Insurance Agent Forum

[healthagent]

I didn't bother chiming in since it seems it's of no use. You cannot have people come to your place of employ - even without a set schedule and call them contractors.

Imagine that fiasco - just put everyone on 1099 and say "ok, the people who come in first and work the longest have jobs, everyone else - there's the door.

I'd suggest that Tom read this again: Behavioral Control

For example - does Tom plan on offering training? If so:

If the business provides the worker with training on how to do the job, this indicates that the business wants the job done in a particular way. This is strong evidence that the worker is an employee. Periodic or on-going training about procedures and methods is even stronger evidence of an employer-employee relationship. However, independent contractors ordinarily use their own methods.

Now - there's a big difference between speeding and teaching people to speed. Everyone speeds - but imagine charging for a program that is entitled "Speeding - how to beat the cops every time."

So I don't expect to hear how other people are also violating the tax code.

[myinsurebiz]

" Where do I see a question about health? Perhaps he qualifies for a better price plan. What happens then? "

This is all pre-determined by the CSR before getting to the agent.

" You cannot have people come to your place of employ - even without a set schedule and call them contractors."

I'll check on that this morning.

See what I mean - just like a focus group. Good stuff . . .

Tom

[TXINSURANCE]

There is no legal way to pay contractors to come to your place of business - John is 100% correct. This is right up there with "income tax is illegal schemes". Any CPA or Attorney will agree this can not legally be done. Why? Simply put the gov't wants to regulate your employee and collect tax - what a concept!

How do you get caught?

Two ways...

1. Workers Comp - A 1099 contractor falls off a chair at work , now what do you do? In Texas we are the only state where worker comp is optional - but in 49 other states you are in big trouble in this scenario.

2. Unemployment - Do not think for a second one of your disgruntled agents will not file for unemployment - they will. And guess what? You are BUSTED because you have not paid one dime into the system.

Then there is the issue of Tax liability. That so called contractor can come back to YOU for the tax owed.

Does this all sound like fun yet?

LOL...

I do however appreciate ones drive and motivation - but like all ventures there is a lot of homework to be done.

[Peelerinsurance.com]

Originally Posted by TXINSURANCE

There is no legal way to pay contractors to come to your place of business - John is 100% correct. This is right up there with "income tax is illegal schemes". Any CPA or Attorney will agree this can not legally be done. Why? Simply put the gov't wants to regulate your employee and collect tax - what a concept!

How do you get caught?

Two ways...

1. Workers Comp - A 1099 contractor falls off a chair at work , now what do you do? In Texas we are the only state where worker comp is optional - but in 49 other states you are in big trouble in this scenario.

2. Unemployment - Do not think for a second one of your disgruntled agents will not file for unemployment - they will. And guess what? You are BUSTED because you have not paid one dime into the system.

Then there is the issue of Tax liability. That so called contractor can come back to YOU for the tax owed.

Does this all sound like fun yet?

LOL...

I do however appreciate ones drive and motivation - but like all ventures there is a lot of homework to be done.

or someone from this board reports him...

[healthagent]

Well with all due respect to Tom, if you have to "check on it" to see if you're about to violate major tax codes I think I'd put this on the back burner.

Joe is right - have one of your "contractors" get hurt on the job. It's game, set and match.

I'm not "kind of" right. You absolutely positively cannot have anyone work out of your place of business and label them a contractors.

[senior-advisor-indiana]

Originally Posted by Paradigm

The secret is this gradually invest more and more by this formula

50% living expenses and investments

25% marketing and business development

25% taxes

Run your business like a business and an agent of average ability will be a millionaire in 3-5 years

Cheers

Not sure about the millionaire part but that is a good plan. Every agent has probably heard this advice somewhere and I would guess that 95% do not invest in their business. I was part of that 95% at one time.

[Paradigm]

Sadly the reason 95% will not is that they work to their needs not their desires. I fact most people in general do not know how to desire long term.

That is what sets the rich apart from the pack. A Dolnald Trump constant has desires and wants whether that be fame or wealth and it pushes him to greatness at least in the financial realm.

In sale in general income is unlimited but a person's desire is not. what I have seen is an agent will set a goal lets say it takes 40 hours at first, then 30, then 20, then 10 but he or she will stop working because they can meet the goal in less time and as a result they will never triple or more their income like their expertise will indicate they should

[TXINSURANCE]

The secret is this gradually invest more and more by this formula

50% living expenses and investments

25% marketing and business development

25% taxes

25% in Taxes? What offshore country are you operating in? Between property tax, payroll tax, income tax and lets not forget my new favorite...

OBAMA TAX

25%??? That's pretty low.

[healthagent]

....and workers comp

[STIBROKER@AUSTIN.RR.COM]

I wish you could learn how to work the quote function on this web site......

Originally Posted by myinsurebiz

" Where do I see a question about health? Perhaps he qualifies for a better price plan. What happens then? "

This is all pre-determined by the CSR before getting to the agent.

" You cannot have people come to your place of employ - even without a set schedule and call them contractors."

I'll check on that this morning.

See what I mean - just like a focus group. Good stuff . . .

Tom

[Paradigm]

No employees, will use an executive office to get beyond 50,000 AV a week. Can pay per hour to exec suite for any admin time I need tax deductible. eliminates payroll and workers comp.

Also can write off 45k or 25% of income as tax ded contribution to indiv. 401k

Also 25% of expense written off

So 25% is good tax # assuming McCain gets in 30% if obama does. Go McCain

[senior-advisor-indiana]

Sti said

"I wish you could learn how to work the quote function on this web site...... "

I agree

[Paradigm]

Originally Posted by STIBROKER@AUSTIN.RR.COM

I wish you could learn how to work the quote function on this web site......

I see what you mean

[myinsurebiz]

Rick -

I've operated many companies utilizing 1099's - but never once where "they came into an office" - so thanks for the heads up.

The Call Center concept I was proposing was very borderline between employee and 1099. So - I called a friend that operates a telemarketing call center and he told me how to do it. I ran this by my CPA this morning and all is good.

My friend charges a weekly "booth lease fee" for the space for his 1099 independent contractors to use to conduct business. The rate is a set amount each week with certain rebates at various volume thresholds.

Basically the Call Center will be open from 9am to 7pm. The rate for a booth will be $149 a week. Should the "lessee" produce $2,500 in Group AP a week - they get a $50 rebate. $5,000 in Group AP a week = $100 rebate. $10,000+ in Group AP they get a $149 rebate. Weekly Group AP will be based on a 4 week rolling average. Group AP = business placed with our approved carriers. The agent is free to sell for whomever.

The booth lease is week to week and either party can terminate the lease with written notice at any time. Management reserves the right to enter or not to enter into lease agreements.

No set schedules. The agent can come and go as they please when the building is open. However - if they order call back leads or live transfer leads from our vendor ( they are free to order leads from whomever ) - and they aren't there to receive them - it's their loss.

For new agents - the "lease fee" will be waived for up to 8 weeks depending on agreement negotiated. Every $100,000 in Group AP = one free week - ( can take 4 vacations a year with no charge ).

This will take care of the employee -vs- 1099 problem.

To address the "person falling out of the chair" - thus the reasoning for having General Liability insurance. ( note to self - get P&C license )

Thanks for the comments.

Tom

[healthagent]

Basically that is a beauty shop model; beauticians rent space and are indeed contractors - however, they are also responsible for 100% of their own costs including their own equipment.

Tom, what seems good on paper I don't think plays out. You are going to find licensed agents to pay a fee to show up at a call center?

Unlikely but I admire the effort.

[TXINSURANCE]

Who's equipment are they using? Who's electric and Internet? Who's phone's?

No offense I think you need a second and third opinion.

The scenario you described above will never pass the test as an independent contractor. I am not an attorney or CPA, however I have done this long enough to know there is no legal way to have someone come in under your roof and pay them 1099.

I respectfully disagree with your assessment.

[myinsurebiz]

" The scenario you described above will never pass the test as an independent contractor. I am not an attorney or CPA, however I have done this long enough to know there is no legal way to have someone come in under your roof and pay them 1099. "

The key here is " I " don't pay anyone anything - the Insurance Carriers do. They don't receive a 1099 from me or the Call Center Operator - but from their respective carriers. This, from what my CPA says - is the difference. The agent isn't receiving compensation from the Call Center Operator.

Using this method - we are basically just providing "space" with amenities. I actually like the idea more now . . .

Tom

[healthagent]

There are some working models of this but with differences.

For example, Remax agents are contractors however they have an office - they rent space from Remax and also have to pay for extras.

However, Remax plus the beautician shop model (and I just called my CPA to check on this) are based on the fact that they bring in and manage their own clients. There is also the "training test" meaning those businesses do not train their contractors. They come in and work.

This would not be the case with the call center idea where leads, ie; clients will be provided by the call center. When I ran this idea past my CPA just now he said there's not even any gray area - it's an employee situation.

I replied with "but this guy apparently checked with his CPA who said it was fine." His reply? "tell him to fire his CPA since he doesn't know what he's talking about."

[STIBROKER@AUSTIN.RR.COM]

No...really dude....if you are going to quote people you need to do it right or I will start deleting your posts.....

Originally Posted by myinsurebiz

" The scenario you described above will never pass the test as an independent contractor. I am not an attorney or CPA, however I have done this long enough to know there is no legal way to have someone come in under your roof and pay them 1099. "

The key here is " I " don't pay anyone anything - the Insurance Carriers do. They don't receive a 1099 from me or the Call Center Operator - but from their respective carriers. This, from what my CPA says - is the difference. The agent isn't receiving compensation from the Call Center Operator.

Using this method - we are basically just providing "space" with amenities. I actually like the idea more now . . .

Tom

[healthagent]

....and by the way - not all CPAs are created equal. Agent friend of mine over a year ago hits a local CPA office - get advised that he does not have to pay quarterly estimated taxes.

After a little arguing a three-way called him to IRS main line and had a nice 10 minute conversation with an agent going over how he must file quarterly.

When he presented this evidence to this CPA he just got rude and said "if you don't want to use my services then don't."

There are baboons in every field.