Temecula, CA asked in Tax Law for Arkansas

Q: In Arkansas, can a sole proprietor just 1099 a sub-contractor that is working for him or does he have to withhold taxes?

The sole proprietor (DBA) wants to hire my husband and he would get paid for piece work. The DBA wants to withhold 40% of his paycheck to cover the taxes that might be due. Can't the owner of the DBA business just pay my husband for his piece work and then 1099 him at the end of the year so that we are responsible for all the taxes that would be due?

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1 Lawyer Answer
D. Mathew Blackburn
D. Mathew Blackburn
  • Tax Law Lawyer
  • Englewood, CO

A: First contractors don't get paychecks, employees get paychecks. Second, unless the contractor is a foreign national or resident alien then no tax should be withheld. Once a form W-9 is provided to the Sole Prop then all funds should be turned over and the contractor will receive a form 1099-MISC at the end of the year. The contractor's taxes have nothing to do with the sole prop, if the sole prop wants employees they should hire employees but if you hire a contractor be prepared to pay out or get sued.

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