Holy Friggin' Cow!!!!!!!!!!!

[Granny]

My accountant just called me with the damages ... $4,247.00 in taxes due!!! And my hourly rate was $9 for about 90% of the 2015 tax year!! No damned wonder I'm so exhausted and out on leave trying to get myself back together. That's just federal/FICA - thank God TN doesn't have income tax.

 

[g5000]

Did you not withhold any taxes?

 

[Granny]

Had to file 1099 - independent contractor. Very common to home healthcare workers. Cases went to US Supreme Court, new Labor rules, regs. have been issued and my boss has decided not to fight the fight anymore. I jumped on the W-2 bandwagon as soon as we were told they would now hire us as employees. That move alone will reduce my taxes about 7-1/2%. As an independent contractor I had to file as an employer (of a non-existent business) and pay FICA taxes for my one employee (me). As an employee (of my non-existent business) I had to pay the matching employee FICA taxes. Total: approximately 15% in FICA taxes. I'd rather have the taxes go out on a paycheck to paycheck basis.

 

[beagle9]

My accountant just called me with the damages ... $4,247.00 in taxes due!!! And my hourly rate was $9 for about 90% of the 2015 tax year!! No damned wonder I'm so exhausted and out on leave trying to get myself back together. That's just federal/FICA - thank God TN doesn't have income tax.

. $9.00 dollars an hour for through out the year of 2015 you say? So where do you get $4,247.00 dollars ?

 

[g5000]

Had to file 1099 - independent contractor. Very common to home healthcare workers. Cases went to US Supreme Court, new Labor rules, regs. have been issued and my boss has decided not to fight the fight anymore. I jumped on the W-2 bandwagon as soon as we were told they would now hire us as employees. That move alone will reduce my taxes about 7-1/2%. As an independent contractor I had to file as an employer (of a non-existent business) and pay FICA taxes for my one employee (me). As an employee (of my non-existent business) I had to pay the matching employee FICA taxes. Total: approximately 15% in FICA taxes. I'd rather have the taxes go out on a paycheck to paycheck basis.

Even for a home healthcare worker, 9 bucks an hour is too low. The one I hired in 2008 charged 10 bucks an hour.

 

[Granny]

My accountant just called me with the damages ... $4,247.00 in taxes due!!! And my hourly rate was $9 for about 90% of the 2015 tax year!! No damned wonder I'm so exhausted and out on leave trying to get myself back together. That's just federal/FICA - thank God TN doesn't have income tax.

. $9.00 dollars an hour for through out the year of 2015 you say? So where do you get $4,247.00 dollars ?

I think it's basically the difference between business and individual taxes. But, hell, I made something over $22,000 last year, so that will tell you how many hours I was putting in.

 

[depotoo]

Since you were independent did you write off mileage, supplies, uniforms, portion of phone, car, mortgage, sales tax, etc?
Unfortunately, many accountants aren't worth their pay these days.

My accountant just called me with the damages ... $4,247.00 in taxes due!!! And my hourly rate was $9 for about 90% of the 2015 tax year!! No damned wonder I'm so exhausted and out on leave trying to get myself back together. That's just federal/FICA - thank God TN doesn't have income tax.

 

[Luddly Neddite]

$22K ad more than $4K owed? That's just astounding. You really need a good tax accountant now and the one you are using should have told you this a year ago.

Ideally, you should neither owe or be owed and with planning, that's not hard to accomplish.

And I agree with the above - take every deduction you can put your hands on and, needless to say, keep every receipt.

 

[Iceweasel]

Had to file 1099 - independent contractor. Very common to home healthcare workers. Cases went to US Supreme Court, new Labor rules, regs. have been issued and my boss has decided not to fight the fight anymore. I jumped on the W-2 bandwagon as soon as we were told they would now hire us as employees. That move alone will reduce my taxes about 7-1/2%. As an independent contractor I had to file as an employer (of a non-existent business) and pay FICA taxes for my one employee (me). As an employee (of my non-existent business) I had to pay the matching employee FICA taxes. Total: approximately 15% in FICA taxes. I'd rather have the taxes go out on a paycheck to paycheck basis.

You were getting hosed. You could get his butt in hot water if you were in reality an employee. No way $9/hr will cover your costs to be in business. You could probably collect if you hauled him in front of a judge. Unless he files bankruptcy. If he did that here Labor & Industries would use him for a door mat.

 

[Granny]

Had to file 1099 - independent contractor. Very common to home healthcare workers. Cases went to US Supreme Court, new Labor rules, regs. have been issued and my boss has decided not to fight the fight anymore. I jumped on the W-2 bandwagon as soon as we were told they would now hire us as employees. That move alone will reduce my taxes about 7-1/2%. As an independent contractor I had to file as an employer (of a non-existent business) and pay FICA taxes for my one employee (me). As an employee (of my non-existent business) I had to pay the matching employee FICA taxes. Total: approximately 15% in FICA taxes. I'd rather have the taxes go out on a paycheck to paycheck basis.

Even for a home healthcare worker, 9 bucks an hour is too low. The one I hired in 2008 charged 10 bucks an hour.

Well, I started getting $10 an hour after my co-worker raised holy hell, but that was only the last few months of the year. Don't know what my rate will be when I decide to go back to work. It's hard work. The job description provides for "light housekeeping" but I started with her on her 100th birthday and her house was in desperate need of serious cleaning just for her general health. I cleaned that place from ceiling to floor in most every room and the kitchen - well, I resorted to pure ammonia and scrubbed the kitchen from ceiling to floor. And the dust!!!! She got 3 home cooked meals a day, either bed baths or tub baths (no easy feat) - her skin was in horrible condition when we started but we got that in great shape, she always had clean sheets and clothes; and there's her physical care - always on the lookout for anything, anywhere that could be a fall risk, personal time spent with her, taking her out for fresh air and sun. It's just physically, mentally and emotionally hard. It became even harder as she started to decline, and with each decline came changes in care structure. She just died in January - 4 months shy of her 102nd birthday. I was with her when she died (even though it was my day off). I just loved her - I kissed her goodbye and told her from now on it was all beautiful colors, rainbows and things she couldn't imagine and it was all good. (She had been a very talented artist in her day and could still see the colors coming off the little crystals she had in her window.) And then I cried and came home and cried a little more. I truly was in desperate need for some rest.

 

[Granny]

Had to file 1099 - independent contractor. Very common to home healthcare workers. Cases went to US Supreme Court, new Labor rules, regs. have been issued and my boss has decided not to fight the fight anymore. I jumped on the W-2 bandwagon as soon as we were told they would now hire us as employees. That move alone will reduce my taxes about 7-1/2%. As an independent contractor I had to file as an employer (of a non-existent business) and pay FICA taxes for my one employee (me). As an employee (of my non-existent business) I had to pay the matching employee FICA taxes. Total: approximately 15% in FICA taxes. I'd rather have the taxes go out on a paycheck to paycheck basis.

You were getting hosed. You could get his butt in hot water if you were in reality an employee. No way $9/hr will cover your costs to be in business. You could probably collect if you hauled him in front of a judge. Unless he files bankruptcy. If he did that here Labor & Industries would use him for a door mat.

I tried to do a double quote/reply but obviously screwed that up. Ludley also had a good post. I didn't have a business, so no business expenses. Didn't have a home office, use my phone for business purposes, no business cards - nothing. I suppose I could have claimed mileage but at roughly 9 miles round trip from my place to my lady's place - shit - not worth my time in keeping track of it. True, I had the option to do quarterly payments but it's risky if someone dies or there's a reassignment of jobs and you don't make enough to keep up those quarterly payments as they should be.

I have a good accountant - worked for her and her dad as a tax season temp when I first moved out here - they told me I would have fee free accounting since they considered me "an employee" even though I was on a temp agency payroll. Her dad was a retired IRS auditor and they followed current IRS rules and regs. very strictly. So, no hosing there. Having people working as independent contractors is not illegal, so no grounds for suit. What happened is that a year or so ago, DOL changed the classification of home healthcare workers so that we weren't in the same class as teen aged babysitters - who definitely don't have a boatload of "employment benefits." That classification change created a firestorm for agencies, some unions of some kind, and independents as well as employees. Several lawsuits were filed, some went to the Supreme Court and DOL has issued new rules and regs. Some agencies may still keep the independent contractor stance for awhile, but the one I've been with has decided not to fight the issue anymore - and have taken some great steps that will be beneficial to all of us. There is also a difference between "privates" (a friend of a friend type situation) and "agency" workers. My advice would be "bite the bullet and pay the agency."

 

[ZackB]

You friggin' moron! You need to plan better than THAT!

 

[Granny]

I wouldn't call myself a moron. It's a very fluid industry - feast or famine all the way around. I'd be a moron if I obligated myself to something and then didn't have the income to meet the obligation. My anticipated leave of absence is stretching out longer than I expected, but I know what my monthly obligations are, banked a lot of my full paychecks and I've got money to pay the taxes as well as extend my leave and cover my living expenses a little longer if necessary. This year will be a whole different story - as of January 1st I was on W-2 filing status - even if January 1st was the last day I worked before my assignment ended. My little lady died the day before I was to be back on duty.

 

[Iceweasel]

Had to file 1099 - independent contractor. Very common to home healthcare workers. Cases went to US Supreme Court, new Labor rules, regs. have been issued and my boss has decided not to fight the fight anymore. I jumped on the W-2 bandwagon as soon as we were told they would now hire us as employees. That move alone will reduce my taxes about 7-1/2%. As an independent contractor I had to file as an employer (of a non-existent business) and pay FICA taxes for my one employee (me). As an employee (of my non-existent business) I had to pay the matching employee FICA taxes. Total: approximately 15% in FICA taxes. I'd rather have the taxes go out on a paycheck to paycheck basis.

You were getting hosed. You could get his butt in hot water if you were in reality an employee. No way $9/hr will cover your costs to be in business. You could probably collect if you hauled him in front of a judge. Unless he files bankruptcy. If he did that here Labor & Industries would use him for a door mat.

I tried to do a double quote/reply but obviously screwed that up. Ludley also had a good post. I didn't have a business, so no business expenses. Didn't have a home office, use my phone for business purposes, no business cards - nothing. I suppose I could have claimed mileage but at roughly 9 miles round trip from my place to my lady's place - shit - not worth my time in keeping track of it. True, I had the option to do quarterly payments but it's risky if someone dies or there's a reassignment of jobs and you don't make enough to keep up those quarterly payments as they should be.

I have a good accountant - worked for her and her dad as a tax season temp when I first moved out here - they told me I would have fee free accounting since they considered me "an employee" even though I was on a temp agency payroll. Her dad was a retired IRS auditor and they followed current IRS rules and regs. very strictly. So, no hosing there. Having people working as independent contractors is not illegal, so no grounds for suit. What happened is that a year or so ago, DOL changed the classification of home healthcare workers so that we weren't in the same class as teen aged babysitters - who definitely don't have a boatload of "employment benefits." That classification change created a firestorm for agencies, some unions of some kind, and independents as well as employees. Several lawsuits were filed, some went to the Supreme Court and DOL has issued new rules and regs. Some agencies may still keep the independent contractor stance for awhile, but the one I've been with has decided not to fight the issue anymore - and have taken some great steps that will be beneficial to all of us. There is also a difference between "privates" (a friend of a friend type situation) and "agency" workers. My advice would be "bite the bullet and pay the agency."

If you were filing a 1099 form the yes, you did have a business. You may not see it that way but the government does. If you aren't on someone's payroll and are making money you are a business. You pay all of your Social Security taxes, health insurance, et.c You should be licensed with the state too, unless they are very lax about it.

Quarterly payments on estimated income isn't optional unless you aren't making enough to pay federal income tax. But the point is you were getting screwed big time by getting stuck with all the downsides of being a business and none of the benefits. And all of the downsides of being an employees with none of the benefits. That's why it isn't legal.

Your accounting services were free because it benefited them. Having worked for the IRS means zip, not every IRS employees knows all the tax laws! I'm a contractor and treating a 1099 as an employee is illegal and has been for some time. You were sold a bill of goods.

Subcontracting isn't illegal, I didn't say so. But a subcontractor sets their own prices and terms, not who hires them.

 

[ZackB]

The old bat probably got slaughtered by the self-employment tax. If this is her main income and she does it regularly she should form an LLC, make herself an employee of the LLC, then let the LLC contract for work. At least then she could avoid the self-employment tax. Of course, you have got to pay yourself and withhold and match SS and Medicare contributions. So if she only makes squat then it probably is not worth it, but it could be.

 

[Granny]

Of course I had a business for IRS purposes ... but for their purposes only. I was in compliance with the law (and so was the business I was contracted with). There are things that people in my position cannot do under the law and we were constantly reminded of that. People in my position do not need to be licensed because we are not medical professionals. As an example, something as simple as removing pills from a prescription bottle is something we cannot do - either a family member or my boss (who IS a licensed nurse) has to remove the pills from the bottle and put them in a weekly med strip from which we can then take the daily meds and give to the person we are caring for. If the pills are nothing more than an OTC vitamin pill that's not a problem. Sometimes all a particular assignment requires is that we visit someone a couple hours once a week and keep them company while their regular caregivers (generally their child and his or her spouse) can just get out long enough to maybe take in a movie or dinner - and believe me when those people are the 24/7 caregivers for their parent that little bit of time alone together is precious and well-deserved. We don't need a license to do that.

I'm still with the same agency, BUT they are now moving on in compliance with NEW regulations - and I'm happy about that. I won't have to worry or plan for tax purposes - it will be W-2 and I'll be paying in just like any other W-2 employee. It just happened I had twice as much income as I did the year before. I just attended a meeting along with other workers to get familiar with a new educational program - some 480+ courses (in compliance with law). Some courses will be elective and some will be mandatory and for some we can get certifications. I look forward to it as an opportunity to LEARN. This is a relatively new area for me - my experience is in the legal arena as a professional legal secretary (a now dying breed - there's a big difference in the old, seasoned professional legal secretaries and what's out there today). I'm retired - I don't need all that stress anymore - but I do need to work and what I do now is a perfect situation for me.

So, Iceweasel, if you don't live in my state and don't work in this industry, please don't imply that I'm a moron and acting outside the law. Otherwise ... XO

 

[Granny]

The old bat probably got slaughtered by the self-employment tax. If this is her main income and she does it regularly she should form an LLC, make herself an employee of the LLC, then let the LLC contract for work. At least then she could avoid the self-employment tax. Of course, you have got to pay yourself and withhold and match SS and Medicare contributions. So if she only makes squat then it probably is not worth it, but it could be.

Sweetie ... I may be an old bat ... but I'm a damned good old bat, much loved by my children, I still have a sense of humor, have only about $150 of credit card debt, own everything I do have outright, not too bad looking for my age and generally in pretty good shape.

 

[ZackB]

The old bat probably got slaughtered by the self-employment tax. If this is her main income and she does it regularly she should form an LLC, make herself an employee of the LLC, then let the LLC contract for work. At least then she could avoid the self-employment tax. Of course, you have got to pay yourself and withhold and match SS and Medicare contributions. So if she only makes squat then it probably is not worth it, but it could be.

Sweetie ... I may be an old bat ... but I'm a damned good old bat, much loved by my children, I still have a sense of humor, have only about $150 of credit card debt, own everything I do have outright, not too bad looking for my age and generally in pretty good shape.

I am sure you are all those things - A spitting image of Angelina Jolie possessing the economic brilliance of Adam Smith and the common sense of Ben Franklin!

 

[Iceweasel]

Of course I had a business for IRS purposes ... but for their purposes only. I was in compliance with the law (and so was the business I was contracted with). There are things that people in my position cannot do under the law and we were constantly reminded of that. People in my position do not need to be licensed because we are not medical professionals. As an example, something as simple as removing pills from a prescription bottle is something we cannot do - either a family member or my boss (who IS a licensed nurse) has to remove the pills from the bottle and put them in a weekly med strip from which we can then take the daily meds and give to the person we are caring for. If the pills are nothing more than an OTC vitamin pill that's not a problem. Sometimes all a particular assignment requires is that we visit someone a couple hours once a week and keep them company while their regular caregivers (generally their child and his or her spouse) can just get out long enough to maybe take in a movie or dinner - and believe me when those people are the 24/7 caregivers for their parent that little bit of time alone together is precious and well-deserved. We don't need a license to do that.

I'm still with the same agency, BUT they are now moving on in compliance with NEW regulations - and I'm happy about that. I won't have to worry or plan for tax purposes - it will be W-2 and I'll be paying in just like any other W-2 employee. It just happened I had twice as much income as I did the year before. I just attended a meeting along with other workers to get familiar with a new educational program - some 480+ courses (in compliance with law). Some courses will be elective and some will be mandatory and for some we can get certifications. I look forward to it as an opportunity to LEARN. This is a relatively new area for me - my experience is in the legal arena as a professional legal secretary (a now dying breed - there's a big difference in the old, seasoned professional legal secretaries and what's out there today). I'm retired - I don't need all that stress anymore - but I do need to work and what I do now is a perfect situation for me.

So, Iceweasel, if you don't live in my state and don't work in this industry, please don't imply that I'm a moron and acting outside the law. Otherwise ... XO

I didn't say or imply you're a moron but now you have me wondering. I was on your side in this. Which state doesn't require any license to operate a business? How does the state tax you? I file quarterly here.

You're implying you can do business in a state without paying any state tax, I'm not buying it. 1099 laws have been on the books for a while, what's new is government cracking down on it.

I also am very skeptical that no license is required to feed, clothe, handle, lift up and move 100 year old people. How could someone be sued if they fucked up? "Oh, your honor, I was making money doing it but it wasn't a business except for IRS purposes."

No way.

 

[g5000]

I just can't see how your tax bill is so high, Granny. If you averaged 9 bucks an hour, the most you would have made last year is $18,000. For a single filer, the tax rate on $18K is 15 percent, which means your federal tax bill should be, at most, $2700. After deductions and credits and exemptions, etc, it should be even less than that.