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1099 or not to 1099

Discussion in 'Commercial Snow Removal' started by KenP, Feb 27, 2003.

  1. KenP

    KenP Senior Member
    Messages: 197

    To 1099 or not to 1099 that is my question? Do you 1099 your subs? What if anything at all do you use as a basis. What is a fair wage to pay a sub, if you intend on 1099 them? As always any and all opinons will be thankful.
  2. Dockboy

    Dockboy Guest
    Messages: 0


    One, it's a little late! 1099's need to be to the receipient by Jan.31;)

    Two, you should, and can, 1099 any sub that you pay more than $600 total for that year. 1099 money is deducted from your gross on your taxes.

    Three, make sure you get a Certificate of Ins. from any sub you 1099. If not, when you do your Ins. audit, you will be liable for the income and your premium will go up!

    Hope that helps some,

  3. CMerLand

    CMerLand Senior Member
    Messages: 173


    Was great talking to you about the sub work down in Philly, seems you guys are getting more down south then we are only 30 miles north. Maybe we can work together if one hits you but somehow misses me.

    Anyhow, with regards to 1099s you have to get your terminology down correctly. You dont pay a sub a wage, you pay them there rate or quote that you agree on. Wage implies employees and thats a whole new ballgame. Others have posted a link to determine the difference between employee and sub.

    A sub will have his own truck, his own commercial insurance (ask for a copy showing proof of insurance) and be able to sell his services to anyone willing to pay his price. You then pay them their full rate X their hours worked, and take no taxes out of the check. All taxes are their responisibilty. If they work 10 hours at $ 75 bucks an you write them a check for $ 750.00 and mail them a 1099 before Jan 31 of next year. You just attribute the cost to your subcontractor account and are done with it.

    For amounts under $ 600 you dont even have to send them a 1099.

    Good Luck

  4. KenP

    KenP Senior Member
    Messages: 197

    It was good talking to you too, Like I said if you need a hand, shout. I know they have to be in by 31 Jan, so this would be for next year. Perhaps when I say a fair wage, rate etc., I'd be better saying fair to me. What would you guys think the going rate is for a sub, because we all 1099 them, right;)
  5. CPSS

    CPSS Senior Member
    Messages: 334

    Ken I noticed a little scarcasm in your post. Yes we do 1099 all subs. If you don't, or just pay them cash, you are their employer and are legally responsible for them. It seems in this business especially, there is a lot of liability exposure. I think you are asking for trouble by not doing things "by the book". The 1099 is to your advantage anyway. It allows you to deduct the full cost of the sub from your gross, thus reducing your tax burden.
  6. KenP

    KenP Senior Member
    Messages: 197

    I didn't intend to come accross with any sarcasm, I just thought the the replys were heading toward the direction of why we should 1099 people. Ergo a minor problem with the computer and interpetion. I personally 1099 everyone who works as a sub for me once they hit the amount required by Uncle Sam, infact my bookeeper's the one who tells who gets one and who doesn't. The primary goal of my post was see what the going rates are for subs these days. I should've been more descriptive in my first post, but it was early and I was tired. So let me start over.

    A) What do you pay your subs and how do you come up with that amount, i.e. V-plow, years of exp, willingness to work etc.?

    B) If you're are using a sub for a small job and you know you will not reach the amount set by Uncle Sam( maybe a truck breaks and you use a sub to clean up a job) Do you pay them a different rate?

    C) This is not a question as to the legal aspects of the 1099 process.

    Thanks again and my apologies to anyone who thought I was being sarcastic.

    JD PLOWER PlowSite.com Veteran
    Messages: 751

    Ken as far what we pay our subs it is partially based on equipment, experience, availability, but mostly its based on what the fair market value for your (our ) area is. The best way I've found to find this out is to ask potential subcontractors what they are expecting to be paid and go from there.

    As far as small or large Jobs go, its the same rate and its a minimum in terms of hours so we try and use our subs accordingly. For instance we bill all stacking and removal at 4 hours regardless if it takes less, so we pay at four hours. Hope this helps.
  8. phillyplowking1

    phillyplowking1 Senior Member
    Messages: 412

    We also pay our subs based on equipment.
    Pickup-$60 per hour
    Backhoes- $125-$150
    Last edited: Feb 27, 2003
  9. asphalter1

    asphalter1 Junior Member
    from 08527
    Messages: 24

    Ken..I pay my subs yhe following: pick ups 65.00 per hr
    single axles 90.00
    backhoes 125.00

    and the bigger the loader the more $
  10. captbo

    captbo Senior Member
    Messages: 112

    Dockboy has the answer, set them up as 1099 first!, Bo