Ask MetaFilter questions tagged with 1099

Consulting - am I doing it wrong?

Anonymous — Tue, 05 May 2009 12:37:04 -0800

I'm just starting out as an independent network and systems contractor and I think I've agreed to a bad deal. What are my options? This all came about as I got what sounded like a cool job offer and the recruiter offered to help me setup a contracting gig rather than hire me as an employee. But the more I learn, the less it sounds like I'm in a good spot.

Backstory: Senior windows/cisco IT guy, damn good, (mcse+messaging/ccnp skills, but no certs) 14 years experience implementing all manner of microsoft and cisco products in a midsize environment, done management and budgeting, like the job but hated the non-technical parts. I was let go last year and after failing to find a good fit locally I wanted to switch over to consulting in a new larger market so I moved to Washington DC a month ago.

One company responded to my resume within an hour (!) and I was asked to come aboard after a short phone interview on a sunday (!!) to bring up an office for a federal agency as a subcontractor the following monday(!!!). Sounded quick and easy on the phone last week. Well, things have been "held up" and there are no servers or routers except a leased line to a single hosted box. So I'm doing helpdesk grunt work for ~50 users with no end in sight.

So on to the help setting myself up. I was asked and agreed to quote a flat monthly rate (which now seems low (works out to be ~$200 for an 8-hour day, less the more I work)), at net 30, for this on-site support. There is no set end date. I have to be on-site 8a-5p every day unless I make arrangements for another guy from the same agency to cover me. I cannot leave if there is no work, but if there is extra I'm expected to stay until it's completed. If it matters I have no contract or SOW only an NDA, so I think I'm free to walk away at any time.

Questions:
1) Is the money range low for my skill sets in the area?

2) Is this a normal contract structure for federal IT contractors or this area?
2a) How do I get a feel for the norm in this area without actually trying to hire people?

3) Can / Should I try to renegotiate the verbal deal?
3a)How do I best go about renegotiating without burning bridges? I'd like to do the actually implementation work if it ever happens, but I really want to get away from desktop support.

4) Where can I learn more about starting out as an independent so I can avoid these mistakes in the future? There were some links in other contractor posts, but they seemed aimed at designers so I'm not sure how much applies.

Any other resources or help with starting out as a newbie consultant would be greatly appreciated. A good contractor community site would be ideal.

Thanks in advance.

anon to avoid attaching my real name to the mess I've made. I'll happily followup in mefi-mail or with a mod if needed.

1099 help for my nonprofit group

Anonymous — Mon, 27 Apr 2009 10:21:52 -0800

My nonprofit did not send out 1099s. Now what? I am the treasurer for a small club-like nonprofit. In 2008 we started paying someone to do small tasks like setting up our meeting hall, arranging food service, etc. Her pay came out to about $1000 for the year. As this was our very first paid individual in the history of the organization, I did not send out a 1099 to her, or collect her tax data, simply because it did not cross my mind. She has not requested it either. I'm thinking that I made a big mistake here, and I don't have a lot of accounting background (I'm kind of the de-facto treasurer). What should I do now that all of the deadlines have passed? I desperately want to get everything above board, as the IRS makes me itchy.

What to do when a company won't give me a correct 1099?

Ookseer — Fri, 20 Mar 2009 13:17:24 -0800

A client sent me a incorrect 1099-MISC and now refuses to correct it. It's in their tax favor. What can I do? (No, you're not my accountant. But my accountant isn't going to get back to me until Monday and this is going to bug me all weekend.)

So they say they've paid me a several thousand dollars (and change) more than they did. This gives me a higher tax burden and them a tax break. It's not an accounting error. I've compared my invoices to my deposits to verify my number. And it's not "a check or invoice crossed the new year" problem. They report a suspiciously round number, the actual number is one of the least round numbers I've ever seen.

I stopped doing business with them early in the year because they refused to pay me. There were some bad words and letters from lawyers sent, and apparently now they're not talking to me at all. Emails, phone calls and letters directed to personal and business addresses have all gone unanswered. I'm not even sure they're still in business.

Do I report the correct amount and deal with the inevitable IRS inquiry, tip them off to the IRS beforehand, or suck it up and pay the extra tax as a "not worth the trouble" fee?

1099 for outstanding debt?

Anonymous — Mon, 05 Jan 2009 10:28:04 -0800

1099 for outstanding debt ?? My company owes a vendor a few thousand dollars - since they have very little money and because they dispute the exact amount of the debt, they are stretching the issue out as long as possible and avoiding the debt collector's calls etc. Now the debt-collection company has left a message demanding a IRS form 1099 be submitted (to the IRS) to record the 'unearned income'. My understanding is that a 1099 is created/required to record payments to sub-contractors (so it's from the *payer* to the IRS about the *payee*). In this situation I can't quite work out what this request might be about ... by not paying a debt, I kinda see that the debtor has 'gained' that money. But what it is the use of that form in this instance ? I'm thinking it's some kinda of trick/device by the collection agent to sound scary or to get the company to formally record the amount of the debt (remember the exact amount is disputed). I can't really see how it helps them collect the money?

Any help please?

Should I pay?

eightball — Thu, 20 Mar 2008 08:35:29 -0800

Taxes: Should I claim this freelance I did last year? I did some freelance web work for a church in 2006 - 2007. Was paid about 5K in 2007. I never received a 1099 from them. Do I have to claim this income?

I'm pretty sure the answer is going to be "yes, you should claim all income you received". But what I really want to know is: What are the chances that the IRS comes knocking on my door some day? Considering the fact I never got a 1099, how would they know I received this money?

A few general questions on hiring a part-time employee

jpep — Fri, 14 Sep 2007 09:26:27 -0800

I'm a one-person website development company. Things have been getting busy lately so I'm thinking about hiring my first part-time employee. This is new to me, so I'm looking for some advice. The plan is to target the local university to find someone with about 10 to 15 hours available per week. I have two initial questions...

1. How complicated is the paperwork/accounting? I do my own accounting, so I'd have to figure out tax withholdings and related stuff. Do I have to somehow 'register' with a government agency regarding taxes, employment, etc?

2. Is it out of line to request that the employee have a laptop to use while doing my work? The alternative is to buy a computer for the part-timer, but that is a pretty big expense.

As an aside, I do work with contractors (1099s) for some projects, but I don't think I can call this part-timer a contractor because I am going to request that they work at my office during a set daily schedule. It won't be project-based work. Is this correct thinking?

Thanks.

Contract vs employee?

boo_radley — Wed, 18 Jul 2007 14:07:52 -0800

Out of the blue, I got a job offer -- a very compelling job offer. The only thing that sets off any alarms for me is the fact that I would be a 1099 contractor instead of a full time employee. Help me understand what the difference is.

So, why did you leave your last job?

Anonymous — Sun, 28 Jan 2007 20:03:50 -0800

My very first post-college job has little resemblance to the one for which I interviewed. In a couple of weeks, my trial period is up. I do not intend to take the option for employment. How do I spin this in future interviews? When I was offered this job as a Java programmer with a year-old startup, I negotiated a salary based on information in the interview. They described a relaxed work environment. It was described as a "full time job" when I asked about the approximate number of hours I'd be expected in the office, and in discussion of salary the phrase "40 hours" was mentioned. Furthermore, I interviewed for a position that existed to develop a new product from the ground up on a platform with which I had a great deal of experience.

In reality, the work environment is anything but relaxed. I expected to work hard, but I hadn't expected to be ordered about on an hourly basis responding to the arbitrary whims of my superiors. Schedules are prepared by my superiors (who have no technical background whatsoever) with little or no input from engineering, and the two of us engineers are expected to complete them "on time" by working overtime (unpaid, of course, since we're salaried). This can amount to 60-hour weeks for weeks on a stretch.

Recently, the comfortable 10-6 schedule I was enjoying so much was dessimated by a decree that we should arrive no later than 9.30. No other information on this new policy was given. When I arrived half an hour late, in the middle of the eternal "crunch time", I was sent home and my pay was docked.

The generally non-relaxed atmosphere, the below-median salary, and the nearly non-existant benefits have lead me to decide that I cannot continue my employ with this company.

I hear constantly in all advice about interviews, not to be negative about previous employers. Likewise, these people are not going to provide a good reference; in their eyes, I'm sure I underperformed. So when asked why I left, I'm going to have a hard time explaining this positively. Likewise, I'm going to need to qualify the report they might get from my previous manager.

However, I don't just want to leave these folks off my resume. The development was smack dab in my field, and I learned more there in the three months than I did in a year of university. The knowledge I have is an asset that I don't wish to deny.

My entire trial period is 1099, so can I spin this as a contract-to-hire gig that I just didn't take the hire option on?

Is there a form coming?

schwap23 — Sat, 27 Jan 2007 10:00:51 -0800

Self Employed Tax Question: I worked as a freelance carpenter for half of '05. Should I be looking for a form from the place(s) that I worked for in the mail? Or do I need to crack out my bank statements and a calculator? (I'm in Chicago, if that makes any difference)

How do I choose a lawyer?

sequential — Thu, 02 Nov 2006 21:28:14 -0800

What kind of lawyer do I need and how do I evaluate the ones I contact? I'm a 1099 contractor with a client who has not paid his bill since 10/01/2006. In August we agreed to an arrangement like net-10, where I essentially gave him some flexibility when I expected payment. Since then, every payment has been later than the last. At the close of the last billing period, after the check from 09/15 cleared - I do learn - I wrote the client a polite letter explaining my concerns about the amount due and the lateness of the payments. In closing, I explained that I was uncomfortable continuing to acrue billable hours for the company until some resolution was reached.

My aim was not to fire the client, so the letter was softer than a demand for payment. However, the clients reaction was essentially to terminate the working arrangement and stop communicating altogether. During our brief interaction regarding the letter he did agree (in email) that he owed the money, but did not agree to pay it or even hint at when it might be received.

I don't know the first thing about finding a lawyer, even though I did speak to a lawyer I found in the phone book about the previously linked matter. Considering the amount due is in excess of $5,000, the limit for small claims court in my state, it appears that finding a lawyer is my next step. What kind of lawyer am I looking for? If you could point me in the right direction for resources on finding, evaluating, and estimating the potential cost of a lawyer, I'd be very appreciative. I have looked through FindLaw and NOLO, but could not determine what kind of lawyer I need. I also searched number of different search engines, but found a low signal to noise ratio.

Thanks for your help.

What are my options in dealing with an employer who has put a stop payment on a paycheck for work completed?

sequential — Sat, 19 Aug 2006 10:59:30 -0800

What are my options in dealing with an employer who has put a stop payment on a paycheck for work completed? The details are pretty straight forward. I received payment on 08/17/2006 for work completed between 08/01/2006 and 08/15/2006. The check was deposited on 08/17/2006. I logged in to my bank account this morning to find a hold was placed on that check. A quick call to customer service yielded that the likely culprit is a bounced check, but several other scenarios were possible. Given that the hold status appeared within hours of my call, further information was unavailable.

I called the issuing bank to see if they could verify the status of the check. After a short verification process, the customer service representative informed me that a stop payment had been put on the check that morning by the account owner. She also verified for me that the account was a business account, though I'm not sure that's particularly useful information.

I work for this company as a 1099 contractor. I am the companies only employee. I have received three other payments from this company that have all cleared. I keep copies of all checks from clients. This check, in particular, clearly states in the memo field: "Full and through 08/15". I do not have a written contract with this client, however the deal was brokered through a third party, which yielded email copies of the details of the working arrangement.

What recourse do I have in the matter? For the sake of clarity, I do not wish to maintain a relationship with this client. At the very least, I'd like this paycheck to clear. I am willing to write off work done during the current pay period to accomplish this, though I'd obviously rather be paid in full. I do not wish for any such payment to be stipulated on further work considering this paycheck is for work already successfully completed. Lastly, that the work was completed is not in question. The stop payment was done clearly in response to notifying the client that I would be terminating our working arrangement immediately for other breaches of trust, for which there is no penalty in accordance with the arrangement.

It may be useful to know, in case you have had such an experience, that the employer is based in Massachusetts and I am based in Connecticut. I'm interested in learning what my legal rights might be, but I'm primarily interested in hearing what tactics others have used to successfully resolve similar situations.

Thanks for your help.

How badly have I messed up my taxes?

Anonymous — Sun, 09 Apr 2006 11:05:05 -0800

I earned 12,100 total income this year. All 1099. Have not made any estimated payments. How bad is my tax situation? This will be the first time I file. Based on the IRS tax estimator, reading on the IRS website, and what my parents and friends told me, I thought I would get to the end of the year and owe about $800. And I guess I do, in income tax, but there is also the self employment tax. I do not have enough money to pay that. I thought I was being smart, keeping track of, and saving more than enough to pay, what I would owe. But I guess I owe about six times that and I can't pay. I earned 12,100 dollars. All from a single company that I did contract web design work for. So how screwed am I?

1099 Tax Issue

matimer — Tue, 14 Mar 2006 12:38:30 -0800

Oops tax seasons here and I accidentally threw away my 1099 forms... (i had three of them).... do I need them or can I just add up the money I made from the companies and put that on my tax form?

Also does irs.gov already have a copy of these forms and if so can i access them some how?