By Beth Kujan
You know a word is important when it steps up from a noun to a verb. “Google” is a famous example, as in the sentence “google my name and you’ll find my work history.”
It did surprise me though to hear a number used as a verb. The number was “ten-ninety-nine,” as in the IRS 1099 tax form businesses issue at the end of the year to report the total amount they paid an independent contractor.
No tax or social security is withheld. The 1099 contractor is responsible for making quarterly installments against his or her projected tax responsibility for the year, based on 15 percent nominal tax rate on earnings.
The sentence that used 1099 as a verb was uttered by a professional sound technical describing the changing workplace of TV news. He said “The best sound and camera guys in the business are permanent, but the companies 1099 them.”
Wow. So in the TV news business there’s steady work, but not as an employee of News Corp or Time Warner. Instead, most of the crew are self-employed independent contractors. Perhaps they all invoice for their time, or perhaps there is some sort of electronic time keeping.
Either way, there’s a shift in the bookkeeping from corporation to individual. It takes discipline to withhold the normal 7.5 percent for FICA tax (Social Security and Medicare), 7.5 percent self-employment tax (which, in the past, employers paid towards your FICA obligation), federal income tax, unemployment tax and 6 percent for the state of New Jersey.
Fortunately, a tax accountant will help you project quarterly tax bills and print out slips for payments on Jan 15th, April 15th, July 15th and Oct 15th. Tax software probably does this too, or it’s missing out on the “camera guy” market.
As the labor market changes, we may well have more IRS forms being used as verbs. Let’s just hope it doesn’t get started with all those incorporation acronyms.
Beth Kujan is one of the organizers of the Morris County Career Network, which meets on the second and fourth Monday of each month at St. Peter’s Episcopal Church in Morristown to help professionals in transition.
Good advise. I was at an IRS seminar where it was stressed that the IRS is starting to crack down on employers who fail to pay employment taxes i.e. withholding for s.s., medicare etc. In the interim, prudent employees should withhold on their own using a 1099.