What do you guys do about taxes?

[Jacob J.]

My taxes were cornfusing cause I get paid for my saw (saw rent) that is non taxable income. had to keep every reciept for a year to use them as deductables, yea what a mess, turns out I had money out in sawing gear that I got paid for!

Saw rent is a way that logging companies get money to cutters that they don't have to pay taxes on. The workman's comp rate on cutters now as employees is terrible, around $0.34-0.39 of every payroll dollar- depending on how long your company has been in business, your work record, injury/accident rate, and how many employees you have.

One work around I had years ago when I needed bodies, was to hire them through a temp agency. I would pay the temp agency a flat rate per hour, per body. The temp agency would take care of payroll taxes and comp for the employees hired through them. The temp agency would then pay the employee minimum wage and I'd give a per-hour cash "incentive", which I could deduct as an expense. One job was roadside brushing, minimum wage was $7.25 I think. I was paying the temp agency $14/hr. and giving $5 to $7/hr cash incentive.

 

[Grouchy old man]

Ok, so I had to read that a couple times but I think I got your point. You are basically saying that if I have an extended stay with this crew, that actually the employer, legally should hold taxes and workman comp etc. And that companies who continually, year after year, give you a 1099 instead of treating you like a full time employer, are actually acting in an illegal manner. Now that is something I wouldn't have ever thought out! You have definitely raised my awareness.

Actually how long you work makes no difference. It's what the working arrangement is. You can be there for a day or a year.

If you report to them every day at a certain time, do what they tell you with their saws and equipment you are an employee and the company should be doing withholding, providing WC and disability insurance at minimum and giving you a W2 at the end of the year.

If you have your own company, do work for other people, have and use your own saws and equipment, are not told what and how to do jobs and set your own hours you are an independent contractor and the company you do work for needs only to give you a 1099 at the end of the year. From what you are teling us YOU ARE NOT an independent contractor.

... he has offered me a VERY high starting out pay

Might that be because he isn't paying workman's comp/disability and not paying half of your social security contributions? Might it also be that, because of Obamacare, he gets out of providing health insurance?

 

[twochains]

From what you are teling us YOU ARE NOT an independent contractor.



Might that be because he isn't paying workman's comp/disability and not paying half of your social security contributions? Might it also be that, because of Obamacare, he gets out of providing health insurance?

Yes, from, what I am telling you, I am not an independent contractor. Here is wher that plays in. I work for several other people on weekends also. Now hopefully I can start cutting back on weekend cutting due to the pay hike with this other guy. Being that I am still cutting for other people, I got to think of injury risk and the fact that I am not covered for that. So...I was thinking that if I became a self contractor and carried my own health insurance, that I would be more comfortable with weekend cutting.

As far as Obumblecare...Arkansas has instated their own state insurance nixing the obumble plan. Problem with that is I am currently outside of the pay break and I can't get the state plan.

 

[Grouchy old man]

It's not so much the health insurance, you can always get your own if you are willing to pay. I would be worried about comp and disability which covers you if you are hurt on the job. Unlike health insurance, it will pay for long term care and pay disability should you be so injured you cannot work. Most states require employers to pay for and provide comp and disability for their employees but not for the independent contractors working for them. A guy having his own company and working as an independent contractor will usually find it not possible to get his own comp and disability. So if you get hurt your only recourse is to sue the company you are subbing for and their customer to pay what often can be hundreds of thousands in medical bills. If you want to form your own company that's fine but don't do it just so you can work for somebody that's not doing the right thing by not providing the benefits you are entitled to. That extra pay won't mean squat if you get hurt and can't work anymore.

 

[Jefflac02]

Yes, from, what I am telling you, I am not an independent contractor. Here is wher that plays in. I work for several other people on weekends also. Now hopefully I can start cutting back on weekend cutting due to the pay hike with this other guy. Being that I am still cutting for other people, I got to think of injury risk and the fact that I am not covered for that. So...I was thinking that if I became a self contractor and carried my own health insurance, that I would be more comfortable with weekend cutting.

As far as Obumblecare...Arkansas has instated their own state insurance nixing the obumble plan. Problem with that is I am currently outside of the pay break and I can't get the state plan.

Arkansas may be setting up their own healthcare exchange, but it is the same plan as obamacare. Come 2014. Everyone will have to have it. Companies over 50 lives will have to provide it or pay a penalty, companies under 50 lives can offer a plan or they can send their employees to the exchange. If your company does not offer health insurance you will be required to go to the exchange and will receive a tax credit to help pay for it. You may be surprised the cost of a family of four will be lower than you are paying now when you get the tax credit. Didn't mean to hijack the thread. Just getting knowledge out there so everyone knows what is coming in 2014.

 

[TreeGuyHR]

Further note on my recent Workman's Comp experiences:

The end result of my audit is I have to pay at the highest rate category for most of my worker hrs (they keep changing their mind -- somewhere between $14.55 and $19.88 per $100 of wages). After I spent days re-constructing worker hrs for 2012 using 6 rate categories (tree removal, ground work or "landscaping", shop, timber cruising, clerical) turns out that the second category had to be folded into the first, because they base the rate on the type of job, not the type of work done on the job. The auditor allowed the other four, relatively low rate categories mostly because the hrs didn't add up to much compared to the first one; my documentation was not any more "adequate". Apparently, my own memory, day planner, contracts, and time cards were not enough; SAIF (the OR company that administers WC) wants employees to fill out one of their paper VTR forms (verifiable time record) with their hrs in the right job code, plus other info, with a line for each job, signed at the bottom.

Never heard of these forms before the audit (yea, ignorance of the law is no excuse and all that).

For example, I described a four day job to the auditor (at a second visit) on which I had a three man crew for two days brushing out two large pines, a third day lowering wood with a crane, and a fourth day with three guys just doing clean-up and firewood cutting, and all worker hours were pooled in one WC category (highest), even though there were no trees or ropes involved at all on the fourth day.

Doesn't make a lot of sense, just how they do it in Oregon, maybe.

I owe, I owe, it's off to work I go.