Long time employer wants me to go 1099 contractor

[skyking]

I do between 50 and 80 hours a year for this company.
I did everything from designing the first wired network, apps servers, file servers, security systems, phone system, wireless network.
I don't know what it is going to cost me for liability insurance. Seems all the underwriters are having a nice holiday
Is this going to turn into a huge PITA for me, what with insurance, paying my own quarterlies, paperwork?

 

[AznAnarchy99]

A year or a week? At least you can claim everything as a work expense.

 

[Slew Foot]

Turning a long term employee into a contractor doing the same job? IRS is going to kick that guys ass.

 

[skyking]

A year. It was about 100 hours while I was building it all, but now it has settled down a bit.

 

[skyking]

Turning a long term employee into a contractor doing the same job? IRS is going to kick that guys ass.

I wondered about that. Supposedly his accountant is giving him this advice.

 

[dbk]

You could file a IRS Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding....

IRS Link

 

[alkemyst]

A year or a week? At least you can claim everything as a work expense.

Not exactly, but you can do a lot.

You also have to figure in self employment taxes.

 

[JEDI]

ask for double the salary.
if he balks, stay employee while looking for another job.

u don't want to work for him anymore. he's trying to save $ at your cost

 

[sciencewhiz]

IANACPA

I assume you have a full time W-2 job (otherwise, I think we all want a job that only requires 80 hours a year). If your withholding from your first job is enough to cover the taxes for your main job and the 1099 job, you do not have to do any estimated taxes. You will be responsible for the employers portion of FICA, so you should ask for a raise at the same time.

 

[Imp]

You could file a IRS Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding....

IRS Link

This is a good idea. The IRS is not just there to bend you over...

P.S. Not lawyer, bla bla bla.

 

[steppinthrax]

I know some people at my job that did 1099 during the salary negotiation. In general you can ask for a hell of a lot more, because you are no longer an employee, you are almost like a consultant. Therefore you will need to purchase medical insurance, also they don't have to furnish computer/office equipment/desk/chair etc... (work from home). In general you would have to purchase all of that shit. Then you need to factor in commute expenses (when you need to come into the office). In general it's like you are running a business. One guy I know who did it saved all his receipts and claimed almost everything he purchased as a business expense.

 

[skyking]

I'm trying to dissuade the employer from doing this. It is my liability that concerns me the most. It is a medical business and HIPAA among other things comes to mind. I don't want to be another pocket at the table in any litigations, and really don't care for additional paperwork on my part.
They will pay double for my trouble if it happens at all.
Push comes to shove, I'll transition the management of the systems over to somebody else if I figure it to be too much hassle.

 

[Humpy]

I don't think double the pay would come even close to what it would cost to set up being an independent contractor for two weeks of work a year.

 

[UglyCasanova]

A year. It was about 100 hours while I was building it all, but now it has settled down a bit.

In that situation I would think contractor might make sense. At 80 hours a year you aren't an employee in the typical sense to say the least.

 

[alkemyst]

I'm trying to dissuade the employer from doing this. It is my liability that concerns me the most. It is a medical business and HIPAA among other things comes to mind. I don't want to be another pocket at the table in any litigations, and really don't care for additional paperwork on my part.
They will pay double for my trouble if it happens at all.
Push comes to shove, I'll transition the management of the systems over to somebody else if I figure it to be too much hassle.

At 50-80 hours in a YEAR. Are you really a line item?

 

[Blieb]

Yous guys ...
I'm pretty sure he means he is working 50-80 hours per WEEK all year long.

 

[Puppies04]

Yous guys ...
I'm pretty sure he means he is working 50-80 hours per WEEK all year long.

Did the fact he said year repeatedly confuse you? Dumbass.

 

[bearxor]

You're a contractor. Take the 1099, increase your hourly rate by 50%.

 

[IndyColtsFan]

I guess I don't understand your position. Are you saying you were only working 50-80 hours PER YEAR on average and he was paying your insurance, or are you simply saying that since you were technically an employee, your liability was covered by the company's insurance?

Regardless, for so few hours, they'll probably hire someone else if you don't agree to become a contractor. So, just jack your rates up and accept it. You'll need to research liability insurance, etc. in order to determine a fair rate to charge. I'm not sure how liability insurance specifically works, but if those 80 hours are spread more or less evenly throughout the year and if you have to pay a monthly premium to be covered for liability, it may not be worth your time.

 

[skyking]

That's the problem in a nutshell. As a straight up employee, I fall under his policy and I'm not going to get individually sued. As a contractor, it is far less clear. I have not had a formal quote from anybody for the proper amount of insurance. I have made some requests.
As far as them hiring somebody else, they really don't want to go there. They dealt with local vendors in several different businesses, and it was a generally poor experience. I'm not over the barrel on this, they are.

 

[alkemyst]

That's the problem in a nutshell. As a straight up employee, I fall under his policy and I'm not going to get individually sued. As a contractor, it is far less clear. I have not had a formal quote from anybody for the proper amount of insurance. I have made some requests.
As far as them hiring somebody else, they really don't want to go there. They dealt with local vendors in several different businesses, and it was a generally poor experience. I'm not over the barrel on this, they are.

Everyone thinks they are irreplaceable. In all honesty, they wouldn't be having this conversation with you if you were indeed so valuable to them.

It sounds like this is a push to have you move on.

It's going to be hard to find insurance that is going to be cost effective for so little hours worked per year.

They may be able to write you insurance like those that do dangerous sports on a per event/day basis. This tends to be really expensive for the units, but much much cheaper than carrying that insurance all year.

 

[skyking]

If that is what it sounds like, you don't listen well. I am by no means irreplaceable, but they don't want to go through the trouble I even offered to make it very easy for them. They balked.

 

[alkemyst]

I even offered to make it very easy for them. They balked.

You aren't making sense then.

 

[TwiceOver]

So I take it you have a real second job? Or you are getting paid $1000/hr?

Or do you do this as a side business? Maybe turn it into a real business?

 

[skyking]

I have a few different jobs.
There are about 6 small businesses I built up as an employee in each case. I did not bring up the hourly rate on purpose.
I'm really happy with the current arrangement and hope they leave it alone.
I was looking for input from somebody who made that transition from an hourly employee to a 1099 employee.