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Posted on 12/22/2007 2:49:32 PM PST by lowbridge
FedEx Corp. said late Friday that the Internal Revenue Service has ordered the company to pay back taxes and fines totaling $319 million for ground employees the firm misclassified as independent contractors.
The ruling covers 13,000 employees FedEx had in 2002, and the company said that the IRS is investigating the status of contractors hired between 2004 and 2006. That probe could lead to further penalties, the company said.
(Excerpt) Read more at marketwatch.com ...
Perhaps you don't understand that a union is a collectivist construct. It is by definition a leftist organization. The union is simply supporting the political ideology that mirrors its own existence. Conservatives value individual rights. Each individual prospers or fails on his/her merits.
Only YOU could choose the most appropriate plan for them, just as Uncle Sam is the only man who can set up a social safety net of things like the great and string Social Security, or Medicaid, or Medicare, or RRA, or Federal Pensions. Yes, mas-tuhs!
Or ....
Perhaps you might better thing of those folks with you as as ASSOCIATES, or even as partners and peers, and see that they can and SHOULD do these things for themselves as such things have NOTHING to do with your business.
I’ve purchased Russian kettlebells form a supplier down in Texas. He uses UPS exclusively because they will reimburse his losses if they screw up the delivery or lose the package. Not so with FedEx. He stopped using FedEx because they kept losing the packages and not covering the losses. The “independent contractors” didn’t have any liability or accountability.”
I know a lday who ships live horse semen all over the country.
Fed Ex lost her container and contents 3 times in 3 days.
When customer’s mare came into heat again, she threatened to fly with it on her lap. UPS got it there in less then 7 hours. Don’t know how.
I suppose TSA would let her carry it on...as long as it isn't more than 3 ozs.
The difference is who pays for the other half of the social security taxes. An employee on a W4/W2 basis has income taxes , social security taxes and medicare taxes extracted and forwarded by the employer on each paycheck period. The employer has to pay a matching amount to the IRS. When an independent contractor is involved, the company sends a 1099 for the gross amount of wages paid to the contractor. That contractor is then responsible for paying income taxes, social security taxes, self employment taxes and medicare taxes. Companies like the contractor model because it saves them “
Either way, the IRS gets the total taxes because form SE has to be filled out for the person who is a contractor, and they pay double the 7.65 amount the EMOPLOYEE gets deducted. The problem arises when the contractor gets to deduct his expenses and pay on the NET amount only.
In effect, thie attitude by the IRS is stopping people from starting out by themselves, and growing into a larger company that can hire more people. They are stifling economic growth in the country with their heavy-handedness.
The real trick is that you must work for more than one person. You must provide all the materials to do the job, even your own calculator, pens and pencils.
The companies are getting out of more than just the matching Soc Sec and Medicare. They are escaping Federal and State Unemployment taxes. They are escaping benefits like health insurance, sick pay, vacation pay, etc.
If you truly have the ability to be self- employed, just make sure you are working for more than one person in a year. Consultants work for more than one company at a time, just in blocks of time.
Or- form your own legal company and have the pay go thru accounts Payable instead of the payroll ledgers.
lday”
lady- sorry..
I suppose TSA would let her carry it on...as long as it isn’t more than 3 ozs.”
Good point- It definately is more than 3 ounces......
WOW
You reached an amazing conclusion about my post....
It’s so far out there, that I won’t waste your time or mine to try to discuss this further.
That'd be some poetic justice, wouldn't it?
Why try, indeed? It’s below someone of your exalted stature and eminent wisdom.
You are the ignorant one of you think the fair tax will solve the worker classification problem.
The USPO delivers a lot of FedX packages each and every day a FedX truck along with UPS and DHL and Airborne deliver parcels to the Post Office for delivery
Read my tagline. And I agree.
You made a good point about all the other expenses a business can dodge if they use only 1099 contractors. The ability of a contractor to subtract expenses and pay tax only on net income is a sweet deal. Going to work is an expensive proposition. It would be nice to be able to subtract all of those expenses from pre-tax income.
The legal way to do that is to form a Chapter C corporation and pass all incoming revenue through the corporation. Pay all of the expenses from the corporation including payroll. Your "customers" are doing business with the corporate entity instead of the individual employees. All of the protections of the corporation accrue to that arrangement...at the expense of forming and administering the corporation properly.
I was just about to ask if we have any FReepers who are FedEx “employess.” And what they have to say about this situation.
Enquiring minds want to know.
Most states and towns use a property tax to raise revenues. This tax actually predates the income tax. Each year the value of the property you own would decrease unless you replace it.
A corporation is not needed in order to deduct ordinary and necessary business expenses from revenues.
The rest of us have to follow the rules. So does FedEx. If anyone doesn’t like it, change the tax code. Anything short of that leaves nothing to discuss.
You are incorrect. A union isn’t by any definition a leftist organization. However, a union of labor may become leftist or rightest as was the case of the British Luddites who opposed change, seeking to conserve the status quo. But, a union is a neutral creation that is shaped by the results it desires or as is currently the case in our nation, the desired results of leaders following an agenda foreign to much of the labor movement.
Furthermore, a labor union is as collectivist as is the American Association of Manufactures, the Chamber of Commerce or the NRA.
Yes. This will be the first year I've had "business revenues" in the form of rent collected on my 2nd house. I do plan to deduct the interest, taxes and maintenance costs from those revenues on my form C.
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