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URL:  https://boards.fool.com/1099-means-he-was-a-contractor-not-an-employee-22760478.aspx

Subject:  Re: Can you advise? (long) Date:  7/17/2005  3:39 PM
Author:  Booa Number:  208452 of 313043

1099 means he was a contractor, not an employee. That's why there was no withholding of taxes.

Sometimes companies "switch" you to being a contractor despite your job not changing one iota. It happened to my DH. Your friend should go on the IRS web site, download the form to fill out to see if he qualifies as an employee or as a contractor, and then follow up on it.

My DH happened to fit more or less into the definition of "contractor." Paid based on hours worked, telecommuted, things like that. Your friend should check out this form, and see if he can be considered an employee, and if so, follow up with the IRS. If he ends up owing the IRS money, they're pretty good about working with people, about setting up payments plans and stuff. Good luck to your friend. I don't think he just has to accept the company reclassifying him, but it will probably take some time to sort it out, so the sooner he starts, the better. We probably would have made more of a stink about my DH getting classified as a contractor, but he was still working there, he wanted to still be working there, and he was sort of between the two definitions, so we kept quiet about it.

Oh, and I suggest your friend hedge his bets and make some kind of estimated tax payment on September 15 and January 15 of this tax year. He may or may not be able to get classified as an employee, but it's better to cover his bases. He can also look at I think it's Publication 560? 960? that talks about being self-employed, and some of the record-keeping you can do to take deductions for self-employment, if he ends up being officially a contractor. The more proactive he is, the better it will go for him either way, you know? If he can more or less estimate what he'd owe on the contractor income, the income that showed up on the 1099, and he can make some payments on that, that would help him.

But wait, if he got a 1099, he should have already filed the taxes on that tax year--you get your 1099 in January or February for the previous year's work--when did he get the 1099? What year was it for? Is he filing taxes late, in October, for 2004?


--Booa

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