Short answer: If the LLC is organized as a corporation, and is not an attorney, then a 1099 is not required.
LLC’s can be organized in different business structures
“LLC” means “Limited Liability Company.” A LLC is not necessarily a “Corporation.” A mistake many people make is to assume that anyone with an LLC is incorporated. […]
That’s correct: under the Unemployment Insurance Code 13052.5, if the EDD audits your company and decides you misclassified your consultants you will be assessed for their personal income tax withholding. Also, it is illegal for you to go back and attempt to collect the tax from the consultant after the fact.
The personal income tax […]
If you read my last article for ICs you can probably guess. There are a whole bunch of reports and taxes coming up that must be filed and paid.
What are some examples?
You probably thought of the Form 1040, U.S. Individual Income Tax Return that everyone must submit by April 15th (unless you request an […]
If so, are you treading on thin ice?
What is Safe Harbor?
Some think Section 530 of the IRC is a “Get Out of Jail Free Card.” They think a business that qualifies for Safe Harbor may treat a worker as an Independent Contractor for federal employment tax purposes, (see Thin Ice Warning below) […]
I have another question for you:
If you realize your IC is misclassified what are your remedies for fixing the problem?
When a company realizes they have misclassified workers they often aren’t sure how to remedy the problem. Actually there are several paths to properly correcting the relationship.
Here are three options to consider.
Option 1: Reclassify the […]
NEW YORK-Following two straight years of declines in the number of new lawsuits and regulatory proceedings, including a drop in large-dollar cases, a 2008 survey sponsored by international law firm Fulbright & Jaworski L.L.P, indicates that U.S. companies now anticipate an rise in new actions and government probes.
The survey asked the legal counsels and […]
This is the worst time to take shortcuts in your Contingent Worker and IC Consultant Compliance Programs.
Banks are being taken over by the government, Wall Street is being “bailed out” and the unemployment rate is higher than it has been in years. In this economic environment companies that can reduce costs have a better […]
Why does the auditor keep reassuring the taxpayer everything is going well during the audit, if there’s going to be a large tax assessment at the end?
Clients often tell me about the auditor who seemed to be such a nice guy. They say, “He smiled whenever he asked questions, answered all my questions and […]
It’s not uncommon for fast growing companies to subscribe to the philosophy of avoiding costs today to maximize profits, thinking they can pay them much later, if ever. When you apply this concept to Independent Contractor compliance it sometimes goes like this: “We’ll save money by making our workforce IC’s and take our chances. […]
Last time I introduced the First Layer of the infamous Layered Defense Strategy Argument-”I won’t get audited.” This time let’s talk about the next level of this infamous strategy.
The Second Layer:
You are sitting in your conference room, discussing the use of IC consultants and temporary help, and how beneficial this strategy is to your company. […]
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