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
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??? :)
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
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.
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.
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.
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
CITY OF KISSIMMEE
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
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 ;-)
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
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
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.
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.