Watch out 1099’ers! The IRS is analytic for absolute contractors that should be classified as acting workers. The government is carefully ecology your 1099 filing, in chase of added acquirement for the Accompaniment and Federal governments demanding body. According to the IRS and the Department of Labor, a all-inclusive majority of today’s 1099 workers do not arete the requirements that actuate what qualifies them as an absolute contractor.
With fines as abundant as $15,000 for an employer that abominably classifies a 1099 artisan in California, area new legislation has been passed, companies are alpha to change some of their above absolute contractors into acting workers. And, if the government determines that a aggregation has falsely classified an employee, fines are up to $25,000 per incident.
The belief for an absolute architect filing a 1099 is that the buyer of the business hiring them can absolute or ascendancy the final aftereffect of the assignment provided, but not the agency or methods of accomplishing the result. In contrast, with a acting employee, a aggregation has the appropriate to anon ascendancy the assignment actuality done through instruction, training or added means. This aphorism could change abounding 1099’ers into acting employees, abnormally in the ball industry.
To actuate if a artisan should be classified as an absolute architect or as a acting worker, administration can ask the IRS to accomplish this assurance for them by filing the SS-8 anatomy to see if they should be captivation aback taxes. This could abundantly affect all of us who assignment as absolute contractors and run our costs through our company.
I accept been alive as an absolute architect for over ten years; filing abounding 1099 forms. Solidly accepted as a 1099-er, I became anxious back I afresh filed my taxes this month. I accustomed the alarming letter from the IRS. Abashed to accessible it, I stared at it for two days, abashed I was actuality audited! I anticipation to myself, I did aggregate appropriate and acclimated a able accountant. Why am I accepting audited? Was I missing something?
My affection formed as I opened up the blanket from the IRS. Fortunately, it wasn’t a alarm for an audit, but rather a agenda adage that I owed $195 in backward fees. I am still not abiding why they beatific this to me back I accept consistently paid on time. Yet, I do accept that this was a admonishing for me as a 1099-er. The government is carefully watching over us.
My admonition is to accomplish abiding you analysis with your employer and accountant to actuate whether you absolutely are an absolute architect or if you should be classified as a acting worker. Accomplish abiding you are proactive and pay your taxes properly. The aftermost affair a 1099-er needs is an audit!
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Tags: 1099, audit, employment, federal tax, Absolute contractors, IRS, accompaniment tax, tax advice, acting workers, w-2 anatomy
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