This website is a Godsend!! I work as an Hvac contractor and make roughly $675 per week which is paid to me by my partner. Every week when i get my check he takes out 10% of whatever I made that week, which he says is to cover my workers comp insurance. ======>Basically, workers? compensation is supposed to cover your medical costs and pay you for any days of work you miss. Almost all employers have to buy workers? comp insurance. So aslongas you are an employee your employer,NOT YOU, needs to pay for it for you. However, if you are a 1099 indepednent contractor,I mean a self employer, then Independent contractors are not eligible for workers' compensation coverage; employers are not required by state law to purchase coverage for ICs;if you are a member of an LLC, then, the key to knowing whether your LLC must have workman's compensation insurance lies in understanding laws in the states in which you operate. While an LLC that has employees who aren?t also board members generally must carry workman's compensation insurance just like any other business, some states distinguish between and have different compliance requirements for LLC members than for regular employees. This means a basic determining factor is whether your state considers you as an LLC member or an employee. For example, Massachusetts state laws don?t view members of an LLC as bona fide employees. For this reason, Massachusetts doesn?t require LLC businesses to carry workman's comp on its board members.
My question is should this have been coming out of my check every week, or was this something he was suppose to cover. I honestly never questioned it until I started printing out and adding up how much I had made this year by looking at the checks I had submitted into my Business account. After doing so I realized this amount isn't the total of what i made, if i still owed taxes on this 10 percent that he has kept every week. I wasn't able to find out if i did owe taxes on this 10% , But I did find where it is illegal for an employer to try and offset these insurance premium cost through the employee. But being that i am a contractor, and not an employee, I don't believe these laws apply to me. Sorry if this is all confusing, I am lost myself, but my question is should my partner have been deducting this 10% out of my check every week. Or was he using it to offset the cost of his premiums going up by employing me. And if he was suppose to deduct it, am I still liable for that extra 10% at the end of the year as far as taxes go and its re added back to my gross annualy income. Again sorry for this long confusing one, and thanks again!!=====>As mentioned above, it depends. aslongas you are a rgualr W2 employee then , Your employer pays the cost of workers? compensation. Your employer cannot charge you for any part of the worker's compensation insurance premium or benefit.If you are a contractor that receives 1099MISV, then, your Employer is not required to provide workers' compensation insurance to you that is a contractor receiving ass aid 1099 form.if you are a member/ I mena a partner NOT A w2 EMPLOYEE, THEN, Workers' compensation coverage is not required for you , a member of the LLC.
for mor eprofessional help plz contact an IRS Enrolled Agent/ a CPA doing taxes in your local area for your fed/state taxes.