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Hi all, I frequently contract independent contractors and have a
standard independent contractor agreeement where it says they are
responsible for their own taxes. However, I am now looking at
contracting a guy that will work from home and basically just set up
leads for us and we pay him per lead. He wants to be an independent
contractor but wants me to pay his taxes and SS so he doesn't have big
bill to pay at the end of the year. I want to be sure he is not an
employee b/c i don't have to have to pay SS and unemployment from him.
He will completely be working on his own, on his own time, at his house
and getting paid per lead. He even has another business on the side.
So he is legitimately an independent contractor that merely wants me to
take taxes out for him. How do i best handle this on the contract?
Any tips? I wnat him to pay his OWN Social, taxes, etc. I don't mind
taking it out from his check and helping him out that way, but i don't
want to have to pay unemployment for him or anything. Let me know.
THanks, Carlos
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Hi all, I frequently contract independent contractors and have a
standard independent contractor agreeement where it says they are
responsible for their own taxes. However, I am now looking at
contracting a guy that will work from home and basically just set up
leads for us and we pay him per lead. He wants to be an independent
contractor but wants me to pay his taxes and SS so he doesn't have big
bill to pay at the end of the year. I want to be sure he is not an
employee b/c i don't have to have to pay SS and unemployment from him.
He will completely be working on his own, on his own time, at his house
and getting paid per lead. He even has another business on the side.
So he is legitimately an independent contractor that merely wants me to
take taxes out for him. How do i best handle this on the contract?
Any tips? I wnat him to pay his OWN Social, taxes, etc. I don't mind
taking it out from his check and helping him out that way, but i don't
want to have to pay unemployment for him or anything. Let me know.
THanks, Carlos
I suppose that you could hold back some of his income until his quarterly
1040-ES payments are due, and then get a bank check (not in your name) and
submit the 1040-ES payments for him. Make sure that his name and social
security number are on the check.
He would still have to file a tax return and might owe money or get a refund
at the end of the year. I would get something in writing from him that
authorizes you to do that, so that he cannot make any claims against you for
payments not made directly to him.
I assume that you know how to submit 1099 statements for the contractors you
pay.
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On Sat, 21 May 2005 19:19:55 -0400, "calberto22" wrote:
...I am now looking at
contracting a guy that will work from home and basically just set up
leads for us and we pay him per lead. He wants to be an independent
contractor but wants me to pay his taxes and SS so he doesn't have big
bill to pay at the end of the year....
I'm not a tax expert, but I'm a former contractor, and my advice is to
avoid this person like the plague.
First, if you pay his employment taxes, you will be treating him as an
employee, which will strongly bias the IRS (and any other concerned
agency) to find that he is an employee.
Second, his request is absolutely unprofessional for anyone who holds
himself out as an independent contractor. I would not trust a person
who did that as far as I could throw him.
My email address is LLM041103 at earthlink dot net.
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"calberto22" <calberto22@yahoo.com> wrote in
news:vvfv815gd39ijkpushljkb6go7hsijaarn@4ax.com:
Hi all, I frequently contract independent contractors and have a
standard independent contractor agreeement where it says they are
responsible for their own taxes. However, I am now looking at
contracting a guy that will work from home and basically just set up
leads for us and we pay him per lead. He wants to be an independent
contractor but wants me to pay his taxes and SS so he doesn't have big
bill to pay at the end of the year. I want to be sure he is not an
employee b/c i don't have to have to pay SS and unemployment from him.
He will completely be working on his own, on his own time, at his house
and getting paid per lead. He even has another business on the side.
So he is legitimately an independent contractor that merely wants me to
take taxes out for him. How do i best handle this on the contract?
Any tips? I wnat him to pay his OWN Social, taxes, etc. I don't mind
taking it out from his check and helping him out that way, but i don't
want to have to pay unemployment for him or anything. Let me know.
THanks, Carlos
As an independent, it's his responsibility to file quarterly estimated
payments, so if he follows the law, he won't have a "big bill" at the end
of the year. Actually, I'd be concerned about hiring a "business" that
didn't understand how to handle their finances!
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"calberto22" <calberto22@yahoo.com> wrote:
I am now looking at contracting a guy that will work from home
and basically just set up leads for us and we pay him per lead.
He wants to be an independent contractor but wants me to pay his
taxes and SS so he doesn't have big bill to pay at the end of the
year. I want to be sure he is not an employee b/c i don't have
to have to pay SS and unemployment from him.
How do i best handle this on the contract? Any tips? I wnat him
to
pay his OWN Social, taxes, etc.
A tax lawyer can help establish that he's legally an independent
contractor, if that is a concern. For the rest, talk to a tax
preparer, not a lawyer.
Generally taxes are not withheld or paid when a 1099 is issued, but
I don't know that it's necessarily the case.
Stu
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calberto22 wrote:
Hi all, I frequently contract independent contractors and have a
standard independent contractor agreeement where it says they are
responsible for their own taxes. However, I am now looking at
contracting a guy that will work from home and basically just set up
leads for us and we pay him per lead. He wants to be an independent
contractor but wants me to pay his taxes and SS so he doesn't have
big
bill to pay at the end of the year.
You say this guy already has his own business. Doesn't he know about
making quarterly withholding payments for his self-employment income?
He _shouldn't_ have a big tax bill at the end of the year if he
estimates his income correctly and makes adequate quarterly payments to
the IRS. Why should you take on the time and effort of doing that for
him? I wouldn't go there if I were you. If you explain to him how
quarterly withholding works, and his concern about a high end-of-year
tax bill goes away, then problem solved. If he still doesn't get it,
or comes up with some other reason why he wants you to pay his taxes,
then his explanation doesn't hold water IMO.
--
This posting is for discussion purposes, not professional advice.
Anything you post on this Newsgroup is public information.
I am not your lawyer, and you are not my client in any specific legal
matter.
For confidential professional advice, consult your own lawyer in a
private communication.
Mike Jacobs
LAW OFFICE OF W. MICHAEL JACOBS
10440 Little Patuxent Pkwy #300
Columbia, MD 21044
(tel) 410-740-5685 (fax) 410-740-4300
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Hi all, I frequently contract independent contractors and have a
standard independent contractor agreeement where it says they are
responsible for their own taxes. However, I am now looking at
contracting a guy that will work from home and basically just set up
leads for us and we pay him per lead. He wants to be an independent
contractor but wants me to pay his taxes and SS so he doesn't have big
bill to pay at the end of the year. I want to be sure he is not an
employee b/c i don't have to have to pay SS and unemployment from him.
He will completely be working on his own, on his own time, at his house
and getting paid per lead. He even has another business on the side.
So he is legitimately an independent contractor that merely wants me to
take taxes out for him. How do i best handle this on the contract?
Any tips? I wnat him to pay his OWN Social, taxes, etc. I don't mind
taking it out from his check and helping him out that way, but i don't
want to have to pay unemployment for him or anything. Let me know.
THanks, Carlos
I wouldn't withold for him as it would probably make him an employee in the
eyes of the IRS. You could, however, structure his pay so he receives a
large chunk as a year end bonus which would go for taxes.
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Jonathan Sachs <xxxxxxx@earthlink.not> wrote:
"calberto22" wrote:
I'm not a tax expert, but I'm a former contractor, and my advice
is to avoid this person like the plague.
First, if you pay his employment taxes, you will be treating him
as an employee, which will strongly bias the IRS (and any other
concerned agency) to find that he is an employee.
Yes, taxing authorities often look to indicia that are, from a
legal standpoint, relatively or completely irrelevant.
Second, his request is absolutely unprofessional for anyone who
holds himself out as an independent contractor. I would not
trust a person who did that as far as I could throw him.
Why not? He wants more than straight compensation, and he wants it
in a way that makes his life less difficult. There's nothing wrong
with asking for that. And if he's not otherwise a statutory
employee that shouldn't make him one.
Stu
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On Mon, 23 May 2005 15:33:23 -0400, "Stuart A. Bronstein"
<spamtrap@lexregia.com> wrote:
Second, his request is absolutely unprofessional for anyone who
holds himself out as an independent contractor. I would not
trust a person who did that as far as I could throw him.
Why not?...
Because -- I'm speaking now in a professional context, not a legal one
-- an independent contractor is supposed to be _independent_. He is
running his own business, and with due allowances for differences in
size between his business and mine, he is supposedly dealing with me
as an equal.
Businesspeople do not expect their clients to pay their taxes for
them, any more than they expect their clients to give them paid
vacations or family leave. A "businessperson" who does not understand
this does not understand what it means to be in business, and has not
earned the right to be taken seriously.
My email address is LLM041103 at earthlink dot net.
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On Sat, 21 May 2005 19:19:55 -0400, "calberto22"
<calberto22@yahoo.com> wrote:
He will completely be working on his own, on his own time, at his house
and getting paid per lead. He even has another business on the side.
So he is legitimately an independent contractor that merely wants me to
take taxes out for him. How do i best handle this on the contract?
You don't. His taxes are his problem. I can't see any way he's your
employee, since he controls the manner and hours of his working.
And he won't "get a big bill at the end of the year" because the law
requires him to pay estimated taxes by April 15, June 15, Sept 15,
and Jan 15. (That's right: 3 months, 2 months, 3 months, 4 months.
--
Stan Brown, Oak Road Systems, Tompkins County, New York, USA
http://OakRoadSystems.com/
"I feel a wave of morning sickness coming on, and I want to
be standing on your mother's grave when it hits."
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