What exactly can be done if you receive a 1099-MISC as a subcontractor when you think you should receive a W-2 as an employee? Receiving a 1099-MISC is not always a negative, but as my discussion of last week pointed out, we just have to say the tax implications are immense. But, regardless of the tax consequences, does the Internal Revenue Service have a procedure to follow if you are convinced that you should have received a W-2? The answer is yes. It is a common problem, because it is almost always advantageous to a payer to report payments made to someone as a subcontractor instead of an employee. Why is it more advantageous to call a recipient a subcontractor and not an employee? First, payments to an employee are subject to a matching Social Security and Medicare tax of 7.65%. Payments to a subcontractor are not subject to this 7.65%, so the payer instantly adds 7.65% to his bottom line. Second, payments to an employee are subject to federal and state unemployment tax. The federal unemployment tax rate is normally 0.8% of the first $7,000 of wages, or $56 per person. Since Michigan owes the federal government billions of dollars, there is a 0.3% surcharge, or $21, added for the year of 2009. Michigan unemployment rates are variable, but a new business will pay 2.7% of the first $9,000, or $256. The maximum rate is 11%, so $256 could be very low. Payments to subcontractors are not subject to these two taxes. This adds a few more hundred dollars to the bottom line. Third, payments to subcontractors are not subject to workman’s compensation insurance. For construction employers, that rate of insurance could be as high as $30 per thousand of payroll. Fourth, employees are quite often covered by those items called fringe benefits. They might be covered by health insurance, receive paid vacation and personal time off, receive time-and-a-half pay for hours worked over 40, be paid a premium amount for working on weekends and holidays, receive an automobile as part of their compensation package, and be paid for continuing training, etc., etc. A subcontractor receives none of these benefits. Fifth, the employer might have some type of retirement plan set up. An employee […]
February 4 2010
Reader thanks Craig James Dear Editor, I would like to thank Mr. Craig James for casting some light onto the activities of the Intergovernmental Panel on Climate Change (IPCC). It is nice to know when the public is being manipulated. It’s disconcerting to hear that a world-renowned and respected authority on climate change admits to publishing claims “purely to put political pressure on world leaders.” With all of the speculation today about global warming and climate change, it would be nice to find a reliable and even honest source for factual, creditable and scientifically supported information, free from political slant and ulterior motives. Due to recent misleading statements and invalid claims, the IPCC clearly does not fit the bill. Molly Mueller, Rockford resident Resident laments Community Education cuts Dear Editor, The intent of this letter is neither to criticize nor condone the recent actions (December) taken by the Rockford Board of Education and Superintendent Shibler regarding budget cuts. Their main focus is to preserve programs for school children with little or no disruption to classrooms. What a lot of Rockford residents don’t realize is the huge loss seniors will feel in the job cut of Marcia Stotz, coordinator for the group Rockford Seniors Unlimited. This is a woman who loved her job and reached out to seniors in Rockford plus many nearby surrounding communities including Grand Rapids. She acted as counselor, teacher, advisor helping those in need of these services. Through Marcia and her work, seniors could socialize with well-planned day trips, luncheons, bingo and other activities. Longer trips created new friendships and continued learning. Without someone like the beloved Marcia organizing these activities, many seniors will be left out of important aspects of their lives they have come to expect and rely on. I can’t say enough about the Rockford Seniors Unlimited Program. Seniors in this community will be losing a loyal, trusting friend in Marcia. She was someone many seniors could count on for motivation in healthy, happy living. She will be sorely missed in her capacity as coordinator. Hopefully the state legislature will restore some education funding so all Rockford school employees can retain their jobs. Is there hope in the new year? A concerned citizen and voter, Eileen Behnke, Rockford resident Story recalls […]
Michigan native and Broadway actor, Todd Zamarripa, will perform live at the Rockford Fine Arts Auditorium on Thursday, Feb. 11 at 7:00 p.m. The one-time event, Back to Broadway!, will include several hit musical numbers performed by Zamarripa, and will also feature excerpts from Rockford’s upcoming musical, Les Miserables, sung by both Zamarripa and the cast. One hundred percent of the proceeds of this event benefit Habitat for Humanity. The Rockford High School (RHS) Youth Initiative group’s goal this year is to raise $40,000 to build an entire home for a family. Having his start in West Michigan, Zamarripa reminisces that his road to Broadway “began right here” in high school, and that the same can happen for the students of Rockford as well. Zamarripa said that he feels very honored to be a part of this Habitat for Humanity fundraiser with RHS students. “Just meeting with the students and artistic staff at Rockford reminds me just how important arts education is!” said Zamarripa. Director of RHS Theatre Krista Price said, “This is a unique show for the entire family. You won’t want to miss it!” Tickets are $10 for premium seating and $5 for general admission, and can be purchased at the Rockford Box Office from 10:00 a.m. until noon Monday through Friday, or one hour before the show (although availability is not guaranteed). Tickets can also be reserved by calling (616) 863-6031 extension 7087.
The Wolverine World Wide Family YMCA Food Pantry will celebrate their one-year anniversary on Sunday, Feb. 7. After the Wolverine World Wide Family YMCA had collected so many food items for Thanksgiving and Christmas last year, they decided to try and sustain their very own year-round food pantry. After connecting with the North Kent Service Center (NKSC) and Access of Grand Rapids, the decision was made the YMCA would be a good place to start a food pantry. The NKSC gave them all of the information they needed to structure the food pantry so they could start offering food to families. The YMCA Food Pantry is based on referrals, meaning that NKSC sends the YMCA names and information of the families that will be coming. The YMCA then has bags of food and other items all ready for them to pick up when they come. The amount of food and other items they get depends on the number of people in the family. During the summer, members and staff contributed to the pantry by bringing in fresh produce from their gardens. The food pantry started out serving up to five families every Saturday from 9 to 11 a.m., and has now been able to increase service and allow families to also come to the food pantry on Tuesday afternoons. The YMCA Food Pantry is now serving up to 14 families a week. The YMCA has received word from NKSC that they will be receiving a grant to allow them to purchase restaurant shelving and carts to help bring the food to people’s cars. Over the past year, the YMCA Food Pantry has served 175 adults and 141 children, totaling 316 people. Help the YMCA Food Pantry celebrate their one-year anniversary by stopping by and saying hello. If you would like more information about the Wolverine World Wide Family YMCA Food Pantry, please contact Toni Szczepanski at (616) 855-1451.
Friday, February 5 Daddy Daughter 14th Annual Valentine Semi-Formal Gala—6:30 to 8 p.m. at two locations: East Rockford Middle School Cafe or Rockford High School Cafe. Save the date! Saturday, February 6 Rockford Youth Night—8 to 11 p.m. at MVP Sports in Rockford, hosted by Rockford Police Department, Kent County Sheriff’s Department and MVP Sports Clubs. This drug-free, alcohol-free and tobacco-free event will feature Parisi Speed School and pool games with prizes and awards, pizza and music. T-shirts guaranteed for those who pre-register. Middle school kids in grades 6-8 are invited to play basketball, dodgeball and volleyball with local police officers. Cost is $6. For more information, call the Rockford Police Dept. at (616) 866-9557. “Kiss a Frog” Valentine’s Party—1 to 3 p.m. at John Ball Zoo “Ballroom” in the administration building at John Ball Park, 1300 W. Fulton NW, Grand Rapids. The party includes punch and sweet treats, storybook princesses, story-telling and other activities, along with real, live frogs! Princesses and pirates are encouraged to attend in costume. Reservations are required; seating limited to 120. Combo parent-and-child price for members is $20; $7 for an extra person. Non-members pay $22; $8 per extra person. Reserve Monday-Friday, from 8 a.m. to 4 p.m., by calling (616) 336-4326. For more information, visit johnballzoosociety.org. Sat.–Sun., Feb. 6–7 CARE Performs “Giselle”—11 a.m. and 3 p.m. on Saturday, and 3 p.m. on Sunday, at St. Cecilia Music Center, Royce Auditorium, 24 Ransom NE, Grand Rapids, presented by Creative Arts Repertoire Ensemble (CARE), a nonprofit ballet company. Tickets are $12 for adults, and $8 for children/students; all seats reserved. Purchase online at www.careballet.org or call (616) 464-3682. Sunday, February 7 Swiss Steak Dinner—noon to 1:30 p.m. at Rockford Masonic Lodge. Cost is $8 for adults or $3 for children under 10. Dinner includes Swiss steak, vegetable, mashed potatoes with gravy, salad, dinner roll, dessert and beverage. This month, the Masons are holding a food drive for the North Kent Service Center. Adults will receive $1 off their dinner if they donate one or more cans of food. Please help in supporting this worthy cause. Monday, February 8 Auditions for “Tarzan & a Case of Monkey Business”—(a musical comedy) 6 to 8:30 p.m. at the Community Center, 8450 Shaner Ave., Rockford, held […]