"bc" <cantor2[at]ix.netcom.com> wrote:
- quote -

<snipped> So your clearing B/D doesn't say "you have to be an
- quote -

I didn't say that. I said I was paid on a 1099 as a
contractor. My B/D will only issue checks to an individual
account.

I'm not sure, but I think in order for a payment to be sent
to a business ALL the owners of the business must be
licensed.

<more snippage> In this case, the potential clients are Reps who are being
- quote -

Now I'm confused. It sounds like the Reps are being ordered
onto a W-2 by someone other than the B/D? If so, who? And
what are they using for justification? The standard in this
industry for most independent reps is contractor status.

If someone other than the B/D wants them on a W-2 try going
over the 20-questions of the SS-8. See who hires and pays
their assistants, who pays for continuing education and
such. Most employers are responsible for such things, if
the employer in this situation is not taking care of those
items maybe they can be convinced that the person really is
a contractor.

If that doesn't work, I still think the accountable
reimbursement plan is your best option. It may even work if
the employee first gets reimbursed from commissions for out
of pocket expenses then gets W-2'd for the remainder. The
net effect will be removing the expense from taxation at the
individual level. It is still deductible by the company
because it is still a deductible type expense.

If its the B/D that is giving you the hard time, try finding
another B/D - there are tons of them out there that offer
good programs.

Good luck,
Gene E. Utterback, EA, RFC

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

bc wrote:

- quote -

Our securities salespeople clients with entities get the 1099s in their
own name, report them on Schedule C, then back them out as nominee
income to the entity. If you've got multiple reps working together,
you'd have to do nominee 1099s anyhow, because the 1099 amount isn't an
accurate income apportionment for any of them.

Phoebe

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

"Gene E. Utterback, EA" <Gene[at]AllianceTax.Com> wrote:
- quote -

So your clearing B/D doesn't say "you have to be an
individual in order to receive commissions"? That's the
current hang up.

- quote -

In this case, the potential clients are Reps who are being
_ordered_ to be on a W-2 (and not through the B/D). They
have significant business expenses and can't do anything
with them given the constraints of the B/D. We're rummaging
around trying to find a way to use those deductions.

--
Bruce Davidson Cantor, CPA, JD
Admitted in Colorado

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

"bc" <cantor2[at]ix.netcom.com> wrote:

- quote -

Using your parameters, try an accountable reimbursement plan
- they can submit expense reports to the company, the
company gets the deductions, the sales people get paid tax
free.

You might also want to reconsider the W-2 thing - though you
didn't give enough information for me to make a
determination. I'm a Registered Rep and am paid on a 1099
from the B/D I clear my trades through. My contract
requires me to comply with their rules and regulations
regarding securities work, but I get to report my income and
expenses on my business return.

Now, you may have other reasons for wanting these people to
be on W-2s. I know a lot of Reps who are employees, but
there are just as many, maybe more, that are contractors.
The up side to the contractor thing in the securities
business is that all of have to deal with SEC and the NASD
as well as the state regulators. And all of us have to use
an OSJ to comply with those rules. Even as a contractor, I
come under the jurisdiction of the OSJ at my B/D's office.

Good luck,
Gene E. Utterback, EA, RFC

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

We are trying to work with a group of registered securities
salespersons. They have been told

a) they may not form an entity of any type for their
commission income due to the language of the Exchange Act of
1934 which prohibits commission payments to other than an
individual unless the recipient is a registered
broker-dealer with the corresponding capital reserve
requirements.

b) they must be on a W-2 due to control issues.

These persons have significant expenses related to their
activities, which include autos, meals and entertainment,
travel, home offices, etc. Between the 2% limitation and
AMT, those deductions aren't worth much.

We have brainstormed for a structure which would give value
to those expenses, and have come up empty. What is anyone
else doing, recommending, seeing?

The closest we came to a working solution was classification
as a statutory employee. However, they aren't full time life
insurance sales persons. If something similar could be
worked out, they would likely be very happy campers (as
would we due to the new clients we would get).

--
Bruce Davidson Cantor, CPA, JD
Admitted in Colorado

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >