1099

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ceb58 said:
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.
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Sounds like a story that is ending well.
 
So - who paid you what?
If you were paid 700 - that is your income - and the only amount you should get a 1099 for...

If the HO is getting billed a higher amount - that they paid to a 3rd party - the GC, needs to also claim that as part of his income. NOem of what you were paid - NOT shift that to you...

If you are getting a 1099 from the HO - then simply inform them of what you were paid - let him do his own explaining...
 
To clarify, yes, I will be claiming that $700 on my taxes. It makes sense that he will be claiming $300 as his own profit. Thanks to this thread I will make sure he's only 1099'ing me for the amounts he paid me.

I am also licensed and insured. It sounds like some of you think I'm just working under the table for cash.
 
jaylectricity said:
To clarify, yes, I will be claiming that $700 on my taxes. It makes sense that he will be claiming $300 as his own profit. Thanks to this thread I will make sure he's only 1099'ing me for the amounts he paid me.

I am also licensed and insured. It sounds like some of you think I'm just working under the table for cash.
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Nope did not think that.
 
I was curious as to what you were really concerned with. Were you thinking he was going to 1099 you for what he charged the customer?
 
jaylectricity said:
If he makes $300 on my $700 job by collecting $1000, is this a fair exchange?
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First, I am not an electrician, although I often do industrial electrical work (wiring motors, PLCs, automation equipment, electro-hydraulic servo drives and feedback devices). I also commission jobs where there may be nothing more than checking things out before having power applied and making start-up adjustments.

I subcontract to several fluid power distributors. They create the job, sell the job, and collect the money. They typically earn (yes, EARN) 30-35% of the invoiced price. They pay me promptly. I do work for them at 10% less than I do on the open market. They give me a 1099 each year. I usually was unfamiliar with the project, often with the customer.

I have seen the cost accounting in their business for many years, and feel that the arrangement is a win for all of us; I get more business and prompt payment. They get customers who universally are happy to have a knowledgeable, experienced, person performing the job ... who can explain the hows and whys of the salesman's and engineer's decisions.

YMMV, but I think they are fair.
 
jaylectricity said:
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 tax on the job while profiting by marking up my bill.
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jaylectricity said:
I am also licensed and insured. It sounds like some of you think I'm just working under the table for cash.
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I'm sorry for thinking that you normally work for cash under the table if that's not the case but that statement about the GC making you pay tax sounds rather suspicious.

A GC does not make you pay taxes all he can do is report money that he paid to you as a sub contractor. He is required to keep these records for both the IRS and his insurance carrier. When he is audited by his workman's comp. carrier they will want to know the name of every sub contractor hired by the GC and the amount paid out.

If you are keeping proper records a 1099 is nothing to worry about because if you are audited by the IRS they can go directly to your bank records. They can find out how much money you take in, with or without the 1099s. They don't give a darn where you got it just how you can account for it. That's why you have to keep records, to show that it's not all profit.

You also need to keep records for your liability insurance carrier because they don't offer blanket coverage for just any job that someone thinks you may or may not have done.

As far as a GC sending out bogus 1099s, only an idiot would try to do that. His accountant should be checking his banking records to make sure that checks cut can substantiate any expenses paid out. If he paid in cash he would need a receipt for money received by others . You are only allowed a few bucks for casual labor and it's best to keep records of those ( just in case).
 
growler said:
I'm sorry for thinking that you normally work for cash under the table if that's not the case but that statement about the GC making you pay tax sounds rather suspicious.

A GC does not make you pay taxes all he can do is report money that he paid to you as a sub contractor. He is required to keep these records for both the IRS and his insurance carrier. When he is audited by his workman's comp. carrier they will want to know the name of every sub contractor hired by the GC and the amount paid out.

If you are keeping proper records a 1099 is nothing to worry about because if you are audited by the IRS they can go directly to your bank records. They can find out how much money you take in, with or without the 1099s. They don't give a darn where you got it just how you can account for it. That's why you have to keep records, to show that it's not all profit.

You also need to keep records for your liability insurance carrier because they don't offer blanket coverage for just any job that someone thinks you may or may not have done.

As far as a GC sending out bogus 1099s, only an idiot would try to do that. His accountant should be checking his banking records to make sure that checks cut can substantiate any expenses paid out. If he paid in cash he would need a receipt for money received by others . You are only allowed a few bucks for casual labor and it's best to keep records of those ( just in case).
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I understood the statement about the contractor this way - If I bill a GC $1000 for work done and he bills his customer $1500 and sends me a 1099 for $1500, he's the one dodging taxes because he's trying to put the tax for $500 on me.
 
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