1099

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masterinbama

Senior Member
As some of you here know I am currently involved in a large renovation project. Because there were no defined drawings or specifications the owners and I agreed that cost + (hourly labor and material + markup) was the most efficient way to go. The owners accountant is now saying we need to renegotiate because he claims they cannot 1099 me for what they have paid me. I believe their accountant is wrong because I know I have been 1099'ed on several cost+ projects over the years. Any thoughts on this.

I am getting the feeling they want to lock me into a fixed price situation, which would be next to impossible.
 
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infinity

Moderator
Staff member
Location
New Jersey
Occupation
Journeyman Electrician
Master,
Why do you need a 1099 in the first place. Are you considered an employee of the company? I must have missed the other thread.
 

Article 90.1

Senior Member
When the owners acct. says they can't 1099 you why do they need to renegotiate? The price should be the same no matter how you are being paid, no?

There is another story hidden in here somewhere, you need to find out what is really bothering the customer or the acct.
 

480sparky

Senior Member
Location
Iowegia
1099s have nothing to do with doing jobs or the agreements you make for the price of the job. They are for tax purposes only.

They send you a 1099 stating they paid you $xxxx.xx last year so they can deduct the figure from their taxes, and you use the same number to calculate yours.
 

infinity

Moderator
Staff member
Location
New Jersey
Occupation
Journeyman Electrician
I'm no account but why would you want a 1099 that includes "(hourly labor and material + markup)"? Doesn't that material cost included in the 1099 end up as income?
 

Smart $

Esteemed Member
Location
Ohio
I'm no account but why would you want a 1099 that includes "(hourly labor and material + markup)"? Doesn't that material cost included in the 1099 end up as income?
Yes it does, in a way. But it is no different than invoice payments being broken down into taxable and non-taxable income amounts. Income simply means one received money, but it is no reflection of whether it is taxable or not... that is up to the filer (or his accountant... or the auditor :mad:) to break it down accurately.
 

Smart $

Esteemed Member
Location
Ohio
As some of you here know I am currently involved in a large renovation project. Because there were no defined drawings or specifications the owners and I agreed that cost + (hourly labor and material + markup) was the most efficient way to go. The owners accountant is now saying we need to renegotiate because he claims they cannot 1099 me for what they have paid me. I believe their accountant is wrong because I know I have been 1099'ed on several cost+ projects over the years. Any thoughts on this.

I am getting the feeling they want to lock me into a fixed price situation, which would be next to impossible.

Is your billing by invoice?

If so, just tell their accountant to 1099 you for the total of all your invoices they have paid through their fiscal year. As mentioned in my other post, your accounting should show how your invoice charges break down into taxable income vs. non-taxable deductions.
 
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N844AA

Member
Location
Los Angeles
In Michigan all electrical work has to be done by a state licensed contractor with licensed or registered employees. 1099 electrical work is against the law here.

When you subcontract work from a general contractor, he does not 1099 you? This is a federal IRS requirement, I'm surprised that issuing a 1099 is a crime in your state.
 

satcom

Senior Member
In Michigan all electrical work has to be done by a state licensed contractor with licensed or registered employees. 1099 electrical work is against the law here.

Yes, same here in Jersey and in many other states where there is a licensing requirement.
 
I don't see the accountant's problem, unless they're not really an accountant. You should get a 1099 that shows every dollar they've paid you. Actually, from your perspective, it doesn't matter whether they send a 1099 or not, the accounting is the same (show gross income, deduct expenses, get net income, pay taxes).
 

growler

Senior Member
Location
Atlanta,GA
In Michigan all electrical work has to be done by a state licensed contractor with licensed or registered employees. 1099 electrical work is against the law here.

When you subcontract work from a general contractor, he does not 1099 you? This is a federal IRS requirement, I'm surprised that issuing a 1099 is a crime in your state.

What's against the law is working as a 1099 employee ( unlicensed contractor) doing electrical work.

A 1099 is for keeping track of money paid to legitimate sub contractors that are not operating as corporations.

A licensed contractor can work as sole proprietor, LLC or corporation. Even for an LLC a 1099 is required so I really don't see where the accountant would have any problem with sending out a 1099 for work done under any sort of contract. Uncle Sam just wants to know how much you made he doesn't care how you made it ( how you make it is someone else's job ).:D
 

K8MHZ

Senior Member
Location
Michigan. It's a beautiful peninsula, I've looked
Occupation
Electrician
Why does state licensing preclude a 1099?

I found the notice they sent to the apprentii

http://www.michigan.gov/documents/dleg/dleg_bcc_electrical_apprentice_261286_7.pdf

On the second page is the following, sorry about the spacing

Additionally, the following list includes the most common
mistakes found when processing licensing and apprentice
registrations. Please review this list to assure you are in
compliance with the law.
1. Paying a master, journeyman or apprentice with a
1099. They must be on the company?s payroll.
2. A master who signs documents for individuals who do
not physically work for the company they are master
of record for.
3. Contractors who do not employ a full-time master
electrician.
4. Electrical contractors who are allowing unregistered
apprentices to be on a jobsite. All apprentices must
be currently registered in order to be on a jobsite.
5. Electrical contractors who are operating a business
under a name that is different than what appears on
their contractors license.
 
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