Ok Friends, I need some good advice....

Hey guys, I am in a situation that I don't know how to handle. My roommates friend wants to hire me part time to run his stand at various farmer's markets. It won't be regular but just whenever he has a stand at one of the markets. However, he said that he had 2 or 3 days a week for me. It only pays $8 an hour so I can work one day a week without going over my benefit allowance and having trouble with that.

Here is the kicker:

He does not want to "hire" me he wants me to fill out an I-9 or a w-9. I don't really feel comfortable with this. I am sure his plan is to avoid paying hiring taxes on his employees (he has several already). At the end of the year he will report all this wage payment as a deduction on his new business, claim a loss and pay no taxes at all. However, all of his employees will owe taxes at the end of the year. I feel like I am being screwed. If I had a landscape contract or something that paid a decent amount of money it wouldn't be a big deal but this minimum wage (below minimum after I pay taxes)w-9 deal seems insulting.

What do you guys think?

I guess it all comes down to how you feel about it. Do you feel comfortable working for him knowing these things? Is it a life n death situation for you financially?
Personally I would take the job, it will net you some extra cash and right now thats all that really matters.

If hes doing shady stuff on his end and it doesnt effect you personally I wouldn't worry about it.

Its his problem. Also should anything go wrong etc, you have that as Ammo.

Just my opinion of course. Also help to fill that resume in a bit too.

Who cares what he does and you really do not know he will cheat on his taxes. You will still be able to collect some benefits and they will last longer because you worked a few weeks.

Also it keeps your resume fresh and just getting out and working does wonders for the mind. I say go for it.

He is avoiding paying payroll taxes doing it this way and saving himself a huge chunk of money. Also, it doesn't sound like you will be there for long, I thought there was a $600 limit on 1099 wages like this (that's probably gone up in the time I've been out of work). Also, there are certain restrictions on what defines an "employee". What this guy is doing sounds kind of shady.

If you do take it, you can pay a quarterly estimated tax to avoid getting hit next year.

I don't know what to tell you. I know you are stuck between a rock and a hard place with EB about to shut off in your state. Really sucks, people know we are desperate and will go to any means to save money when they need to hire people.

If it were me, I have to say I would take it. It would be money I could desperately use.

I am going on the faith that EB will be restored My problem with it is that if EB isn't restored I will not make enough from him to stay in my house anyway. If it is restored then working for him will cause problems with my benefits that I don't want to get into. I also read now that I will owe self employment taxes, my share and his share of medicare and social security, plus the amount owed on whatever he pays me. The job would last through the summer and he would probably stop using me after that so I would make more than the $600 limit.

I am open to whatever opinion anyone has.

thanks

The way he is doing it is setting you up as a "business" that is providing services for him. You will run into a lot of problems and paperwork with this and will owe all types of taxes as your own employer.

Can you afford to do that? You should really read further into the state and Fed. guidelines on this. It doesn't sound like it is worth it for $8 an hour, you will probably end up owing back everything you earned.

That was what I was thinking. I will owe more in taxes than I will make at the job while he skates away and pays no taxes at all.

ugh. I didnt realize that when you mentioned the tax form.. Seems shady to me now.
I would run it by him if you are friends and explain your situation to him. Im sure you can reach a deal.

Best of luck!

I hate to say it so bluntly, but this is another example of screwing people to make a profit while the good guys do the right thing and lose out.

Under those circumstances, no, I wouldn't take it. It will be one big headache for you with nothing to show for it.

Good luck. This is a tough one.

gettheminNOVEMBER wrote:Who cares what he does and you really do not know he will cheat on his taxes. You will still be able to collect some benefits and they will last longer because you worked a few weeks.

Also it keeps your resume fresh and just getting out and working does wonders for the mind. I say go for it.

lendme will still have to file taxes, and pay as an employer and an employee. It isn't worth it. Unless you want to get out of the house and do something, but there are better ways to volunteer your time other than working for someone who is basically cheating the system while making a bigger profit for themselves.

He is a friend of a friend. I honestly think that he believes we are stupid enough to not know what he is doing. Everyone will be hit by these taxes at the end of the year. I will lose a dollar an hour (more really) by paying both shares of medicare and social security. He is trying to treat me like a contract worker so I might offer a contract to him that I like and see if he takes it. He won't and that will solve the problem. I am not signing anything. I thought about filling out the form and putting an incorrect social security number on it so that when he tries to report the payment it won't be traced back to me. That kind of smells like prison though.

DesperateInRI wrote:

gettheminNOVEMBER wrote:Who cares what he does and you really do not know he will cheat on his taxes. You will still be able to collect some benefits and they will last longer because you worked a few weeks.

Also it keeps your resume fresh and just getting out and working does wonders for the mind. I say go for it.

lendme will still have to file taxes, and pay as an employer and an employee. It isn't worth it. Unless you want to get out of the house and do something, but there are better ways to volunteer your time other than working for someone who is basically cheating the system while making a bigger profit for themselves.

I would rather work for him occasionally in exchange for a reference than take this deal. The more I think about it the dirtier it sounds.


As far as whether he will cheat on his taxes or not, I don't really care. What I care about is having to pay taxes as an employer and an employee.

My suggestion is to let him know you know about this and see if he will find a work around. point out the hit you will take on this etc.

That's sort of my dilemma as well, I want to let him know BUT I don't want to piss him and make it sound like he is trying to screw me. He IS trying to screw me but I want to keep him as an ally. I thought about just telling him that I can't "freelance" for him under those circumstances.

This happened to me and my hubby some years back but with my Fathers company. When it come time to file taxes we were literally smoked with all the fee's we had to pay in. But the IRS seemed more interested in how we were considered "Self Employed" since the guidelines for self employment were not met. They sent us some paperwork to fill out. It had a bunch of questions on it. Like, who paid for the tools and/or provided them, who sat the hours, and what were the hours, who told you what to do and when to do it, etc.... Once I answered those questions and sent the form back in, my Father was hit was Employee not reported taxes.... Basically he was trying to save himself some money, at the same time he was killing our family with these taxes. And btw he was not paying us enough to even afford to work and pay taxes. So Daddy got mad, but it was a hard lesson to learn. We ended up getting a good sum of money back (EIC) but some of it was held out for our part of the taxes. Daddy paid in what he legally owed and then some and from there on out he did things legally.

You could plea out with the Government and tell them you just didn't know what he was doing when you were hired. Like we did (because we truly didn't know), and come tax season you call the IRS after you get your paperwork for filing and tell them you had no idea he was not going to pay in his share of the wage tax and that you were an employee since he was providing all the tools, hours, hourly wages (Not salary) and he was your boss and overseen your work daily. He will end up having to pay in his end of the taxes eventually. But it also might interfere with your friendship.

We had to do it that way because My daddy was looking after number 1 and that was himself. Sometimes we have to do what is right even if it means hurting the one we love to do this. But in the end Daddy thanked us for it. Of course he was mad at us for months. But later on he realized the hardship he was placing on us with three kids and trying to live on meager wages.

Just my experience with the same situation.

A 1099 or corp-corp is ridiculous at that hourly rate. I believe you also said you had some complications regarding benefits.

To be honest (or dishonest as I will seem), take the money under the table or move on. The IRS is currently very focused on 1099 workers and you won't have UI afterwards. Be a W2 worker or tell him nix on his scam.

I hope this helped, perhaps I'm wrong but there it is.

X, I think you are right. This is why I came on here, to ask people whose opinion I trust what they thought. Nearly everybody confirmed what I was thinking to begin with. The hourly rate isn't even enough to pay the taxes. I would lose a dollar per hour just paying both shares of medicare and social security.

I think I will just tell him my concerns and tell him I can't take it under the current circumstances without really getting into why unless he asks.

Unfortunately legitimate companies have been doing similar tactics like this for years. They advertise “be your own boss” when in reality you’re still only an employee under the guise of an independent contractor while you pay for all of their operating cost.

I answered an ad with a major courier service delivering medical specimens and live organs which had to be delivered within two hours. They had enrollment/training classes that solicited everything from buying their paperwork to dry ice. They forced you to buy uniforms and two way radios with air time among many other tools of their trade. Up to this point I was apprehensive but still willing to give it try until I heard the pay structure and performed some behind the scenes research of my own.
They promised a certain percentage for each delivery you made based on mileage and the urgency of delivery. They presented a pay chart showing what each delivery would pay. I latter found out from a current “independent contractor/sucker” lol, that the company offered major discounts to their clients so the commission/percentage you actually received were drastically lower. Now keep in mind you had to pay for your own gas which typically could be a tank per day. To make a long story short everyone enrolled in these classes not only never made any money but, it cost them money to delivery for this company. I latter discovered that this company had a fleet of full time regular employees/drivers and this “1099 Independent contractor business” was nothing more than a money making scam for them while they got silly things like tongue depressors and cotton swabs all delivered for free.

There are so many scams right now preying on the unemployed. I would report this company to my attorney general or other organization in your state that would investigate them. I know I was a victim of a Nigerian scam operation. I did not deposit any money as requested. I think it was a company I applied for on Craig's list. Anyway, I called an organization in Canada to report them. I have since taken my address off any resume I post online. It's important to do a lot of research on any company you apply for these days.

At this point, anything you think sounds to good to be true or sounds even slightly hinky, report it. Better Business Bureau, State Attorney General. They will respond with information regarding this for you. Right now, do not give ss# on internet applications, only in a personal interview. If you are asked for up front money for anything, including uniforms, take a pass.

Also, alot of commission only jobs = waste of your time. They are looking for your services for free and for any contacts you may be able to give. Particularly, insurance, home security, fire protection. Be careful of these especially. I have reported 2 of each in NJ just in my area.

Also, please, be careful in posting about under the table, collecting benefits. UFF2.0 cannot support falsifying income reporting for UE benefits. It is against the law to lie on your certifications weekly and can result in your loss of current benefits and fines.

Who's talking about falsifying income reporting? We are talking about whether it is worth $8 an hour to work under a 1099.