Obamacare Going After 1099ers

[DarkFury]

But I am NOT an employer per law. I am a contractor with SUB contractors.

If your profit margin is such that you cannot increase your sub-contractors pay to offset their insurance expenses then you must do whatever is necessary to protect yourself and your business. Obamacare has forced many small businesses to close their doors, cut employee hours and make other adjustments. You will do whatever is in the best interest of yourself and your company.

He might start by figuring out which agency ostensibly bypassed him and sent his subcontractors letters instead...

No agency bypassed him. Do you not realize that these people are contractors themselves. For all intents and purposes these people are self-employed. The government looks to them.

As I said upthread, I work on 1099s myself. Tax forms go to my clients, who complete them and pass them along to me in January. I know of no instance where "ACHA or whatever it's called" (the fact that he doesn't even know what it's called should have been your first clue) sends the kind of letter he's describing directly to the subcontractor and not to the employer.

He's been asked several times to clarify, and he just keeps spinning his little fairy tale. That should be your second clue.

His goal is to prey on the sympathies of people gullible enough to believe "Obamacare forced me out of business!"

Exactly, I have worked 1099's for the past 15 years the tax forms go to the clients

So why would a contractor get a SUB contractors mail?
It goes to the SUB like any OTHER government document.

 

[guno]

If your profit margin is such that you cannot increase your sub-contractors pay to offset their insurance expenses then you must do whatever is necessary to protect yourself and your business. Obamacare has forced many small businesses to close their doors, cut employee hours and make other adjustments. You will do whatever is in the best interest of yourself and your company.

He might start by figuring out which agency ostensibly bypassed him and sent his subcontractors letters instead...

No agency bypassed him. Do you not realize that these people are contractors themselves. For all intents and purposes these people are self-employed. The government looks to them.

As I said upthread, I work on 1099s myself. Tax forms go to my clients, who complete them and pass them along to me in January. I know of no instance where "ACHA or whatever it's called" (the fact that he doesn't even know what it's called should have been your first clue) sends the kind of letter he's describing directly to the subcontractor and not to the employer.

He's been asked several times to clarify, and he just keeps spinning his little fairy tale. That should be your second clue.

His goal is to prey on the sympathies of people gullible enough to believe "Obamacare forced me out of business!"

Exactly, I have worked 1099's for the past 15 years the tax forms go to the clients

Of course Dark Fury issues the tax forms to the contractors but he does not withhold any taxes or Social Security nor does he pay the employers portion of their Social Security. The government will contact them - not Dark Fury if they fail to pay their taxes and make their Social Security deposits. More ignorance.

Have you every worked 1099 or are you just another no nothing?

I pay estimated quarterly taxes but don't get the final tax info until the clients send me the information they reported to the IRS. The IRS has no idea who my clients are until they receive that information at the end of the year from my clients .

 

[DarkFury]

He might start by figuring out which agency ostensibly bypassed him and sent his subcontractors letters instead...

No agency bypassed him. Do you not realize that these people are contractors themselves. For all intents and purposes these people are self-employed. The government looks to them.

As I said upthread, I work on 1099s myself. Tax forms go to my clients, who complete them and pass them along to me in January. I know of no instance where "ACHA or whatever it's called" (the fact that he doesn't even know what it's called should have been your first clue) sends the kind of letter he's describing directly to the subcontractor and not to the employer.

He's been asked several times to clarify, and he just keeps spinning his little fairy tale. That should be your second clue.

His goal is to prey on the sympathies of people gullible enough to believe "Obamacare forced me out of business!"

Exactly, I have worked 1099's for the past 15 years the tax forms go to the clients

Of course Dark Fury issues the tax forms to the contractors but he does not withhold any taxes or Social Security nor does he pay the employers portion of their Social Security. The government will contact them - not Dark Fury if they fail to pay their taxes and make their Social Security deposits. More ignorance.

Have you every worked 1099 or are you just another no nothing?

I pay estimated quarterly taxes but don't get the final tax info until the clients send me the information they reported to the IRS. The IRS has no idea who my clients are until they receive that information at the end of the year from my clients .

The 1099 AND 1040 are company generated form that government ACCEPTS as proof of income. They are NOT government generated forms. NO job NO form.

 

[eagle1462010]

What does the Affordable Care Act have to do with independent contractors? - Lexology

The ACA incorporates the ERISA definition of an “employee” as “any individual employed by an employer.” (29 U.S.C. § 1002(6)). However, this doesn’t clearly define the term “employee” for compliance purposes. Final regulations refer to the common law “employee” definition of “right to control.” (26 C.F.R. § 54.4980H-1(a)(7).) The common law “employee” definition determines whether a worker is an “employee” or “independent contractor” based on whether the agency has the “right to control and direct the worker in the way of when, where, how and what work is performed.”

To help determine whether a worker is an employee under the common law rules, the IRS has identified 20 factors that may indicate whether the employer can exercise enough control to establish an employer-employee relationship. These factors, set forth in Revenue Ruling 87-41, were based on the circumstances that courts have identified and relied upon to assess whether an employment relationship exists. Not all of the factors must be present to find an employee/employment relationship, but the factors are guidelines used to assess whether an individual is an employee or an independent contractor. An employer must weigh the following:



Is the worker required to comply with instructions on where, how and when the work is to be done? Is the worker provided training to perform the job in a particular manner? Are the services performed an integral part of the organization’s operations? Must the services be rendered personally? Does the business hire, supervise and pay assistants to help the worker on the job? Is there a continuing relationship between the worker and the business? Does the organization set the work schedule? Is the worker required to devote his/her full time to the organization? Is the work performed at the company’s place of business or at specific places designated by the company? Does the organization direct the sequence in which work is performed? Are oral or written reports required to be submitted? Are payments to the worker made by the hour, week or month? Are travel and lodging expenses reimbursed? Does the organization furnish tools and materials? Does the worker have an investment in the equipment or facilities? Does the worker stand to realize a profit or loss as a result of the work? Does the worker work exclusively for the organization? Does the worker work predominantly for the organization or are services available to the general public? Can the worker be discharged for reason other than nonperformance of contract provision? Can the worker terminate the relationship without liability?



There are significant consequences which could follow if agencies misclassify a worker as an independent contractor who in fact is an employee. If an independent contractor is misclassified, the agency must, among other things, withhold state and federal income taxes, enroll him/her as a CalPERS member when the worker meets eligibility requirements and provide workers’ compensation insurance coverage. It would also be responsible for offering the employee (and his or her dependents) health insurance to avoid penalties if the employee is considered full-time under the ACA. Indeed, as of January 1, 2015, employers with 50 or more full-time or full-time equivalent employees will have to offer affordable healthcare insurance to at least 70% of their full-time workforce or face fines.

Moreover, if an IRS audit reveals that an employer has misclassified its independent contractors and reclassifies those workers as W-2 employees, the employer could be subject to fines for failing to offer healthcare coverage. That fine is $2,000 per year multiplied by the number of full-time employees (less 30, or less 80 during 2015 only) if the large employer is not offering coverage to substantially all (95%, or 70% during 2015 only) of its full-time employees and their dependents. If the large employer does offer coverage, but this coverage doesn’t meet ACA standards for minimum value and affordability, the employer could be required to pay a fine of $3,000 for each employee who receives coverage through Covered California and obtains a government subsidy. On the other hand, if the worker is truly an independent contractor, the worker will not trigger a potential penalty and will not be considered full-time for any IRS penalty determination. Independent contractors are obligated to make arrangements to pay their own taxes and to provide their own benefits.


Does this apply to your situation?

If so, under the new laws are you misclassifying your workers and are no longer able to simply call them sub contractors................If this is what you are addressing, then what I recommend is to see a CPA that is worth his salt and explain the situation............If you are being called out for misclassification of 1099
s under the new ruling this would be the 1st step..............

If this is the real deal then find a Temp agency to hire them through if they don't sink your budget to avoid being slammed under the ACA new rules...........

Am I close to the mark?

 

[Indeependent]

No agency bypassed him. Do you not realize that these people are contractors themselves. For all intents and purposes these people are self-employed. The government looks to them.

As I said upthread, I work on 1099s myself. Tax forms go to my clients, who complete them and pass them along to me in January. I know of no instance where "ACHA or whatever it's called" (the fact that he doesn't even know what it's called should have been your first clue) sends the kind of letter he's describing directly to the subcontractor and not to the employer.

He's been asked several times to clarify, and he just keeps spinning his little fairy tale. That should be your second clue.

His goal is to prey on the sympathies of people gullible enough to believe "Obamacare forced me out of business!"

Exactly, I have worked 1099's for the past 15 years the tax forms go to the clients

Of course Dark Fury issues the tax forms to the contractors but he does not withhold any taxes or Social Security nor does he pay the employers portion of their Social Security. The government will contact them - not Dark Fury if they fail to pay their taxes and make their Social Security deposits. More ignorance.

Have you every worked 1099 or are you just another no nothing?

I pay estimated quarterly taxes but don't get the final tax info until the clients send me the information they reported to the IRS. The IRS has no idea who my clients are until they receive that information at the end of the year from my clients .

The 1099 AND 1040 are company generated form that government ACCEPTS as proof of income. They are NOT government generated forms. NO job NO form.

Is there a phone number on the forms and did you Google the number to ensure the letters legit?

 

[DarkFury]

As I said upthread, I work on 1099s myself. Tax forms go to my clients, who complete them and pass them along to me in January. I know of no instance where "ACHA or whatever it's called" (the fact that he doesn't even know what it's called should have been your first clue) sends the kind of letter he's describing directly to the subcontractor and not to the employer.

He's been asked several times to clarify, and he just keeps spinning his little fairy tale. That should be your second clue.

His goal is to prey on the sympathies of people gullible enough to believe "Obamacare forced me out of business!"

Exactly, I have worked 1099's for the past 15 years the tax forms go to the clients

Of course Dark Fury issues the tax forms to the contractors but he does not withhold any taxes or Social Security nor does he pay the employers portion of their Social Security. The government will contact them - not Dark Fury if they fail to pay their taxes and make their Social Security deposits. More ignorance.

Have you every worked 1099 or are you just another no nothing?

I pay estimated quarterly taxes but don't get the final tax info until the clients send me the information they reported to the IRS. The IRS has no idea who my clients are until they receive that information at the end of the year from my clients .

The 1099 AND 1040 are company generated form that government ACCEPTS as proof of income. They are NOT government generated forms. NO job NO form.

Is there a phone number on the forms and did you Google the number to ensure the letters legit?

I would assume there are but as they were not mailed to me I don't have them in front of me.

Plus it goes back to the issue of who is responsible for what? I'm just trying to help them, the end result is I close a "hobby" that makes some money.

 

[DarkFury]

What does the Affordable Care Act have to do with independent contractors? - Lexology

The ACA incorporates the ERISA definition of an “employee” as “any individual employed by an employer.” (29 U.S.C. § 1002(6)). However, this doesn’t clearly define the term “employee” for compliance purposes. Final regulations refer to the common law “employee” definition of “right to control.” (26 C.F.R. § 54.4980H-1(a)(7).) The common law “employee” definition determines whether a worker is an “employee” or “independent contractor” based on whether the agency has the “right to control and direct the worker in the way of when, where, how and what work is performed.”

To help determine whether a worker is an employee under the common law rules, the IRS has identified 20 factors that may indicate whether the employer can exercise enough control to establish an employer-employee relationship. These factors, set forth in Revenue Ruling 87-41, were based on the circumstances that courts have identified and relied upon to assess whether an employment relationship exists. Not all of the factors must be present to find an employee/employment relationship, but the factors are guidelines used to assess whether an individual is an employee or an independent contractor. An employer must weigh the following:



Is the worker required to comply with instructions on where, how and when the work is to be done? Is the worker provided training to perform the job in a particular manner? Are the services performed an integral part of the organization’s operations? Must the services be rendered personally? Does the business hire, supervise and pay assistants to help the worker on the job? Is there a continuing relationship between the worker and the business? Does the organization set the work schedule? Is the worker required to devote his/her full time to the organization? Is the work performed at the company’s place of business or at specific places designated by the company? Does the organization direct the sequence in which work is performed? Are oral or written reports required to be submitted? Are payments to the worker made by the hour, week or month? Are travel and lodging expenses reimbursed? Does the organization furnish tools and materials? Does the worker have an investment in the equipment or facilities? Does the worker stand to realize a profit or loss as a result of the work? Does the worker work exclusively for the organization? Does the worker work predominantly for the organization or are services available to the general public? Can the worker be discharged for reason other than nonperformance of contract provision? Can the worker terminate the relationship without liability?



There are significant consequences which could follow if agencies misclassify a worker as an independent contractor who in fact is an employee. If an independent contractor is misclassified, the agency must, among other things, withhold state and federal income taxes, enroll him/her as a CalPERS member when the worker meets eligibility requirements and provide workers’ compensation insurance coverage. It would also be responsible for offering the employee (and his or her dependents) health insurance to avoid penalties if the employee is considered full-time under the ACA. Indeed, as of January 1, 2015, employers with 50 or more full-time or full-time equivalent employees will have to offer affordable healthcare insurance to at least 70% of their full-time workforce or face fines.

Moreover, if an IRS audit reveals that an employer has misclassified its independent contractors and reclassifies those workers as W-2 employees, the employer could be subject to fines for failing to offer healthcare coverage. That fine is $2,000 per year multiplied by the number of full-time employees (less 30, or less 80 during 2015 only) if the large employer is not offering coverage to substantially all (95%, or 70% during 2015 only) of its full-time employees and their dependents. If the large employer does offer coverage, but this coverage doesn’t meet ACA standards for minimum value and affordability, the employer could be required to pay a fine of $3,000 for each employee who receives coverage through Covered California and obtains a government subsidy. On the other hand, if the worker is truly an independent contractor, the worker will not trigger a potential penalty and will not be considered full-time for any IRS penalty determination. Independent contractors are obligated to make arrangements to pay their own taxes and to provide their own benefits.


Does this apply to your situation?

If so, under the new laws are you misclassifying your workers and are no longer able to simply call them sub contractors................If this is what you are addressing, then what I recommend is to see a CPA that is worth his salt and explain the situation............If you are being called out for misclassification of 1099
s under the new ruling this would be the 1st step..............

If this is the real deal then find a Temp agency to hire them through if they don't sink your budget to avoid being slammed under the ACA new rules...........

Am I close to the mark?

You know a temp service may work. I will look into it.

 

[eagle1462010]

Tax Basics: What You Need to Know about Form W-9

FYI Are they filling out a W-9 when you hire them?

 

[DarkFury]

Tax Basics: What You Need to Know about Form W-9

FYI Are they filling out a W-9 when you hire them?

Not sure. I may look into selling it to them with me backing the loan for them to buy it. Then they could run as "gypsy" contractors.

 

[the_human_being]

He might start by figuring out which agency ostensibly bypassed him and sent his subcontractors letters instead...

No agency bypassed him. Do you not realize that these people are contractors themselves. For all intents and purposes these people are self-employed. The government looks to them.

As I said upthread, I work on 1099s myself. Tax forms go to my clients, who complete them and pass them along to me in January. I know of no instance where "ACHA or whatever it's called" (the fact that he doesn't even know what it's called should have been your first clue) sends the kind of letter he's describing directly to the subcontractor and not to the employer.

He's been asked several times to clarify, and he just keeps spinning his little fairy tale. That should be your second clue.

His goal is to prey on the sympathies of people gullible enough to believe "Obamacare forced me out of business!"

Exactly, I have worked 1099's for the past 15 years the tax forms go to the clients

Of course Dark Fury issues the tax forms to the contractors but he does not withhold any taxes or Social Security nor does he pay the employers portion of their Social Security. The government will contact them - not Dark Fury if they fail to pay their taxes and make their Social Security deposits. More ignorance.

Have you every worked 1099 or are you just another no nothing?

I pay estimated quarterly taxes but don't get the final tax info until the clients send me the information they reported to the IRS. The IRS has no idea who my clients are until they receive that information at the end of the year from my clients .

I just happen to own a corporation engaged in electrical engineering and construction. Self-employed contractors pay quarterly income taxes. Look it up. It's the law. Self -employed contractors must pay both the employee's share and the employer's share of Social Security withholding. Look it up. It's the law.

 

[the_human_being]

He might start by figuring out which agency ostensibly bypassed him and sent his subcontractors letters instead...

No agency bypassed him. Do you not realize that these people are contractors themselves. For all intents and purposes these people are self-employed. The government looks to them.

As I said upthread, I work on 1099s myself. Tax forms go to my clients, who complete them and pass them along to me in January. I know of no instance where "ACHA or whatever it's called" (the fact that he doesn't even know what it's called should have been your first clue) sends the kind of letter he's describing directly to the subcontractor and not to the employer.

He's been asked several times to clarify, and he just keeps spinning his little fairy tale. That should be your second clue.

His goal is to prey on the sympathies of people gullible enough to believe "Obamacare forced me out of business!"

Exactly, I have worked 1099's for the past 15 years the tax forms go to the clients

Of course Dark Fury issues the tax forms to the contractors but he does not withhold any taxes or Social Security nor does he pay the employers portion of their Social Security. The government will contact them - not Dark Fury if they fail to pay their taxes and make their Social Security deposits. More ignorance.

Have you every worked 1099 or are you just another no nothing?

I pay estimated quarterly taxes but don't get the final tax info until the clients send me the information they reported to the IRS. The IRS has no idea who my clients are until they receive that information at the end of the year from my clients .

Come on fool. How in the hell would the IRS know who to credit with the quarterly taxes they pay in? You are nuts.

 

[eagle1462010]

Tax Basics: What You Need to Know about Form W-9

FYI Are they filling out a W-9 when you hire them?

Not sure. I may look into selling it to them with me backing the loan for them to buy it. Then they could run as "gypsy" contractors.

Okay. Are they working under the table.................

To file the proper 1099 you must have a TIN number, and your State and Federal I.d. number to properly submit the 1099 to the Gov't................You can have them fill out the form and submit it to get the TIN...............

I'm no expert on it, but I've worked under 1099's through temp way back in the past. Had to fill out the paperwork which would include a W9.

Find a CPA, worth his salt, and pay a little to find the best options............

 

[DarkFury]

Tax Basics: What You Need to Know about Form W-9

FYI Are they filling out a W-9 when you hire them?

Not sure. I may look into selling it to them with me backing the loan for them to buy it. Then they could run as "gypsy" contractors.

Okay. Are they working under the table.................

To file the proper 1099 you must have a TIN number, and your State and Federal I.d. number to properly submit the 1099 to the Gov't................You can have them fill out the form and submit it to get the TIN...............

I'm no expert on it, but I've worked under 1099's through temp way back in the past. Had to fill out the paperwork which would include a W9.

Find a CPA, worth his salt, and pay a little to find the best options............

No they are not working under the table because I need to deduct costs and they are a cost. About the second week of January I get forms from the book keeper. One goes to them and two to me. One for the IRS and one for my files.

 

[eagle1462010]

Tax Basics: What You Need to Know about Form W-9

FYI Are they filling out a W-9 when you hire them?

Not sure. I may look into selling it to them with me backing the loan for them to buy it. Then they could run as "gypsy" contractors.

Okay. Are they working under the table.................

To file the proper 1099 you must have a TIN number, and your State and Federal I.d. number to properly submit the 1099 to the Gov't................You can have them fill out the form and submit it to get the TIN...............

I'm no expert on it, but I've worked under 1099's through temp way back in the past. Had to fill out the paperwork which would include a W9.

Find a CPA, worth his salt, and pay a little to find the best options............

No they are not working under the table because I need to deduct costs and they are a cost. About the second week of January I get forms from the book keeper. One goes to them and two to me. One for the IRS and one for my files.

Then the book keeper is getting them their TIN's then........................

Under that, you are not responsible for the ACA requirements...........They by working under a 1099 must get their own insurance or pay the fine...................They must also pay their taxes as well................

I don't see the problem then?

 

[eagle1462010]

I would still go see the CPA and see if any of the new rules would affect you.

 

[The Professor]

Lots of companies abuse employees by calling them independent contractors when they do not fit the definition.

I wonder...

Here is a great link from the IRS that explains the difference between an independent contractor and an employee. If any worker believes his employment relationship has been improperly classified by his employer, he/she can file a Form SS-8 with the IRS who will make a final determination regarding whether the worker is in fact an independent contractor or an employee.

Independent Contractor (Self-Employed) or Employee?

 

[DarkFury]

Tax Basics: What You Need to Know about Form W-9

FYI Are they filling out a W-9 when you hire them?

Not sure. I may look into selling it to them with me backing the loan for them to buy it. Then they could run as "gypsy" contractors.

Okay. Are they working under the table.................

To file the proper 1099 you must have a TIN number, and your State and Federal I.d. number to properly submit the 1099 to the Gov't................You can have them fill out the form and submit it to get the TIN...............

I'm no expert on it, but I've worked under 1099's through temp way back in the past. Had to fill out the paperwork which would include a W9.

Find a CPA, worth his salt, and pay a little to find the best options............

No they are not working under the table because I need to deduct costs and they are a cost. About the second week of January I get forms from the book keeper. One goes to them and two to me. One for the IRS and one for my files.

Then the book keeper is getting them their TIN's then........................

Under that, you are not responsible for the ACA requirements...........They by working under a 1099 must get their own insurance or pay the fine...................They must also pay their taxes as well................

I don't see the problem then?

The problem is I NOR they can take the added 4,800 dollars a year in costs. And that is the cheapest one. So since government has mandated it they and I are stuck. Its not a big operation.

Without dipping into MY savings which came from my working the profit is no longer viable.

Bonding is not going down its going up. Material is not going down its going up. And while both are valid tax deductions at the END of the year they do nothing for the month to month.

But now the SUB contractors are feeling the pinch of ACHA or Obamacare and they can't make it up. There is just no room for the little guy.

And the plan levels for them are not much to speak of once you look at the co-pay as well. In some cases their amount they have to spend BEFORE its "free" is equal to what they pay for it in an entire YEAR.

Me I have Medicare so I'm covered. But to those starting out or over its a slaughter. I could shut down tomorrow and really not be out anything. But this "mandate" is going to destroy them.

 

[Arianrhod]

The problem is I NOR they can take the added 4,800 dollars a year in costs. And that is the cheapest one.

Is that premiums alone or premiums plus deductible?

 

[ABikerSailor]

I have a question for the OP...................what state do you live in, and did the governor of your state accept or refuse the Medicaid expansion?

If you live in a state that refused, then the problem isn't the ACA, it's your governors desire to stop it, because if they accepted the Medicaid expansion, the price of insurance actually goes down.

I live in Arizona and have no idea what the Gov. did. I'm the guy who hires the 25 year old non grad looking to get a skill. I'm the guy who hires the first time offender looking to turn his life around. I'm the guy who hires the vet.

I'm NOT some big time contractor just a little guy trying to do what I can.

You can blame the governor for refusing to accept the Medicare expansion. AZ is a Republican governed state, and all GOP led states have refused the expansion.

That's why the costs have gone up.

 

[DarkFury]

The problem is I NOR they can take the added 4,800 dollars a year in costs. And that is the cheapest one.

Is that premiums alone or premiums plus deductible?

For the person 400 for the premium alone. For another its 700.
He has kids.