If you have multiple 1099s you could find yourself a target of an audit or investigation by California EDD.
Businesses with multiple 1099s may have inadvertently opened themselves up to EDD audit or investigation. AB_5, the “Gig Work Bill” was signed into law last year by Gov. Gavin Newsom and went into effect January 1, 2020. The new law makes criteria for classifying a 1099 worker much more stringent. If you have questions after filing your taxes for 2019, reach out to the team at MIlikowsky Tax Law today. penalties can be dramatically lessened by self correcting this close to your tax filing date.
Don’t wait for EDD to call or come to your business, you can do your own investigation to ensure your contractors have legitimate businesses. We recommend got1099.com. The DIY tool allows you to run reports on 1099 contractors to verify their business license and EIN among other factors.
Armed with the right information you can make an informed decision. To dig deeper, download our EBOOK on AB-5 complete with Case Studies of the black and white and grey areas of the new 1099 contractor classification rules.
The team at Milikowsky Tax Law is here to support your business in the event of California EDD audit or investigation. We have resolved over 300 cases with EDD and are your relentless advocate to defend your business.