Taxes And A Ein

[cody1200]

Hello. I have a few questions to ask you guys about taxes. First I work at a small ish saddle shop and my boss just gives me a 1099 misc. and takes no taxes out on me throughout the year. I have read on the IRS websitem and to me it sound like I am considered an employee. I have certain hours I have to work and he tells me how to do things. The second part of my question is that if I declared myself as a buisness as far as a EIN. im not sure on how to go about that maybe some info on that would help also. but if i did go ahead and do that would it hurt me in anyway other than costs of getting it. I have been thinking about it for awhile anyway just to buy from weaver.

[Sylvia]

Hello. I have a few questions to ask you guys about taxes. First I work at a small ish saddle shop and my boss just gives me a 1099 misc. and takes no taxes out on me throughout the year. I have read on the IRS websitem and to me it sound like I am considered an employee. I have certain hours I have to work and he tells me how to do things. The second part of my question is that if I declared myself as a buisness as far as a EIN. im not sure on how to go about that maybe some info on that would help also. but if i did go ahead and do that would it hurt me in anyway other than costs of getting it. I have been thinking about it for awhile anyway just to buy from weaver.

Search online for EIN info for your state. Beware of websites which claim they can help you get one for a fee. You should be able to get the applications online at your State's website.

I believe a 1099 means you are a subcontractor and you are responsible for paying taxes on the monies earned. Get help from a tax pro like H&R block.

From now on save 1/3 of your "wage" for taxes, I think you are supposed to pay that quarterly but it's been a while since I've studied this stuff.

You can also get lots of help free from the small business administration and SCORE.

http://www.sba.gov/

http://www.score.org/

[KAYAK45]

The first question as to are you an employee is well spelled out in IRS literature. If your relationship is one where you are told when to work, where to work, are given tools and materials to do the tasks, you are an employee.

An independent contractor is only told to do a job and what the pay will be upon completion of the job.

.

One big difference has to do with who pays the social security tax. The Employer pays one half for the employee. The Independent Contractor pays all his/her own.

Another part is Workers Compensation. An employee, by law, is in many cases, required by law to be covered. The Contractor is not.

You have several questions to be answered as to your relationship with your EMPLOYER/CONTRACTOR!

Check with your state Department of Employment.

[cody1200]

Ok thank you for the information, i suppose i better have a talk.

[ELeBlanc]

Some practical points.

Ask the other people in the shop if they are paid as employees or as contractors. It could be either but it will let you know more of what the boss is thinking without directly confronting the boss.

He may treat you as a contractor during a "trial" period where he is deciding if your work is up to snuff.

As other people have said, contractors for a small business are generally cheaper because no vacation, no benefits, no security.

But I think telling him "well the IRS says I'm an employee" is a non-starter. He'll know the rules. Also its not as clear cut as others have stated. Even if you are given a place to work and all the tools you need and when to work, if they work is considered limited in duration then the boss could call you a contractor.

Also if he treats you as a contractor and you tell him that per the IRS website you think you are an employee he could tell you to see if the IRS has any openings cuz your services may no longer be required.

Ok thank you for the information, i suppose i better have a talk.

[cody1200]

Some practical points.

Ask the other people in the shop if they are paid as employees or as contractors. It could be either but it will let you know more of what the boss is thinking without directly confronting the boss.

He may treat you as a contractor during a "trial" period where he is deciding if your work is up to snuff.

As other people have said, contractors for a small business are generally cheaper because no vacation, no benefits, no security.

But I think telling him "well the IRS says I'm an employee" is a non-starter. He'll know the rules. Also its not as clear cut as others have stated. Even if you are given a place to work and all the tools you need and when to work, if they work is considered limited in duration then the boss could call you a contractor.

Also if he treats you as a contractor and you tell him that per the IRS website you think you are an employee he could tell you to see if the IRS has any openings cuz your services may no longer be required.

All of what you have said helps alot. It makes sence I dont wanna go up to him and start saying a bunch of stuff that sounds like Im trying to strong arm him or something. Ive been Working there for a couple years know. I started off hourly then was put on piece work. When that happend I no longer had taxes taken out. I might just stick around longer and keep getting the experiance. thank you for your thoughts.

[ELeBlanc]

So you added a couple of key facts in those two sentences - you used to be paid as an employee:

Further questions:

1) Were you getting vacation and benefits like health care when you were paid as an employee?

2) Did the owner switch everyone, almost everyone or just you?

3) How did he come up with an hourly rate when he switched you from employee to contractor?

All of what you have said helps alot. It makes sence I dont wanna go up to him and start saying a bunch of stuff that sounds like Im trying to strong arm him or something. Ive been Working there for a couple years know. I started off hourly then was put on piece work. When that happend I no longer had taxes taken out. I might just stick around longer and keep getting the experiance. thank you for your thoughts.

[cody1200]

So you added a couple of key facts in those two sentences - you used to be paid as an employee:

Further questions:

1) Were you getting vacation and benefits like health care when you were paid as an employee?

2) Did the owner switch everyone, almost everyone or just you?

3) How did he come up with an hourly rate when he switched you from employee to contractor?

1) No, I wasn't getting paid vactation or any benefits.

2) The main saddle maker was not paid hourly while I was being paid hourly. Myself and two other workers were switched from the hourly pay with taxes being withdrawn to being paid by the piece with no taxes taken out.

3) He basically wrote out the prices for the different pieces I was making and posted them up while no one was there in the shop.