Re: small business

More | Report Post

On 7/18/07, Melissa wrote:
> We have a very small lawn maintenance business. 1-3
> employees who recieve 1099s at end of the year. Do we
> HAVE to get workers comp for them?...

1. People who work for a business doing what the business
does (e.g., gardeners in a gardening business) are generally
considered "employees" and NOT "independent contractors"
(IC). To be an IC, they have to be an "independent" business
that works for other companies.

2. Employees' wages must be reported and taxes paid.
Employees' wages should be reported with a W2, not a 1099.

3. The employer (business) owes these taxes regardless of
whether they provide the worker with a 1099 or not.

4. For additional guidance, search online for the IRS
guide: "Publication 1779, Independent Contractor or Employee
brochure"

good luck.