Pros and Cons of 1099 versus withholding

On that note....I am closing this thread. Once lawyers are mentioned, per forum rules, closing is warranted.

Wanderingbob, I believe the WesternPark has done a respectable job of attempting to get up straightened out as to where YOU are confused on this issue. Believe me, as a successful homebuilder for many decades, I have paid more subcontractors than I can count, and spend many, many, millions doing so.I have also studied the situation at length, been grilled on the issue by the IRS (and my liability providers), and have witnessed several of my sub-contractors do battle for years with the IRS on this topic, as you might imagine, I have a bit of a clue on this topic. To say that I am "confusing 1099s and workman's compensation insurance" is laughable, at best.

Your posts really are awash with a lot of confusion and misinformation. First, a large percentage of the service industry and the residential construction, repair and renovation industry rely on illegally "misclassifying" their employees as independent contractors. This fact has nothing to do with your chosen field, or the rules that govern it. Second, at least as it applies to the laws governing my home state, if you get a 1099 to record your compensation, you are NOT covered by workman's compensation insurance. Either you are an employee, or an independent contractor. You cannot be both, and an employer cannot buy coverage for anybody but their own employees. Should be pretty self- explanatory, no? Therefore, if you are working as an EMPLOYEE, as defined by the IRS, and being illegally paid with a 1099, you are at great risk IF you are injured. I am also a bit confused as to how you determined that I stated that folks employed as contract workers are doing anything wrong or are stupid????

The whole point of the information that some of us take the time to provide here, is that a workcamper IS NOT working as a CONTRACT worker, IF they are working by the hour, working under direct supervision of their employer, using company provided tools, equipment, or vehicles, or failing to present themselves to the community as an independent contractor. This is not my interpretation of the issue, it's a small part of how the feds. have decided that the game is played.

Finally, you state in a rather factual manner that the thousands of day laborers, drivers, and others you have done business with, and are operating as independent contractors, are entitled to the same benefits as employees in the event of an accident, or injury on the job. That brings the situation into pretty sharp focus, and clarifies the indisputable fact that you REALLY don't understand what you are talking about.

Good afternoon RV'ers,

I just read some of the contract labor post. I will be contacting my lawyer this week to figure out what the correct way to hire (any of you) laborers would be. I know there was some debate about insurance with general liability and WC. Along with the W2 vs W9 employees. Ideally I would like to W9 employees (for simplicity of payroll) but include all contractors on insurance. I am already paying for insurance regardless of if its W2 or W9 employees/contractors so why not have everyone covered? Insurance is based off payouts so regardless ifs W2 or W9 I still am paying $44 on the thousand for WC, Gen liability, and Unemployment. With a W9 the only thing I wouldn't put on the policy would be your trailer.

Again this is something that I need to talk to my lawyer about.

westernrvparkowner wrote:

wanderingbob wrote:
SOREN ,
I believe that you do not understand the difference between a 1099 and workman's comp.
Who would receive a 1099 , Real estate salesmen , most hair dressers , many barbers , long haul owner/operators , auctioneers , many commissioned sales persons , contract guards , taxi drivers ,this list can go on for several pages . Just because they are contractors they do not loose the rights to take advantage of the courts to right a wrong for injury or any wrong .
It sounds as if you believe that most , if not all contract workers are doing something wrong and are stupid . You say that you worked in constitutions , have you not hired many independent contractors to do the plumbing , wiring, landscaping .
The State of Florida is now contracting for gate guards at remote check stations , The Federal Gov . contracts with individuals for services all the
time . Why don't you call them up and tell them that they are wrong .
I have worked as an independent contractor in the insurance industry for 35 years along with thousands and thousands of other adjusters , auctioneers , tow truck operators as well as thousands of drivers hired for the day . If they get hurt the person that they work for is just as liable as any other business or employment situation . Lets move on to some thing to do with RVing , please .

You can believe anything you want, but the fact of the matter is most workamping positions are positions that make the worker an employee, not an independent contractor. This is a very valid discussion for this forum and it is directly related to RVing. If you really think you would be insured as a 1099 independent contractor by an "employer" (in quotations, because by definition an independent contractor does not have an employer) you would be mistaken. Yes, maybe you could sue, maybe even win, but what are the odds that a business that is circumventing federal law to save a few dollars in unemployment and workmans compensation insurance costs will have deep enough pockets for you to collect any judgement? Most of these businesses will be organized as LLCs and getting to any actual assets will be very expensive, if it can be done at all. People who take workamping positions need to be very aware of the risks they are taking if they get convinced their job isn't actually employment and that they are 1099 employees. BTW, the IRS can and has gone after both sides of wrongful 1099 situations. Both the employer and the employee. IF you are writing off expenses and the like as a 1099 independent contractor and the work you did as a 1099 contractor did not qualify you to be an independent contractor, all those deductions are invalid. The IRS will not care what you think, or what you believe or even how you interpret the law, they make the determinations and levy the taxes, penalties and interest. Try taking them on, they win much more than they lose.

This is an RV workamping forum. The normal workamping position is almost assuredly legally a job that makes the worker an employee and they should be receiving their wages as a W-2 employee. If they are doing a normal workamping position, and the person they are doing the work for claims they are a 1099 independent contractor, that is just plain incorrect and illegal under our current tax code. Now that doesn't stop some parks from hiring their workampers and not putting them on payroll and not providing required unemployment insurance and workmans compensation insurance, hence the warnings from Soren and me. There is absolutely nothing wrong with a true independent contractor getting paid and issued a 1099. But a true independent contractor doesn't work 9 to 5 at the reservations desk of a campground. A true independent contractor does not clean restrooms and mow the campground's lawn, using the campground's equipment on the campground's schedule. That makes them employees and makes both them and the employer legally bound to be paid and withheld on a w-2 schedule. That is what we are trying to convey.

I believe that we are comparing apples to oranges here ! My claim is that a vast majority of 1099 forms are issued to legitimate " contractors " , I am sure that there are crooks out there ,who evade taxes and responsibility , but that is not what the OP s question was . I never claimed that you would be insured , I said that you enjoy the same rights to the courts as everybody else . I have had as many as sixteen 1099 s in one year . You are assuming that we are all stupid and we are all crooks ! I have been audited by the IRS , passed all the way , but then maybe I am the only legal contractor in the country . Probably the guy who brought your RV from the factory got a 1099 for his troubles .

wanderingbob wrote:
SOREN ,
I believe that you do not understand the difference between a 1099 and workman's comp.
Who would receive a 1099 , Real estate salesmen , most hair dressers , many barbers , long haul owner/operators , auctioneers , many commissioned sales persons , contract guards , taxi drivers ,this list can go on for several pages . Just because they are contractors they do not loose the rights to take advantage of the courts to right a wrong for injury or any wrong .
It sounds as if you believe that most , if not all contract workers are doing something wrong and are stupid . You say that you worked in constitutions , have you not hired many independent contractors to do the plumbing , wiring, landscaping .
The State of Florida is now contracting for gate guards at remote check stations , The Federal Gov . contracts with individuals for services all the
time . Why don't you call them up and tell them that they are wrong .
I have worked as an independent contractor in the insurance industry for 35 years along with thousands and thousands of other adjusters , auctioneers , tow truck operators as well as thousands of drivers hired for the day . If they get hurt the person that they work for is just as liable as any other business or employment situation . Lets move on to some thing to do with RVing , please .

You can believe anything you want, but the fact of the matter is most workamping positions are positions that make the worker an employee, not an independent contractor. This is a very valid discussion for this forum and it is directly related to RVing. If you really think you would be insured as a 1099 independent contractor by an "employer" (in quotations, because by definition an independent contractor does not have an employer) you would be mistaken. Yes, maybe you could sue, maybe even win, but what are the odds that a business that is circumventing federal law to save a few dollars in unemployment and workmans compensation insurance costs will have deep enough pockets for you to collect any judgement? Most of these businesses will be organized as LLCs and getting to any actual assets will be very expensive, if it can be done at all. People who take workamping positions need to be very aware of the risks they are taking if they get convinced their job isn't actually employment and that they are 1099 employees. BTW, the IRS can and has gone after both sides of wrongful 1099 situations. Both the employer and the employee. IF you are writing off expenses and the like as a 1099 independent contractor and the work you did as a 1099 contractor did not qualify you to be an independent contractor, all those deductions are invalid. The IRS will not care what you think, or what you believe or even how you interpret the law, they make the determinations and levy the taxes, penalties and interest. Try taking them on, they win much more than they lose.

DH works part time as an independent contractor and is paid with a 1099. Because of this, we carry a separate liability policy and AFLAC. Better safe than sorry. Personal liability (umbrella) policies are really cheap and worth the peace of mind.

In MI if you are a self employed individual paid on a 1099, you must provide your own liability and wc coverages for yourself. You can satisfy this requirement thru a state run high risk pool that does not actually provide you the owner with any coverage, but does provide you with a cert of ins so you can bid and get a job. At the end of a year, all but admin fees are returned unless you yourself had employees that were injured and filed claims. Not every state is the same.

SOREN ,
I believe that you do not understand the difference between a 1099 and workman's comp.
Who would receive a 1099 , Real estate salesmen , most hair dressers , many barbers , long haul owner/operators , auctioneers , many commissioned sales persons , contract guards , taxi drivers ,this list can go on for several pages . Just because they are contractors they do not loose the rights to take advantage of the courts to right a wrong for injury or any wrong .
It sounds as if you believe that most , if not all contract workers are doing something wrong and are stupid . You say that you worked in constitutions , have you not hired many independent contractors to do the plumbing , wiring, landscaping .
The State of Florida is now contracting for gate guards at remote check stations , The Federal Gov . contracts with individuals for services all the
time . Why don't you call them up and tell them that they are wrong .
I have worked as an independent contractor in the insurance industry for 35 years along with thousands and thousands of other adjusters , auctioneers , tow truck operators as well as thousands of drivers hired for the day . If they get hurt the person that they work for is just as liable as any other business or employment situation . Lets move on to some thing to do with RVing , please .

wanderingbob wrote:
If ya do not get hurt there ain't a lot wrong with a 1099 . .

Seriously? And if you do get hurt, permanently disabled, or killed, the entity that is breaking the law by illegally claiming that you are an "independent contractor" should bear absolutely ZERO responsibility. Working for ANYBODY who does not have you properly covered in the even of an unforeseen accident is beyond stupid! There is one popular blogger who, as a seasonal forest service employee, recently became disabled after a serious crash, while on duty. If he were employed under your "no big deal" philosophy, he would of been screwed for life. But no worries there, eh? At least he would of had the chance to play a few games on his taxes, while pretending to be something he's not. Accidents only happen to others, until you are laying face up while the flight medic is explaining to you that you are being loaded into the chopper for a ride to the trauma center. No worries there either, if you walk away from this event, you will probably generate a sweet six figure care bill that you can write of as a business expense. Wow, some folks just amaze me.