# 1099 Tax Question **URL:** \ **Category:** Factual Questions\ **Created:** [November 16, 2005, 5:20pm UTC](https://boards.straightdope.com/t/1099-tax-question/331340 "2005-11-16T17:20:35Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![mswas](https://avatars.discourse-cdn.com/v4/letter/m/e99b99/32.png) [@mswas](https://boards.straightdope.com/u/mswas)\ **Post date:** [November 16, 2005, 5:20pm UTC](https://boards.straightdope.com/t/1099-tax-question/331340/1 "2005-11-16T17:20:35Z")
I have a tax question from the Employer’s perspective. We’ve hired a few 1099 laborers, and we are wondering what our tax burden will be. I am under the impression that we need not pay any taxes on those laborers because we needn’t withhold tax. In my experience as a 1099 worker, the worker is responsible for the tax burden. Am I correct on this? Are there any hidden taxes? Erek ---
**Author:** ![RealityChuck](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/realitychuck/32/195_2.png) [@RealityChuck](https://boards.straightdope.com/u/RealityChuck)\ **Post date:** [November 16, 2005, 6:32pm UTC](https://boards.straightdope.com/t/1099-tax-question/331340/2 "2005-11-16T18:32:55Z")
Assuming they are legitimate outside contractors, you just have to send a 1099 form to the IRS and to employees who made over a certain amount ($600? I don’t recall offhand) during the year. They are liable for the taxes. ---
**Author:** ![Bill\_The\_Cat](https://avatars.discourse-cdn.com/v4/letter/b/ba8739/32.png) [@Bill\_The\_Cat](https://boards.straightdope.com/u/Bill_The_Cat)\ **Post date:** [November 16, 2005, 6:44pm UTC](https://boards.straightdope.com/t/1099-tax-question/331340/3 "2005-11-16T18:44:36Z")
> [@mswas](#): > > In my experience as a 1099 worker, the worker is responsible for the tax burden. In my experience as a 1099 worker, that is the case as well. I don’t know whether the company withheld any benefits while I was working (i.e. Social Security taxes, etc.) but there were certainly no federal or state taxes withheld and I had to fill out the 1040 rather than the 1040-EZ because of the 1099. ---
**Author:** ![ombre3](https://avatars.discourse-cdn.com/v4/letter/o/da6949/32.png) [@ombre3](https://boards.straightdope.com/u/ombre3)\ **Post date:** [November 18, 2005, 4:42pm UTC](https://boards.straightdope.com/t/1099-tax-question/331340/4 "2005-11-18T16:42:46Z")
I’ve had to file a 1099 for one of my jobs for the last couple of years–and pay taxes on it. One thing I have done is to deduct mileage to and from the job site. At 37 and 1/2 cents a mile (if I remember right). Mileage is pretty far —almost 80 miles round trip, so it is a noticeable deduction. And big difference in what I have to pay in taxes. Somebody told me recently that mileage to and from the job is not an allowable deduction on a 1099. That if I wanted to claim it I would have to make it my 2nd stop. (1st stop to pick up supplies would work, just keep receipts for something, anything you bought, to help you on the job, to prove that the longer mileage was the 2nd stop and therefore allowable). The IRS hasn’t questioned me about simply taking my mileage off for the last 2 years-----but maybe they aren’t paying attention and will eventually tell me I was mistaken and I owe them big bucks in back taxes. I have nothing against stopping at a store nearby and buying some simple item that I might need on the job from now on and save receipts. I do have to wear hearing protection on the job. I could make my first stop 1 mile away to buy disposable ear plugs for a $1 and then count the rest of my mileage as deductable. Should I? Or was whoever told me that I had a disallowable deduction full of it? ---
**Author:** ![BobT](https://avatars.discourse-cdn.com/v4/letter/b/8e8cbc/32.png) [@BobT](https://boards.straightdope.com/u/BobT)\ **Post date:** [November 18, 2005, 4:56pm UTC](https://boards.straightdope.com/t/1099-tax-question/331340/5 "2005-11-18T16:56:45Z")
You should read the IRS publications on this. You can’t deduct mileage if you are commuting to “your regular place of work”. But who’s to say what the regular place is. Sounds like you don’t have a regular place of work. ---
**Author:** ![ombre3](https://avatars.discourse-cdn.com/v4/letter/o/da6949/32.png) [@ombre3](https://boards.straightdope.com/u/ombre3)\ **Post date:** [November 18, 2005, 5:08pm UTC](https://boards.straightdope.com/t/1099-tax-question/331340/6 "2005-11-18T17:08:34Z")
Nope- ----I am semi-retired and work 3 different part time jobs (about 20 hours a week total) for a little extra income. Over 62 and on SS and have to be careful not to make over $12000 a year. 2 of my jobs are regular jobs with normal withholding. The job I have to file a 1099 on as an independent contractor is a one day a month job. If I lost that mileage deduction, that job probably wouldn’t be worthwhile doing. Long drive. I doubt the IRS would get too picayune with me. But, in case they should, I could “buy supplies” on the way to the job site. ---
**Author:** ![ShibbOleth](https://avatars.discourse-cdn.com/v4/letter/s/848f3c/32.png) [@ShibbOleth](https://boards.straightdope.com/u/ShibbOleth)\ **Post date:** [November 18, 2005, 5:31pm UTC](https://boards.straightdope.com/t/1099-tax-question/331340/7 "2005-11-18T17:31:57Z")
> [@mswas](#): > > Am I correct on this? Are there any hidden taxes? > > Erek Might be if you didn’t pay them enough to earn minimum wage. Or if they otherwise don’t meet the rules to make them eligible 1099 subcontractors. ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [November 18, 2005, 6:00pm UTC](https://boards.straightdope.com/t/1099-tax-question/331340/8 "2005-11-18T18:00:49Z")
I send out 1099 misc forms to freelance contributors every year. I need to do so only if their yearly earnings are $600 or more. I don’t have any other tax burdens or obligations beyond reporting this to the IRS. That I know of, that is. In case the IRS is monitoring this. 🙂 ---
**Author:** ![gigi](https://avatars.discourse-cdn.com/v4/letter/g/a587f6/32.png) [@gigi](https://boards.straightdope.com/u/gigi)\ **Post date:** [November 18, 2005, 6:27pm UTC](https://boards.straightdope.com/t/1099-tax-question/331340/9 "2005-11-18T18:27:23Z")
> [@ombre3](#): > > The job I have to file a 1099 on as an independent contractor is a one day a month job. > > If I lost that mileage deduction, that job probably wouldn’t be worthwhile doing. Long drive. > > I doubt the IRS would get too picayune with me. But, in case they should, I could “buy supplies” on the way to the job site. I am not a tax person of any stripe, but I believe you can deduct all the mileage because you wouldn’t be going there at all if you weren’t working. A friend who is his own business deducts a percentage of his truck mileage for the year based on a good estimate of how much is for business driving. As yes, the employer just needs to report the earnings of contractors who make over $600; the contractor assumes all liability for paying FICA and Medicare taxes. ---
**Author:** ![ombre3](https://avatars.discourse-cdn.com/v4/letter/o/da6949/32.png) [@ombre3](https://boards.straightdope.com/u/ombre3)\ **Post date:** [November 18, 2005, 6:37pm UTC](https://boards.straightdope.com/t/1099-tax-question/331340/10 "2005-11-18T18:37:45Z")
Sounds good to me. Will stop worrying about it. I think the IRS would have picked up on it if I was doing anything wrong------since I was very straightforward about my deduction for mileage to job site on the 1099 and the other form that went with it (forget what that form is right now). If the IRS decides I was in error the past 2 years--------will just have to pay back taxes is all. Wasn’t looking forward to making a special trip to a drug store on the way to the job just to get one set of throw away ear plugs and a receipt for same. (You can buy them 12 to a pack)---------which is what I do. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [November 18, 2005, 6:41pm UTC](https://boards.straightdope.com/t/1099-tax-question/331340/11 "2005-11-18T18:41:45Z")
> [@gigi](#): > > A friend who is his own business deducts a percentage of his truck mileage for the year based on a good estimate of how much is for business driving. This is not allowed. To take a mileage deduction, you must keep a daily log of business miles, and the business reason for each trip. ---
**Author:** ![missbunny](https://avatars.discourse-cdn.com/v4/letter/m/76d3ee/32.png) [@missbunny](https://boards.straightdope.com/u/missbunny)\ **Post date:** [November 18, 2005, 8:00pm UTC](https://boards.straightdope.com/t/1099-tax-question/331340/12 "2005-11-18T20:00:34Z")
> [@](#): > > I am not a tax person of any stripe, but I believe you can deduct all the mileage because you wouldn’t be going there at all if you weren’t working. I don’t go to my job either if I’m not working! How is this guy any different? A friend who is his own business deducts a percentage of his truck mileage for the year based on a good estimate of how much is for business driving. [/quote] He has gotten away with it but **Fear** is right: estimates are not allowed. You have to keep an exact calculation of the miles to, from, and reason. “Commuting to one’s regular place of business” is not a reason. You (general you) can drive to work at Point A and then drive to Point B and deduct the mileage for the distance from Point A to B, and then to return to Point A, but you can’t deduct the mileage to or from home. If your friend is audited, he’ll have to provide documentation for all his mileage deductions or the IRS will disallow them and assess back taxes, and probably penalties. For anyone who is concerned, you should probably ask a tax accountant. ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [November 18, 2005, 9:37pm UTC](https://boards.straightdope.com/t/1099-tax-question/331340/13 "2005-11-18T21:37:01Z")
> [@Fear Itself](#): > > > [@](#): > > > > Originally Posted by gigi > > A friend who is his own business deducts a percentage of his truck mileage for the year based on a good estimate of how much is for business driving. > > This is not allowed. To take a mileage deduction, you must keep a daily log of business miles, and the business reason for each trip. What **gigi’s** friend does is exactly what I do and what my tax preparer, a professional specializing in small businesses and freelancers and who is a CPA, recommends. ---
**Author:** ![ombre3](https://avatars.discourse-cdn.com/v4/letter/o/da6949/32.png) [@ombre3](https://boards.straightdope.com/u/ombre3)\ **Post date:** [November 19, 2005, 1:41am UTC](https://boards.straightdope.com/t/1099-tax-question/331340/14 "2005-11-19T01:41:02Z")
> [@missbunny](#): > > I don’t go to my job either if I’m not working! How is this guy any different? > > A friend who is his own business deducts a percentage of his truck mileage for the year based on a good estimate of how much is for business driving. He has gotten away with it but **Fear** is right: estimates are not allowed. You have to keep an exact calculation of the miles to, from, and reason. “Commuting to one’s regular place of business” is not a reason. You (general you) can drive to work at Point A and then drive to Point B and deduct the mileage for the distance from Point A to B, and then to return to Point A, but you can’t deduct the mileage to or from home. If your friend is audited, he’ll have to provide documentation for all his mileage deductions or the IRS will disallow them and assess back taxes, and probably penalties. For anyone who is concerned, you should probably ask a tax accountant. [/QUOTE] Now I’m confused. Back to plan A for me and start buying a cheap “supply” on the way to my job site? Of course, for me, this is just a one day a month job among other part time jobs---------so it doesn’t sound like a regular job to me. Maybe I’m off the hook. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [November 19, 2005, 1:49am UTC](https://boards.straightdope.com/t/1099-tax-question/331340/15 "2005-11-19T01:49:22Z")
> [@Exapno Mapcase](#): > > What **gigi’s** friend does is exactly what I do and what my tax preparer, a professional specializing in small businesses and freelancers and who is a CPA, recommends. It looks like the [current IRS policy](http://www.irs.gov/publications/p463/ch05.html#d0e6494) is somewhere between what I said, and what you said: > [@](#): > > You use your car to visit the offices of clients, meet with suppliers and other subcontractors, and pick up and deliver items to clients. There is no other business use of the car, but you and your family use the car for personal purposes. You **keep adequate records during the first week of each month** that show that 75% of the use of the car is for business. Invoices and bills show that your business use continues at the same rate during the later weeks of each month. Your weekly records are representative of the use of the car each month and are sufficient evidence to support the percentage of business use for the year. If you have no records of your business mileage, and have no way to substantiate your claim of business mileage, do you seriously think the IRS will allow this deduction based solely on your estimate? ---
**Author:** ![gigi](https://avatars.discourse-cdn.com/v4/letter/g/a587f6/32.png) [@gigi](https://boards.straightdope.com/u/gigi)\ **Post date:** [November 19, 2005, 4:58am UTC](https://boards.straightdope.com/t/1099-tax-question/331340/16 "2005-11-19T04:58:26Z")
> [@missbunny](#): > > I don’t go to my job either if I’m not working! How is this guy any different? Again, IANATA, but you aren’t claiming to be an independent contractor. It’s one of the distinctions [made](http://kindsvater.com/employ/mileage.html): \<\\> ---
**Author:** ![gigi](https://avatars.discourse-cdn.com/v4/letter/g/a587f6/32.png) [@gigi](https://boards.straightdope.com/u/gigi)\ **Post date:** [November 19, 2005, 4:59am UTC](https://boards.straightdope.com/t/1099-tax-question/331340/17 "2005-11-19T04:59:39Z")
Sorry, just to clarify that the guidelines above are for regular employees, not 1099 contractors. ---
**Author:** ![What\_the](https://avatars.discourse-cdn.com/v4/letter/w/f4b2a3/32.png) [@What\_the](https://boards.straightdope.com/u/What_the)\ **Post date:** [November 19, 2005, 5:26pm UTC](https://boards.straightdope.com/t/1099-tax-question/331340/18 "2005-11-19T17:26:29Z")
Here’s a link to info on whether someone qualifies as an IC in the first place: [http://www.synergistech.com/20qs.htm](http://www.synergistech.com/20qs.htm) ---
**Author:** ![ombre3](https://avatars.discourse-cdn.com/v4/letter/o/da6949/32.png) [@ombre3](https://boards.straightdope.com/u/ombre3)\ **Post date:** [November 19, 2005, 5:41pm UTC](https://boards.straightdope.com/t/1099-tax-question/331340/19 "2005-11-19T17:41:55Z")
> [@What the .... ?!?!](#): > > Here’s a link to info on whether someone qualifies as an IC in the first place: > > [http://www.synergistech.com/20qs.htm](http://www.synergistech.com/20qs.htm) Fascinating 20 questions. I could answer most of them (but not all of them) the “proper” way to be considered an independant contractor. I think if ALL the questions had to be answered “properly” -------there would be almost no independent contractors in this country. I hope my employer (sorry, not my actual employer, but the company that wants me to do a job for them and pays me for that) knows what he is doing. Am almost certain the IRS doesn’t know what it is doing. ---
**Author:** ![Mama\_Zappa](https://avatars.discourse-cdn.com/v4/letter/m/71e660/32.png) [@Mama\_Zappa](https://boards.straightdope.com/u/Mama_Zappa)\ **Post date:** [November 19, 2005, 6:13pm UTC](https://boards.straightdope.com/t/1099-tax-question/331340/20 "2005-11-19T18:13:57Z")
> [@What the .... ?!?!](#): > > Here’s a link to info on whether someone qualifies as an IC in the first place: > > [http://www.synergistech.com/20qs.htm](http://www.synergistech.com/20qs.htm) The IRS also has publications that deal with determining whether someone is a contractor vs. an employee; the reporting requirements are different, as are the withholding. [http://www.irs.gov/govt/fslg/article/0,,id=112718,00.html](http://www.irs.gov/govt/fslg/article/0,,id=112718,00.html) Also Publication 15 (employer’s tax guide): [http://www.irs.gov/publications/p15/ar01.html](http://www.irs.gov/publications/p15/ar01.html) The day laborers would, I imagine, qualify more as employees than contractors. They work at your location, explicitly at your direction, presumably using your materials… Your requirements for reporting for them (and calculating/withholding FICA and Medicare taxes) are, IIRC, based on how much you pay them in a calendar quarter. You might be required to pay unemployment taxes also, again probably based on an earnings threshold.