Payroll & 1099s
Your subs classified, and January a filing instead of a search
1099-NEC filing and payroll records for Florida subcontractors, with the worker classification checked before it costs you, not after.
The question isn't what you call them. It's what they are.
Every subcontractor has a grey zone. The guy who has worked for you every week for two years, uses your truck and your tools, and takes a 1099 because that is how it started.
The test is control, and it is applied by people who did not write your paperwork
The IRS and the Florida Department of Revenue go by who sets the hours, who supplies the tools, who can work for someone else, and whether there is a real contract and a real business behind the name. Calling someone a subcontractor is not a classification. It is a description of how the invoice is addressed.
First it costs you in back taxes
Reclassified workers mean unpaid withholding, the employer share, and penalties on top, assessed backwards over the period.
Then it costs you at the workers' comp audit, which is usually the bigger number
When the auditor decides a 1099 sub was really your employee, that payroll gets moved onto your policy. It does not land in a favourable class code. It lands in the highest class code on your policy, applied to money you had already treated as spent, and that bill is not negotiable at the point it arrives.
The defence is not an argument in March
It is classification decided correctly through the year, and payroll coded to the right class codes as it is paid. That is bookkeeping, done months before anybody asks.
What gets handled
Workers' comp class codes applied as you go
Payroll coded by the work performed, not assigned once when the policy was written and never looked at again. This is the number the annual audit is calculated from.
Classification reviewed before the first payment
Every new person on the crew gets the 1099 or W-2 question asked at the start, when it is a decision, rather than at audit, when it is a finding.
Hours costed to the job they were worked on
Labour is usually the largest cost on the job and the one most often left at company level. Costed properly it makes the job P&L real rather than an allocation. That wiring is a setup decision, and a reader who arrives here from a comp audit scare usually needs it fixed before the next payroll run.
A payroll record your CPA and your auditor can both read
Same numbers, same categories, no reconstruction. Two people asking different questions of one set of books.
How a 1099 year runs when it is handled properly
January is short or long depending on what happened in March. The sequence is the whole of it.
- 1
W-9 before the first payment
No W-9 on file, no payment. The alternative is chasing a sub in January who has moved on to a GC in another county.
This is the step that gets skipped.
- 2
The 1099 or W-2 question, asked once, at the start
Control, tools, hours, exclusivity, and whether there is a real business behind the name. Decided when it is a decision.
- 3
Tracked as you pay them
Every sub who crosses the reporting threshold flagged through the year, with the amounts already tied to the books rather than added up from a folder.
- 4
Filed in January
1099-NECs filed on time, from data that has been correct since March, with copies to your subs and to your file.
Questions I get asked
Can I just 1099 everyone?
No, and it is the most expensive shortcut in the trades. The test is control, not preference, and it is applied after the fact by people who are not required to accept your description. The right time to ask is before the first payment.
What happens if I already misclassified someone?
It is fixable, and it is cheaper to fix than to be found. What it needs first is accurate records of what was actually paid and for what work, which is a bookkeeping job. Where a correction needs a filing position taken, that goes to your CPA. I prepare the numbers; I do not represent you to the IRS.
Do you handle my workers' comp audit?
I keep the payroll coded so the audit is calculated from correct numbers, and I produce the records the auditor asks for. The policy and the premium dispute are between you and your carrier or agent. Most surprises at audit are bookkeeping surprises, and that part is preventable.
My records for last year are a mess. Where does this start?
With the books, because the classification argument is only as good as the records behind it. If you are months or years behind, start with cleanup and catch-up, then keep it current with monthly bookkeeping so the tracking runs all year instead of being rebuilt every January.
Get the classification right before it costs you twice
Send me the file. I will look at how your crew and your subs are being paid, where the 1099 tracking stands, and whether your payroll is coded in a way that will survive an audit.