FL homeowner acting as a contractor must deduct F.I.C.A. and withholding tax

I live in Osceola County Florida. According to the county website, when a homeowner is acting as a general contractor, "Any person working on your building who is not licensed must work under your direct supervision and must be employed by you, which means that you must deduct F.I.C.A. and withholding tax". What exactly does this mean? How much F.I.C.A. and withholding tax do you deduct? I went to the IRS website and can't find any forms or guidelines on how to file this tax.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
jloc803 wrote:

How much did you make last year................................
Send it to us.
Thank you, IRS
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
jloc803 wrote:

http://www.irs.gov/businesses/small/content/0,,id 942,00.html
Need to also find out if have to withhold for State and/or Municipality, too. IRS won't know that, but FL equivalent will...
Maybe it ain't gonna' be so easy to cut the contractor outta' the loop as you might've thunk??? :)
--


Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
You didn't look very hard. It's all there...under small business. AND you have to have workers supply you social security #'s; have them fill out withholding forms, etc etc.

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
jloc803 wrote:

The county is full of it. Check the IRS definitions of "contract labor."
Does your county government give out advice on patent or admiralty law? How about the tariff on rail transportation of Yak Fat?
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

It means you will be an employer, just like the company you work for if that is how you earn a living. And you need all of the accounting that goes with it.
I'm not a lawyer, but I have to wonder just how enforceable that is. Making them an employee opens you up to all sorts of headaches. You can find the payroll deduction percentages, but keep in mind, as an employer you have to contribute half the FICA also. Total is about 15%. You also have to remit the tax withheld to the IRS and possible state taxes. Then you have to send out W-2 forms at the end of the year. Check your Workman's Comp laws too if you have more than one employee. You also have to comply with overtime and minimum wage laws, possibly post some information about the laws in a conspicuous place, and the list just goes on and on. Oh, be sure to read up on the maternity leave provisions.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Me, too. Working as a freelance writer for all these years, I don't see how having someone coming in and working for me on a project basis would make them an employee for tax purposes. Still should be an independent contractor, I would think.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
wrote:

They are certainly independent sub contractors but Florida law makes the general contractor responsible for tax and insurance compliance. If the code enforcement inspector shows up he will be looking for proof of insurance forms from every sub on the job if you don't have blanket insurance as GC. "Owner/Builder" is the GC.
If you are hiring licensed sub contractors that is not really a big deal. They just get added to your permit and things flow. They will have to be current on their taxes and insurance, the county checks when you add them to the permit. If you do have your major subs on the permit you can usually get away with a little "casual labor" but pray they don't get hurt on your job. The way around that is to hire them from a day labor pool where the owner of that company does the insurance and tax collections. Maybe you could get away with picking up labor on the street before lawyers were on TV and everything becomes a ltitgation test to see how deep your pockets are. The "tax man" is as likely to be immigration these days as the IRS. They just started cracking down a little harder on witholdings and bogus SSNs as a way to find illegals. They will also find your casual labor that way.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
snipped-for-privacy@aol.com wrote:

have no sway over what the Feds require to make a person an employee and thus responsible for FICA and Fed w/holding.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Kurt Ullman wrote:

No, but they can (and apparently do) require you to adhere to a set of rules before issuing a building permit which include assuming liability for subcontractors...
<www.kissimmee.org/uploadedFiles/Work/Departments_and_Services/Development_Services/ownerbuilder.pdf>
CITY OF KISSIMMEE DISCLOSURE STATEMENT FOR OWNER / CONTRACTOR
State law requires construction to be done by licensed contractors. You have applied for a permit under an exemption to that law. The exemption allows you, as the owner of your property to act as your own contractor even thought you do not have a license. You must supervise the construction yourself. ... You may not hire an unlicensed person as your contractor. It is your responsibility to make sure that people employed by you have licenses required by state law and by county or municipal licensing ordinances. Any person working on your building who is not licensed must work under your supervision and must be employed by you, which means that you must deduct F.I.C.A. and withholding tax and provide workers compensation for that employee, all as prescribed by law. ... ... STATE OF FLORIDA COUNTY OF OSCEOLA
--
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

requirements were for the permit and the governmental unit can pretty much require what they want to for the permit.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
wrote:

The state doesn't have to enforce federal law. "La Migra" usually has a fairly close relationship with the Florida DBPR folks since their interests intersect and SS#s are becoming ground zero of the immigration effort to find undocumented workers. That gets the FICA tax front and center when they knock on your door.
The big tip off, one van parked outside and 15 guys on the job ;-)
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
wrote:

You should go to the Florida DBPR site and read about "owner/builder" Basically you not only need to do all the tax accounting a business does, you also have to have insurance. I am not talking about your homeowner's insurance, I mean workman's comp, liability and unemployment. The simple answer is to only higher licensed, insured subs or take your chances with folks you pay cash. ... or just skip the permit process entirely and hope you get away with it. The same guy who busts you for building without a permit will be busting you for undocumented workers. Maybe you can get done on his day off.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

You also forgot that you must have an industrial insurance policy in place to cover anyone who does not have their own. When I built houses, I paid the subs, and had them sign a W2, and at the end of the year sent them a 1099. Most reduced their prices for cash on the spot. I still paid them about 10% on check so that they would be covered on my industrial insurance.
Building your own house is not hard. But it's more complicated than a lot of people think.
Steve
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Site Timeline

Related Threads

    HomeOwnersHub.com is a website for homeowners and building and maintenance pros. It is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.