Comments on: California Independent Contractors Under Attack http://www.directselling411.com/blog/california-independent-contractors-under-attack/ Providing information to consumers and others interested in learning about and discussing direct selling. Tue, 22 Nov 2011 13:37:03 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Amy Robinson http://www.directselling411.com/blog/california-independent-contractors-under-attack/comment-page-1/#comment-6023 Amy Robinson Tue, 23 Jun 2009 21:15:47 +0000 http://www.directselling411.com/?p=149#comment-6023 The "other working Californians" you mention have taxes withheld from their pay based on a formula designed to approximate what they'll owe in April. The formula isn't always perfect, but it's usually about right. The problem with withholding on independent contractors is that it's an across the board rate that doesn't take into account anything about the individual taxpayer. California's own Franchise Tax Board has stated that a majority of independent contractors will be overwithheld - even at a 2 percent withholding rate. The legislature already knows that a majority of the money they collect will need to be returned so the net result is this is just an accounting gimmick for budgeting purposes. The “other working Californians” you mention have taxes withheld from their pay based on a formula designed to approximate what they’ll owe in April. The formula isn’t always perfect, but it’s usually about right.

The problem with withholding on independent contractors is that it’s an across the board rate that doesn’t take into account anything about the individual taxpayer.

California’s own Franchise Tax Board has stated that a majority of independent contractors will be overwithheld - even at a 2 percent withholding rate. The legislature already knows that a majority of the money they collect will need to be returned so the net result is this is just an accounting gimmick for budgeting purposes.

]]> By: quixtarisacult http://www.directselling411.com/blog/california-independent-contractors-under-attack/comment-page-1/#comment-6022 quixtarisacult Tue, 23 Jun 2009 20:44:17 +0000 http://www.directselling411.com/?p=149#comment-6022 These payments (although usually only representing a discount to people participating in MLMs) are considered income for tax purposes aren't they? Aren't other (hourly)working Californians also required to have their income tax withheld until tax season? Why allow a loop hole for these 'independent contractor' types? Aren't many MLM aspiring independent salsepeople basically taught to ignore all the expenses necessary to generate what merely represents a 'discount over retail' on products many of these 'contractors' self-consume without ever seriously considering a resale? I think if I were a legitimate independent contractor in California (like a carpenter, realtor or taxi driver), I don't think I'd like to have all these questionable MLM 'independents' linked to my legitimate profitable business? Hasn't MLM been rife with problems and scandal? These payments (although usually only representing a discount to people participating in MLMs) are considered income for tax purposes aren’t they? Aren’t other (hourly)working Californians also required to have their income tax withheld until tax season? Why allow a loop hole for these ‘independent contractor’ types?

Aren’t many MLM aspiring independent salsepeople basically taught to ignore all the expenses necessary to generate what merely represents a ‘discount over retail’ on products many of these ‘contractors’ self-consume without ever seriously considering a resale?

I think if I were a legitimate independent contractor in California (like a carpenter, realtor or taxi driver), I don’t think I’d like to have all these questionable MLM ‘independents’ linked to my legitimate profitable business? Hasn’t MLM been rife with problems and scandal?

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