First employee (Ex)

Hi there
Need weekend advice (Monday will check with someone)

Had an employee (My first and only one so far), worked for me from May 08 to Sept/Oct 08 when I fired the sucker.

Is there any deadline for me to give him a 1099 if that’s the correct one ?
If you feel like elaborate a little bit and have the time to do it I’ll appreciate it

Have a nice weekend
Carlos

Form 1099s must be sent out to the contractors by January 31, 2009. They are due to the IRS by February 28, 2009, unless you’re file them electronically, in which case the due date is March 31, 2009.

Thanks Larry, I’ll check more into it on Monday.
Don’t wanna mess with that people, and particulary the first time.

Larry is 100% RIGHT!!!

Is he an employee or a constractor? It makes a difference.
Subcontractor=1099
Employee= 1040

You can tell that I’m quite green at this stuff.
I do understand that it makes a difference, but even myself was tricked with an 1099 when I was an employee using company’s truck, tools and everything, and getting paid by the hour. This guy was using his own truck and my tools, but he was getting commission, so I don’t know how his situation should be qualified.

I paid him every week but didn’t receive any invoices from him or something like that.

You should talk with your accountant to be sure. In a traditional case a subcontractor would be one who owns their own company, tools truck, etc. You would then “Contract” them for work. Ie: You win a bid for a highrise building but your company does not have the means to complete the job. You then contact a company that does have the means. You then draw up and agreement for them to complete the work. That’s your contract and you would 1099 the company. They would be responsible to pay the taxes on the money earned.

A traditional employee is one who works directly for your company. You pay workmans comp insurance, and in some cases health. Also you would be required to withhold taxes on their check. Being the person agreed to drive their own truck still does not make them a “subcontractor”.

If I had to take a GUESS on your situation, I would say the person would be classified as an employee. But like I said I would contact an accountant because if they are classified as an employee, there are taxes that should be held back from their paycheck. Ie:Federal and state, social security, etc. If you did not do that, you could have some issues.

The main thing is your agreement with him. Does he expect you to 1099 him? If so does he understand once you do this. He is the one required to report the income? You have to be very clear when working with people as to the taxes issue.

Appreciate your help Ray, and I understand what you’re saying.
Thing is that I bought my company and “inherited” this individual, with everything as it was.
My idea of course is to do everything as it should be done, and fix what’s not up to those standards.
This guy worked for me less than 4 months and he was being issued a 1099 each year for the previuos owner.

But I’ll check that soon, I don’t have an accountant right now, but will need to get one even when my volume of work doesn’t call for it … too much crap and too complicated, and on top of all that, can get you in real trouble.

Thanks again
Carlos

by law, if he wears your uniforms,uses any of your tools ,etc he is an employee

you can get away with it though, but if he turns you in to the labor board or IRS, you are screwed, you better get some workers comp and start matching his taxes.

or just have him as a sub contractor with his own tools and truck.