Independent contractor or employee?

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hellsangle
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Independent contractor or employee?

Post by hellsangle »

Interesting article in POB:

http://www.pobonline.com/Articles/Colum ... 0001079839

Personally, I believe that as a Profession . . . when we employ someone as an employee why shouldn't we be "professional" and pay into the "system"? Those that do not - are not funding the retirement system - nor Medicare. (Who will certainly "take" that benefit when they hit 65!)

Some of us are competing with those that do not feel they should pay into the "system" and treat all as Independent Contractors/Subcontractor.

As Mr. Lucas said . . . your employee, er, I'm sorry, subcontractor had better be very happy with your relationship . . . or he/she may file a "SS-8" form with the IRS. Then the IRS might come looking for 941 taxes, etc.

. . . Ceasar doesn't care if your philosphy does not coincide with Federal Law . . . Ceasar's hungry and lookin' for flesh.

Too many "takers" and we'll run out of "give" . . .

Crazy Phil - today
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land butcher
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Post by land butcher »

I have noticed a lot of CE jobs stating that its a 1099 position.

Very thin line here, esp if the CE is using their office, desk, computer etc. But in addition to the tax savings they can terminate the CEs services at any time.

If you do work this way for even a few years it won't effect your SS/Medicare amount as you only need 40 quarters to be fully covered. What does effect your monthly SS check is if you take a early or late retirement.
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Post by Anthony Maffia »

hellsangle said:
... are not funding the retirement system - nor Medicare. (Who will certainly "take" that benefit when they hit 65!)

Untrue. Independent contractors file as "self employed" and pay medicare and social security taxes, both the employee and employer portions. The same percentages. The government gets the same exact dollars, just from a different source.

The idea that Caesar is hungry and isn't getting his fair share of taxes is ridiculous - he gets more from self employed persons, because their hourly wage and thus yearly income is higher, and they have to pay for their insurance with post-tax dollars. Employees get non-taxable benefits, and a lower yearly wage lowers their income taxes.
- Anthony Maffia, LSIT
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Post by Anthony Maffia »

All contract employees are self employed - either they have an employer or they do not.

They all get 1099-MISC, file Sch C, and 1040 (not EZ) and pay SE taxes, which is medicare & ss and is the same percentage as employer taxes & employee medicare/ss deductions. I have an accounting background as well as engineering.

Medical expenses can be deducted when they exceed 7.5% of your income. As I'm not a part of an insurance group, my policy would be $1500 for my family, and is not deductible by self-employed persons (yet, I don't know if this changes under Obama-care.)

I agree with your other points, and mean no disrespect.

I'm stuck in independent contractor land for now, working here and there for many different surveyors drafting from home. I'm certain my status is valid, and comments like those by hellsangle become personal.
- Anthony Maffia, LSIT
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Jim Frame
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Post by Jim Frame »

"Medical expenses can be deducted when they exceed 7.5% of your income. As I'm not a part of an insurance group, my policy would be $1500 for my family, and is not deductible by self-employed persons (yet, I don't know if this changes under Obama-care.)"

It's been deductible for some years now as the "Self-employed health insurance deduction," Form 1040 line 29. It comes right off the top. Last year it reduced my adjusted gross income by $15,830.00.

.
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Anthony Maffia
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Post by Anthony Maffia »

Thanks Jim. My father-in-law prepared my 2009 & 2010 taxes, and I didn't see that change. Before, I always did my own taxes.
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Jim Frame
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Post by Jim Frame »

"The difference being, as a business owner I am responsible for a yearly business license"

The same applies to a sole proprietor working on contract to another surveyor. He may choose not to pay it, but that doesn't mean he's not legally obligated to pay it.


"sales tax on items purchased out of state via the internet"

The same applies to the sole proprietor and to every other citizen of California. They may choose not to pay it, but that doesn't mean they're not legally obligated to pay it.


"filing taxes as business which includes $800 per year to the state to be a business entity"

Sole proprietors have to file a tax form too: Schedule C. Choosing a different type of business entity that requires an additional annual expense is a matter of choice, one that presumably enhances the bottom line. Those of us who chose to structure our businesses as sole proprietorships aren't obligated to pay corporate license fees.


"carrying payroll for a hired helper (which includes nannies if you have one)."

Again a choice, and one that I made. No one's twisting my arm to employ people, I do it to increase efficiency and net profit.


"Self-employed people, in the context I am referencing, do not get 1099 forms; rather, they send a W-9 with a Federal Tax ID."

Not sure to what the context is here, but sole proprietors submit W-9s to their clients and get 1099s in return. They may choose not to do so, but that doesn't mean they're not obligated to do so.


"We register our vehicles in the company name which means we have to carry general liability insurance in addition to our auto insurance"

Not sure what's being referenced here, but any prudent sole proprietor would carry auto and general liability coverages. This is one area that "contract employees" often choose to gloss over, but they do so at their own risk. Going bare saves a bunch of money, until it costs even more money.

In general, the only substantive differences I see result from choosing a business structure and choosing to play by the rules or not.

.
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Post by Jim Frame »

Same thing. It's all about playing by the rules.

.
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hellsangle
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More "education" . . .

Post by hellsangle »

For those that think the Independent contractor is a "sure" thing . . .
better read today's SF Chronicle on this issue. It ain't no joke, boyz 'n girlz.
Hopefully one does not have poor employees and/or competitor relations.

Phil - Sonoma

http://www.sfgate.com/cgi-bin/article.c ... 1LDNU3.DTL
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hellsangle
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Copyright concerns, too! (NOT LEGAL ADVISE!)

Post by hellsangle »

Oh dear . . . the abstract things you learn when you consult with a copyright attorney:

Independent Contractors may have copyrights . . .

i.e. draftsperson, etc . . . their work is copyrighted if they are a Independent Contractor. Layout, size of text, fonts, etc. their work, non?

Employee = not so copyright belongs to employer.

(but don't believe me - check with a competent attorney.)

Have a wonderful Fall weekend!

Phil - Sonoma
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land butcher
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Post by land butcher »

Whether or not you have a business license in the city your home/office is in, when you work in another city they want you to buy their business license also.

One company I worked for had a big job in the south bay area and one of those cities required a BL for every one of their vehicles that entered the city.

A OC city has huge fees for professional companies, IIRC around 1995 a BL for me to const stake a small building expansion was ~$1800.00. Really knocks any profit out of the staking job. Fees for; each professional, each employee, each vehicle, etc.

Another city over that way told me I could not set a tripod on the sidewalk if it left less than 4ft HC clearance. Admirable, but I then pointed out the nearby 50ft high utility poles that left less than 3ft of clearance and asked who I report that to.
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Ian Wilson
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Post by Ian Wilson »

As I recall, there is a provision to NOT have to pay business license fees in any other location than you primary office (or offices).

Does anyone have the citation for that?
Ian Wilson, P.L.S. (CA / NV / CO)
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Jim Frame
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Post by Jim Frame »

"i.e. draftsperson, etc . . . their work is copyrighted if they are a Independent Contractor. Layout, size of text, fonts, etc. their work, non?"

Generally speaking, no. Most survey maps (ROS, topo, ALTA and the like) represent existing conditions. You can't copyright that.

I'm not offering legal advice either, but I did considerable research on this subject while trying to find a way to get to a deadbeat client who used my ALTA without payment. I even got an explicit copyright on the map, but subsequently learned that a court would almost certainly refuse to recognize the copyright due to the nature of the content. Absent a particularly novel presentation -- a style unlike any other in the profession and one of such substance that it can readily be recognized as a work of art in itself -- there's nothing about a survey map that's subject to copyright.

.
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dmi
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Jerry Broadus

Post by dmi »

Perhaps Mr Broadus may have some useful advice,being both an attorney and a licensed surveyor. It is odd that a Pharma company can own YOUR DNA sequence,(talk about existing condition)yet a surveyor is not allowed to own the intellectual of their own survey. I would agree that there is no hope if you allow and buy into the argument that the survey represents ONLY existing conditions. I suggest that the survey represnts your OPINION of the existing conditions as you find them and these conditions are presented in a form that is unique to your firm. To be useful, your opinion had better reflect accurately the facts of the existing conditions. So, it may well be the case that copyright is unenforcable, but contract provisions ought to hold up in court. A statement that is agreed to by the client that the surveyor owns their maps, and notes and workproduct,that the work product represents intellectuial property and that the client agrees to use it only for the agreed upon purpose, ought to help you with demands for payment and to restrict unauthorized uses and to collect additional fees, in the event the data is put to other uses beyond what has been agreed to in the client/consultation agreement.
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Post by Jim Frame »

"A statement that is agreed to by the client that the surveyor owns their maps, and notes and workproduct,that the work product represents intellectuial property and that the client agrees to use it only for the agreed upon purpose, ought to help you with demands for payment and to restrict unauthorized uses and to collect additional fees, in the event the data is put to other uses beyond what has been agreed to in the client/consultation agreement."

In the referenced case I already have a court judgment against my former client, but he turned out to be judgment-proof. I was trying the copyright angle as a means of putting the bite on some other companies with whom he's been doing business, but dropped the effort as futile after doing the research.

.
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Lee Hixson
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Post by Lee Hixson »

Dane...

I agree with you all the way: "I would agree that there is no hope if you allow and buy into the argument that the survey represents ONLY existing conditions. I suggest that the survey represnts your OPINION of the existing conditions as you find them and these conditions are presented in a form that is unique to your firm. To be useful, your opinion had better reflect accurately the facts of the existing conditions."

Seems like my last 3 surveys are especially telling in this respect. Ironically, all 3 of them speak volumes when it comes to the creative, personalized effort that I've put into them. I can guarantee you that they represent a dedicated, unique professionalism that reflects the experience and wisdom gained from over 30 years of work in this part of California. To engage in any sort of exercise that attempts to minimize my efforts...that attempts to homogenize them as merely "reflecting existing conditions" is not just an affront to me, but to my profession in general.
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"Brevity without uncertainty or ambiguity"
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land butcher
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Post by land butcher »

To be able to copyright a survey map would have to exclude recorded maps. And at what point does a ALTA become public with the client, seller, buyer, Title co, lawyers all reviewing it.

Unfortunately times like this seems to spawn deadbeats, more so than when work is good.

Years ago a prominent businessman told me, the client that doesn't want to pay a substantial deposit isn't planning on paying for the service.

I have even had a 6 year client get into money trouble unbeknown to me and thanks to corporate protection stiff me. I eventually got the owner of the property to pay me most of what I was owed since they were holding money from the contractor.
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