Re: 1099 Issues

[David Demyan <concord -at- IX -dot- NETCOM -dot- COM>]

Laura Lemay wrote:

>If you're a sole proprietor, that is, you are an IC for the company you
>are working for, it is likely you are breaking quite a few of the 20 rules,
>and you should be very very careful.  From what I have heard it is close
>to impossible to do this an still be legal -- the closest you can get is
>to incorporate and effectively be your own agency.

>And yes, it is the employer who gets dinged if you're ruled as an
>employee and not an IC.  But keep in mind that if you're ruled as an
>employee, you can no longer claim yourself as a business.  You lose all
>your business deductions for that year, you can no longer claim a home
>office, etc. etc. etc.

and Sue Heim wrote:

>The moral of the story:  Beware if you are working for someone and they
>want you to file 1099's. They may be trying to avoid paying additional
>taxes and you will end up spending lots of time talking to the IRS!! <ick!>
[FYI, it is actually the client/employer who files the form 1099
and sends a copy to the supposed contractor; not the contractor  --DBD]

And I will repeat myself because it is important to all of you bright-eyed
fledgling entrepreneurs who want to work on 1099 status: DON'T DO IT!
No matter what you hear Joe Blowhard is getting away with, it is not
legal to work 1099 status unless you can PROVE (document with complete
corroboration from the client) that you pass every one of the 20 criteria
that Laura kindly provided. I don't know ANYONE in the technical writing
business who can pass every criteria. [Thanks, Laura; you did a real service.]

BTW, congress on both sides of the aisle has been tempted to change the
rules to be more favorable to home-operated businesses. If you really
believe that work-at-home, telecommuting, and small business enterprise
is best for America, feel free to write to the Washington crowd. We're
good at that (writing), so let's put it to good use.

Opinions are my own but also reflect those of my partner.

Dave Demyan                   ***                 Mendem Concord, Inc.
(908) 753-8500                ***                   One Mountain Blvd.
concord -at- ix -dot- netcom -dot- com         ***                    Warren, NJ 07059
FAX: (908) 754-8224