you should not include materials in a 1099-misc

Small business owners must keep track of the different annual tax filings submitted each season. 1099-MISC, 1099-NEC, and more all require different information, however, they all work together to complete your business’ annual tax file.

Let’s discuss the 1099-MISC, and if businesses should file materials under this form.

a 1099 independent contractor is considered self-employed so they cannot collect unemployment benefits

In short, 1099 independent contractors cannot collect unemployment. They do not qualify because of their self-employment status – meaning their employment status technically never changed because they were never employed by someone.

have a coi in place to make sure your independent contractor is covered in case of injury

When performing a job, there is a possibility for injury. A roofer could slip and fall off a roof, a plumber could injure themselves fixing your pipes, the list goes on.
What happens if you hire an independent contractor, otherwise known as a gig worker, who is injured while working on your project?
So, let’s answer the question: What happens if my gig worker gets injured on the job?

create the right independent contractor agreement when working with 1099 independent contractors

Using independent contractors to assist with your day-to-day business functions is becoming increasingly popular. Before you look to hire contractors, it is important to understand what should be included in the contractual agreement. This helps keep your business safe from legal trouble in the future.

A W-2 employee is someone whose work is controlled by the employer in terms of what they do, when they work, how they are paid, the equipment they use (provided by the employer), and how they report.

Depending on the state you live in, and the employer policies, part-time workers may not be eligible for the same benefits as full-time employees. While the benefits they must be offered differ based on their hours, that difference does not relate to their classification as a 1099 vs a W-2. Misconceptions persist regarding employment classification of part-time vs full-time vs contract or project-based workers. Following is an explanation and clarification of why a part-time worker can be a w-2 employee.

California CPA's can help their clients reduce an EDD audit risk by asking the right questions

Certified Public Accountants (CPAs) have the most insight into their business owner clients’ daily transactional history. In this role, you may find that your business owner clients have 1099 contractors who are in the grey area of worker classification now that classification was redefined by AB-5 in January 2020.

A got1099 report helps business owners correctly classify workers and employees and avoid government fines and penalties

The California Employment Development Department (EDD) is a government agency that provides unemployment benefits, collects and audits payroll taxes, and maintains California employee records. With the new AB-5 regulations, there are stricter worker classification rules. Now, workers are only classified as independent contractors if they meet all three criteria of the ABC test.

Hire an independent contractor and comply with California law to avoid triggering an EDD Audit

Hire an independent contractor and comply with California law to avoid triggering an Employment Development Department (EDD) audit. Following the steps below does not guarantee that your contractor will still remain a contractor if you are audited by EDD. However, there are ways you can strengthen your position and not have your contractors reclassified as employees.

Dynamex reclassified their W-2s as 1099s, stripping employee benefits. The Supreme Court ruled this unconstitutional and implemented the ABC test.

Dynamex was a nationwide same-day delivery and courier service. They employed their California drivers as W-2 employees who received the benefits, payroll taxes, and perks of being a W-2 employee. Then in 2004, the company reclassified all of its California drivers into 1099 independent contractors to save employee costs.

The ABC test is now used to classify workers instead of the Borello Test

The California Employment Development Department (EDD) uses the new Assembly Bill 5’s ABC test to identify worker classification. However, the older Borello Test can also be used in less clear classification circumstances.

When it comes to correctly classifying your workers, how do you know which test to use and when?