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If intent is not the issue, and that may be true, will the employer pay if disabled, unemployed, killed? Is the employee going to earn enough to buy their own coverage? The OP implies the person is on the clock for 3 hours on the road, picking up others. Is the employee being paid for this time? Covered by insurance for this time? What if there is an accident and one of the passengers or another party is hurt? Who pays? It may all sound and be good until something goes awry. That is why I put it on the employee to make the decision. Maybe they need the income. If so, they really must consider the costs of taking the work, the costs their employer is not going to cover under the veil of IC. Employee should get a business license, EIN, insurance, etc., and really act like they are in business if they choose to accept the offer as presented. This is coming from experience nearly 40 years ago, taking a "job" as an "IC", Rented vehicles, transported my "coworkers", operated dangerous machinery at third party locations, and was somehow lucky enough to figure out it was a mistake before something went awry. Cash seemed good, but so much went out before I could eat, I was not only at risk, I was woefully underpaid when counting what I could really spend.

thank you all - He is going to do it as IC - He does purchase the truck and they will make the payments - I said that will be part of your income - even if that is not part of the 1099 - but then he will have that... He said they are all IC.

With the Amish you have other problems. From what I know they do not pay FICA or Medicare and some times all the money earned is pooled. They do not pay each other salary.

The 1139 is a request for a tentative (quick) refund and must be filed within one year instead of the longer 3 year period allowed for the 1120X, and with the 1139 the IRS is supposed to act on it within 90 days. The 1120X is a claim for refund (not tentative) and the tentative vs actual claim comes with differences related to the SOL. Rather than me explain it all out, I've included links to two articles that explain it better than any summary I'd give here. The articles are older and the carryback period allowed has changed, but the basic differences and effect of using one or the other of the forms hasn't. Article from The Tax Advisor (and also has a linked "exhibit" summarizing some of the differences in the last line of second section entitled "Background" : http://www.thetaxadviser.com/issues/2010/mar/nolcarrybackclaimscanunlockclosedstatuteoflimitationyears.html Article from The Free Library online: https://www.thefreelibrary.com/Practitioners+beware+-+use+of+Form+1045+or+1139+may+create+unexpected...-a018973034

Sorry, yes C-corp. Thought that was clear by referencing an 1120 not an 1120S. I said I was sticking to my strengths...

Depends on the Ordnung ...... Tim Allen, or Kirstie Alley would be a nice source......Wait..!...Maybe they weren't paid either. Anyway....I agree with Rita, and MDEA.

I have not done a corporate NOL, but I think there are 2 options. 1. File the 1120X and mail it in. 2. File Form 1139 with the 1120 for the year in which the NOL occurs. Not sure what the advantages or disadvantages are of each method. Tom Newark, CA

It does appear that the worker would really be an employee. Nah, it's not an Amish thing; it's a trying to save payroll tax and other related aggravation and costs of being an employer thing. (Not to be too technical.)

How, exactly, is this done?

You should state if the corporation is a 1120C or 1120S. We assume a C Corp.

Employee in law and fact. The problem is the employee wants the job/money, so they will likely go along. WC is probably the biggest cost savings for a construction employer gaming the system. Employee loses out if they get hurt on the job. Even if they later prove they are an employee, it takes time. Allows employer to undercut not only expense, but pricing. What the employee may not want to ponder is if their employer is comfortable breaking the law in payment, what other areas are going to be shoddy? (I was on the "employee" side in my young naive days, in a dangerous job.)

I have sent copies of bank statements to prove direct debit.When you pay on line you receive a receipt with a tracing number. I have only had one direct debit problem when the client did not have the money in their account.

Okay - Thanks All. Me too - checked with another independent yesterday - same story. Yeah, I know that and you know that; problem is - the customers don't. Many things have changed about this business in the last few years, but one thing remains constant - most ordinary people are still scared to death about any notice from IRS. And they want something done about it now; not 60 days later. . Five years ago I talked to an EA who left private practice to work for IRS; said he was astounded at the lack of tax knowledge there. Co-workers, recognizing his expertise, began asking him how to handle problems instead of consulting the clueless supervisor. A small turf war ensued and his superior soon advised "This job's not for you; you need to do something else." He resigned after four months of unpleasant treatment. In the old days, if we sent the right stuff and waited long enough, problems would eventually work their way through the system. Now, I'm not so sure you can outwait them. So I've been thinking about doing it MDEA's way. Only thing, if it still gets all balled up; how can I sent them the front and back of an EF debit?

I did one of these this year for a couple who had 12 rentals. I did a "mass" out-of-service for most assets for the date of death. That way they got the partial-year accurate depreciation. I then re-entered them as "wife's original half" with her 1/2 basis and 1/2 depreciation and "inherited half" with the step-up basis for the deceased husband's portion. I left things like new carpets, appliances, etc. alone and depreciated them as usual, thus addressing Judy's concern about assets using the mid-year convention. These assets certainly did not appreciate in value by the time of death, and it would be ridiculous to try and separate them from the date of death appraisals (which certainly did not say "building worth x, but only worth y without a stove"). For major assets, however, she continued with her original basis and depreciation while his got rolled into the date of death value. Maybe a crude example will help: Building: Original cost $100,000, depreciation taken $80k. DOD value $150k Furnace: Original cost $20k, depreciation taken $5k Stove: Original cost $700, depreciation taken $200 Wife's original half: Building $50k, $40k depreciation; Furnace $10k, $2500 depreciation Inherited half: $75k (includes building and furnace, which is part of the building in the appraisal) Stove retains its cost and prior depreciation. I'm not sure this method is right, but I'm comforted to know that all items will eventually be depreciated. The only issue is the matter of timing. I don't think the IRS will argue about when the relatively few bucks of stove depreciation get counted.

The advice you've been given is for equitable distribution states, so you are safe to follow what's been said here. It would only have been different if the states were community property states.

We don't take many new clients, some referrals from current clients who have a friend or relative whose former tax pro retired. Often I am shocked at how little they had paid and warn them before I even enter their basic info that they will pay a lot more than they used to. They react like they were expecting it, and not one has ever complained about my bill. There must be some preparers out there who don't raise their prices very often, and their clients stick with them for 20+ years paying little more than they did two decades ago. That's impossible in a modern tax office. Starting maybe three years ago we have raised our prices almost every year. The big culprit is software costs, which we all know go up at the rates of college tuition. There are also increasing costs of compliance and risk. When the due diligence rules came out for EITC, we raised the price on all those returns $25 (I know, for folks who can least afford it), even though we do very few EITC returns and know all of our clients. We'll have to determine if we'll do the same for Additional Child Tax Credit and education credit clients this year, now that due diligence will apply to them as well. Whereas we used to take info verbatim from our clients because we know them, now we have to fill out another cumbersome form and face penalties if we don't cross all the t's and dot the i's. Oh, and did I mention the costs of E&O and now computer intrusion insurance? Many of the old timers still did returns by hand (law against that now) and didn't fuss with insurance and potential penalties. A couple of years ago I had a lady come in with three multi-unit rental properties who had paid $100 for tax prep. The hand-done depreciation schedules were accurate to the penny!