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Unemployment Benefits and Self Employed

Discussion in 'Business Fundamentals' started by shooterm, Dec 8, 2010.

  1. shooterm

    shooterm Senior Member
    from Midwest
    Messages: 260

    I kinda have it figured out how works in order to get legally payed benefits and being self employed. My question is can I pay myself minimum wage(actually any wage is my edit) and claim that as a portion of my wage? I work through the year for another outfit in construction and would still be available for work on off snow hours for loading/hauling snow. Just wondering because I have some flexiability here and would rather do it the "right" way but also make more money then my unemployment without drowning myself my first year. Thanks for any input.
     
  2. Rc2505

    Rc2505 PlowSite.com Addict
    Messages: 1,245

    The only right way to do it is to claim what you make. They (unemployment) will then deduct that amount from your benifits and they will send a check for the difference. Any other way you do it is considered fraud. So that being said it's you that has to live with yourself and pay the penalties if you get caught commiting fraud.
     
  3. Plow Babe

    Plow Babe Senior Member
    Messages: 218

    I'm not sure if I'm completely understanding your question.

    If you are asking if you can collect unemployment from yourself, you would need to be an employee of your business, meaning you have completed an I9 and W4, pay yourself regularly via payroll check with taxes withheld, and your business entity pays unemployment taxes. You would need to have a set pay rate, for example a salary of X per week or wage of X per hour. The rules probably vary by state, but my understanding is that if an employee's hours or pay rate are reduced, then that employee is eligible for unemployment benefits.

    Call your state unemployment office and ask them. You should be able to get information without giving them your name or anything.
     
  4. shooterm

    shooterm Senior Member
    from Midwest
    Messages: 260

    Just a example I plow a Burger King for $100 on thursday. Next week I claim $100 from snowplowing?:eek:. I'm confused on this because of course I'm not making $100 on Burger King.
     
  5. shooterm

    shooterm Senior Member
    from Midwest
    Messages: 260

    Yes I was wondering about paying myself. The unemployment lady was confused and stated its the same money as either being contracted out or plowing for another company. Both of those numbers are completely different price levels.
     
  6. shooterm

    shooterm Senior Member
    from Midwest
    Messages: 260

    Nevermind I think I know what shes talking about when shes said plowing for another company.
     
  7. jomama45

    jomama45 PlowSite.com Addict
    Messages: 1,172

    I think I understand your situation here, and although I've dealt with UC from both sides for many years, I can't say I know the answer. But, do you plan on going back to work for the previous employer, or is this winter the start of yourself going out on your own?? I'd be careful with claiming UC if you're leaving the employer, and they know that you're plowing. They will receive a mailing every week that you claim.

    In all honesty, just starting out, I'd look for a good local accountant. They will have answers to everything you will encounter pertaining to this, and will prove to save you more than they will cost you. Good luck.
     
  8. Rc2505

    Rc2505 PlowSite.com Addict
    Messages: 1,245

    No I am not saying at all you claim the whole 100 dollars as wages, but I am saying if you try and pay yourself minium wage but your collecting 100 dollars for the service you provided, you would be commiting fraud. I know you don't want to hear this, but figure out your actual costs. Once you have those figured out, claim everything above and beyond that as income. Almost every state has toll free tip lines to report UC fraud. If you get caught it won't be worth the extra few dollars you will have gained from not being honest.
     
  9. shooterm

    shooterm Senior Member
    from Midwest
    Messages: 260

    I called again today to clear it up. I'm trying to avoid fraud with unemployment thats why I'm asking questions. Basically I still have to work with my employer if called(not a problem we work after the events very flexiable). Also I can deduct my costs but must claim profits. I must also claim assumed profits for the week if snowplowing even if I invoice at the end of the month. The lady surprised the crap out of me very friendly and informed(she must get alot of these questions). I'm not plowing this year for myself just trying to plan for the next winter. With any luck in a few years I wont have to hassle with unemployment benefits.
     
  10. jomama45

    jomama45 PlowSite.com Addict
    Messages: 1,172

    Thanks for following up, that's interesting to know the approach. I was curious if they would consider the income at time of service or time of payment. :salute: