming gross income of $1000, making it a net profit of $300 of which he should be calculating taxes on.

I think you guys just said the same thing.

 

[growler]

He makes some money for picking up the phone. If he makes $300 on my $700 job by collecting $1000, is this a fair exchange?

There is really a lot to consider here. First he writes you a check and he has to collect from the homeowner and that means you are subcontracting from his company. If he carries workmans comp. and you don't then he will have to cover you as an uninsured sub. This really is his job and if anything goes wrong the homeowner can come back on him because he is the general contractor ( you are working for him, remember that ). You may or may not be around very long, depends on if you learn to cover your taxes, so the GC is kink of on the hook here.

You want to know the truth there are many GCs that would mark things up more than this guy. At a thousand bucks he is probably letting them get off cheaper than hiring a real EC. A real EC is going to know all about those taxes and other expenses and price the job to account for them, and after that the GC still has to add in his profit. This job could easily have cost the homeowner 2 grand. Not every contractor can find someone that thinks they are working for cash ( and really stick it to them).

 

[ivsenroute]

I am not sure that you are getting it:

1) Whenever a contractor pays you more then $600. in any calendar year, he must issue you a 1099 and report it to the IRS. You should be reporting this income anyway and doing your regular deductions as normal. This is standard. If you carry your own insurance and are a true subcontractor then you will and should get a 1099 form.

2) The contractor can only 1099 you for what he paid you. So if you billed him $700 for the whole year and he paid you $700 then you will be getting a 1099 form claiming $700.

3) If you are incorporated and he writes the checks to your corporation then he does not have to 1099 you.

4) It is the law and I don't see the problem here. You received $700 compensation for your services and have to claim that on your taxes. I am sure that you had expenses for that job that were part of your usual deductions for that year.

 

[ceb58]

I am not sure that you are getting it:

1) Whenever a contractor pays you more then $600. in any calendar year, he must issue you a 1099 and report it to the IRS. You should be reporting this income anyway and doing your regular deductions as normal. This is standard. If you carry your own insurance and are a true subcontractor then you will and should get a 1099 form.

2) The contractor can only 1099 you for what he paid you. So if you billed him $700 for the whole year and he paid you $700 then you will be getting a 1099 form claiming $700.

3) If you are incorporated and he writes the checks to your corporation then he does not have to 1099 you.

4) It is the law and I don't see the problem here. You received $700 compensation for your services and have to claim that on your taxes. I am sure that you had expenses for that job that were part of your usual deductions for that year.

And I will add to that. Keep good records of how much you have billed and collected from the GC. Then at the end of the year you can compare your billing and collection against the 1099 he gives you. I had a GC try and 1099 me for my bills plus his mark up. I took my records to his accountant and told her that my next stop was at the IRS. She fixed the problem and fired him as a client for giving her false ledgers.

 

[Sierrasparky]

And I will add to that. Keep good records of how much you have billed and collected from the GC. Then at the end of the year you can compare your billing and collection against the 1099 he gives you. I had a GC try and 1099 me for my bills plus his mark up. I took my records to his accountant and told her that my next stop was at the IRS. She fixed the problem and fired him as a client for giving her false ledgers.

Wow what a jerk. Hope he get's what's comming.

 

[ceb58]

Wow what a jerk. Hope he get's what's comming.

He did. I kinda let the other subs know what he was trying to pull and for them to double check their records. It wasn't long he could not get any reputable subs to do any work for him. Then when the slow down hit it put him into bankruptcy.