Has anyone on here run into a situation where you did freelance work without a license, however you stated clearly on all documents that you are not a licensed architect and that the work is not intended for construction use and for design purposes only. And at the end of the project the client refused to pay you an amount that was agreed upon. If so is it viable for such work would be upheld for compensation in small claims court?
Of course if it was legally rendered work. What was the work for? If it was non-exempt than NO you cannot sue. An illegal exchange of goods/services is automatically unenforceable. For instance, If I agreed to exchange 1 pound of weed for an old car and then didn't pay you would be shit outta luck. If the services rendered were legal then you can sue.
I haven't done much freelance, but, like you, I've done some as merely a designer for conceptual plans. I never got screwed over, but I would only for no more than a few hundred dollars.
What do you have in writing and was there a retainer? Are they in possession of your drawings?
Spiders are an option, but they only last so long. An envelope of glitter means they will always be tormented by sparkles in the carpet they just can't vacuum up.
The services were for design work. The client is a contractor and i did renders and floor plans so he could show it to the client and retain the work. He agreed to paying the amount and i sent him an invoice, i have paper work suporting that i am not an architect and cannot provide architectural drawings or stamps and that the work is for design purposes only. he agreed to the amount which i also have in paper work to support his aggreeance,
they are in possession of my drawings and my designs, all my drawings have a disclaimer that they cannot be used without my written consent. they do not have my written consent
How did he get the drawings before payment? I've always made it clear they aren't getting anything until I receive money. And yes, I've followed a client to a bank once.
always collect some type of deposit up front. call it a retainer or a deposit. whatever works for you. don't do any work until the check clears or you've got cash from them in your pocket.
get everything in writing. including promises that he would pay. if you have in writing that X contractor would pay you X amount after you deliver X product by X time, and it is signed by the contractor you can win in small claims i'd opine.
if he doesn't pay up in full, you can go to small claims and you can also be sure to not recommend him to anyone asking for a good builder.
right, i already ensured this is taken to the better business bureau and so forth. I just want to ensure that without an architectural license i am in legal means to collect compensation in a court of law. all my documentation states that i cannot provide those services
It probably depends on the jurisdiction. Someone complained on my advertisement that I was offering architectural services while clearly stating I was an architecture grad, and not licensed. I changed my posting to design services from architectural.
The reason he does not want to pay the 400$ amount is because he wants me to fill out a 1099 or an employment for I told him I do not need to fill either out because I am not his employee and I do not trust him to have my social security number. He says he doesn't want to pay my taxes however nys I would only have to fill out a 1099 if the amount exceeds 600$
Are you a professional or a hack? Strike 1 was offering design services, a la, Balkins. Strike 2 is not conducting yourself like every other business person, with the 1099. We wait with bated breath for the rest of the story...
I don't give my babysitter a 1099, but any business owner wants a 1099 for tax reasons.
The person that asked for your services CAN send out 1099, but is not required to do so under 600. You are required to report regardless how much you made. Can you imagine if you earned 599 daily for a different person? According to you, you don't have to file that?
Making a huge deal about this and being very paranoid about. If I didn't trust people with my SS, I would not be in business at all.
My concern isn't filing and I file with my own taxes at the end of the year. However we were on an agreement to be paid cash, and now all of a sudden that changed. Now the reason I gave him the amount of 400 was to be fair, originally the price came to 800 and I discounted heavily obviously, so I don't understand how you come up with me not wanting to file. If I knew he would want the 1099 I would have charged the original price
Also, I am freelance so under nys law I am protected to submit my own taxes. The law abiding for independent contractors/freelance is at no point in time shall I be an employee of the client or treated as an employee to the client
Well I do this on the side, it's a learning process for me. I can't afford at this point to make myself an llc and I would prefer that I maintain freelance until I am licensed.
3. Claim expenses PAID to HIM once you get his information back
he'll get audited for not reporting income coming from you and the IRS doesn't care and it's all up to him to prove that he did not get paid, which will be impossible.
Below is the statement that i have now in my proposal, however just wanted to make sure that this is legitimate for this situation as well
Legality of Services: It is understood that designer is a freelance, independent contractor and not an employee of the client and/or contractor. All compensation is agreed upon prior to inception of work, no work shall be delivered until full compensation has been received and cleared by proper agencies and banking institutions. Designer shall be responsible and liable for the reporting of and the payment of all federal, state and/or local taxes with respect to the services performed for the client as an independent contractor, at no point shall compensation for designer be deduced from final agreed upon fees by others for taxation purposes to support the client and or contractor. The client and/or contractor shall at no time assume the designer is an employee of either the client and/or contractor.
Are you a professional or a hack? Strike 1 was offering design services, a la, Balkins. Strike 2 is not conducting yourself like every other business person, with the 1099.
Adding to JeromeS's list: Strike 3 was reducing your fee by 50%.
Well, he was a friend. I'm just trying to see if its A. worth it to take to small claims court. B. fill out the 1099 and recieve less than what was agreed upon , even though the amount is below the minimum of 600$ necessary to fill out a 1099 or C. Just say screw it and do nothing
Welcome to the big leagues. Everyone knows that a "cash discount" means that you don't plan to report the income, or at least that you reserve the right to not report the income. It's not legal, of course, but happens all the time.
If the amount was over $600, he would have to send you a 1099. If under $600, he's just covering his butt so he doesn't get stuck paying employment or income taxes on the amount he gave you. Many contractors get a wake-up call early in their careers, usually accompanied by a big tax bill, for poor record keeping. Sounds like he may have gotten his wake-up call.
If you're going to do this regularly, you either need to get comfortable with giving out your SS number or you need to suck it up and get an EIN.
no_form, thanks for your opinion but to answer your question yes i have a job. Thank you.
But as for the whole story, i've stated it. I do renders and designs for this contractor, he pays me. this time he was upset because the job was larger and took more time and because so it cost him more money. I realized he was an idiot when he told me "why are you charging me more" our original jobs were about 150sf, this was 1000sf. He didnt understand why the price increased (realization of this kid being a moron) and was very upset and angry about that. Because of that is the reason he is refusing to pay, however after calming him down last month after i had sent the invoice he agreed he would pay. i gave him ample time, then a few weeks later i reminded him and it was at that point he wanted me to fill out a 1099 after already agreeing to pay the 400 a month prior without the discussion of a 1099, so for those purposes is why i'm asking for opinions.
Listen, you can call me an idiot thats your opinion but please don't question whether i'm portraying a correct story or not. And again I'm asking for opinions regarding this situation not satire. I know alot of people my age and my experience that would'nt even bother trying to start their own business, but thats what i'm striving for and I believe in obtaining information from people who have been succesful and/or been in similar situations.
What is your reluctance to fill out the 1099? That's unprofessional. I understand it in the sense that you may avoid paying taxes this way, and that it's under the $ threshold - but what about the contractor's side of it? He needs that for his own tax purposes. Unless this is your only freelance job of the year, you should be filling out the 1099 for your own purposes anyway - because if your annual freelance earnings from all jobs exceeds the $600 "hobby income" limit then you're supposed to be declaring these jobs and paying taxes on them, and it's easier to do that if you get the 1099s from your clients, which you won't if you don't fill out the forms for them now.
As for whether you're in the clear legally depends on the jurisdiction and the type of work. If the project is of a type that an unlicensed person cannot design in your jurisdiction, and you provided design, then you've got a problem. It's irrelevant that you labeled the drawings "not for construction" - even schematic design for building types you're not allowed to work on is against the rules in most jurisdictions. Regarding renderings: if they're renderings of someone else's design, or of existing conditions, then you're fine. If they're renderings of your design then you may not be.
You seem confused about what filling out the form means. Filling out the form does not authorize the contractor to deduct taxes. It just allows him to report what he pays to you, and send you a 1099. This shouldn't result in you receiving anything less in payment from him. Yes, you may need to pay taxes on it eventually - though most people doing small side projects can manage to come up with enough business expenses to deduct that they offset all or most of the few hundred to few thousand that they earn.
FYI, the reason people think you aren't telling the full story is that every time you post, you add more information. Take your last post with the assertion that you are giving us the full story. In that post alone you added the following 'new' information:
This is a repeat client you've worked with before.
Previous jobs were small
Previous jobs had a much smaller fee
This job was larger
This job took more time
This job had a higher fee
Client was disgruntled with the fee at the beginning
Your fee of $400 might actually be a $400/month fee
Brud-g. Could you explain what the benefits and purpose for the ein would be in revelance to freelance? I know it's an employment id number but I'm not sure if I qualify?
Aug 16, 16 1:45 pm ·
·
Brud-G,
As others have said... get yourself an E.I.N.
Um.... it is possible I missed something but EIN wouldn't be necessary for ashley (in her independent contractor / freelance work) unless she is hiring employees.
In her case, she would be using her social security number versus an EIN.
Shuellmi,
isn't an llc like $25 and a one sheet form?
Depends on where the LLC is formed.
There's the state fee and the fee that any service a person uses to do up the paper work such as incfile.com or swyftfilings.com. Where I am, the state registration fee (for a domestic LLC) is $100 and then you have the annual report fee of $100. Then you have the registration form and so it goes. It varies from state to state.
Either way, not a big fee in the grand scheme of things.
Just FYI LLCs are not benificial for arch firms. They used to be before congress changed the rules on these many years ago. Architects just still think they should be LLCs because the guys before were LLCs. There are serious problems with these once partners are involved. Sorry for hijacking thread.
Aug 16, 16 3:01 pm ·
·
x intern,
If you can elaborate, it's still good to know. If you feel it is better to elaborate that in another thread or PM, please do so. If possible, quote what you wrote above and follow up to that in a new thread or post.
So, I'm not even going to comment on your low fees. I just sold a painting, as an amateur artist doing it for fun during my free time, for more than what you charged for a design. IT IS NOT A RACE TO THE BOTTOM!
That said, this is why you don't do work with friends or family. For such a low amount it isn't going to be worth going to small claims court, and it certainly isn't worth remaining friends with the guy.
I think your other questions are valid though, and you should find someone in your community who freelances and ask them what they do. Buy them coffee or lunch, and pick their brain a bit. Or consult with a lawyer about your contract for an hour or two. That will cost money, but would be worth it.
And raise your prices. You aren't doing anyone favors.
Sorry I paid a lawyer and cpa to set up the company. He told me why but I can't recall the specific reasons just that there are problems with LLCs in the case of death or partnership disputes. Also as licensed professionals we are not protected by the corporate veil due to professional liability. That's why we carry insurance. I think it comes down to tax benefits in the end. It pays to hire very qualified professionals to set up your company and do your taxes. It seems costly but in the end they will save you more than they cost.
Here in CA, I do occasionally freelance work, sometimes "as-builts" sometimes CD's or renderings. The only thing I need to do is provide my SS# and an address.
The employer has to fill the 1099, not you. You simply receive your 1099 copies at the end of the fiscal year. Taxes are around 30% so keep that in mind and save accordingly.
Finally some good responses! Thanks guys. As for my prices I know they're low, but that was the last of the low prices. I've met with local architects that help me with my contract so the prices are better and contingent with the work I produce. This one was difficult and an anomaly
Freelance work not getting paid
Has anyone on here run into a situation where you did freelance work without a license, however you stated clearly on all documents that you are not a licensed architect and that the work is not intended for construction use and for design purposes only. And at the end of the project the client refused to pay you an amount that was agreed upon. If so is it viable for such work would be upheld for compensation in small claims court?
Send the deadbeat client a box of live spiders.
Of course if it was legally rendered work. What was the work for? If it was non-exempt than NO you cannot sue. An illegal exchange of goods/services is automatically unenforceable. For instance, If I agreed to exchange 1 pound of weed for an old car and then didn't pay you would be shit outta luck. If the services rendered were legal then you can sue.
I haven't done much freelance, but, like you, I've done some as merely a designer for conceptual plans. I never got screwed over, but I would only for no more than a few hundred dollars.
What do you have in writing and was there a retainer? Are they in possession of your drawings?
Spiders are an option, but they only last so long. An envelope of glitter means they will always be tormented by sparkles in the carpet they just can't vacuum up.
The services were for design work. The client is a contractor and i did renders and floor plans so he could show it to the client and retain the work. He agreed to paying the amount and i sent him an invoice, i have paper work suporting that i am not an architect and cannot provide architectural drawings or stamps and that the work is for design purposes only. he agreed to the amount which i also have in paper work to support his aggreeance,
they are in possession of my drawings and my designs, all my drawings have a disclaimer that they cannot be used without my written consent. they do not have my written consent
How did he get the drawings before payment? I've always made it clear they aren't getting anything until I receive money. And yes, I've followed a client to a bank once.
it was through his word that he would pay me and yes i do have proof of him saying this
always collect some type of deposit up front. call it a retainer or a deposit. whatever works for you. don't do any work until the check clears or you've got cash from them in your pocket.
get everything in writing. including promises that he would pay. if you have in writing that X contractor would pay you X amount after you deliver X product by X time, and it is signed by the contractor you can win in small claims i'd opine.
if he doesn't pay up in full, you can go to small claims and you can also be sure to not recommend him to anyone asking for a good builder.
right, i already ensured this is taken to the better business bureau and so forth. I just want to ensure that without an architectural license i am in legal means to collect compensation in a court of law. all my documentation states that i cannot provide those services
It probably depends on the jurisdiction. Someone complained on my advertisement that I was offering architectural services while clearly stating I was an architecture grad, and not licensed. I changed my posting to design services from architectural.
Right, mine is all listed as "design services" i've made it very clear that i will not or ever provide architectural services.
what is their reason for not paying and is it a significant amount?
The reason he does not want to pay the 400$ amount is because he wants me to fill out a 1099 or an employment for I told him I do not need to fill either out because I am not his employee and I do not trust him to have my social security number. He says he doesn't want to pay my taxes however nys I would only have to fill out a 1099 if the amount exceeds 600$
much ado about nothing- fill out the 1099.
Are you a professional or a hack? Strike 1 was offering design services, a la, Balkins. Strike 2 is not conducting yourself like every other business person, with the 1099. We wait with bated breath for the rest of the story...
I don't give my babysitter a 1099, but any business owner wants a 1099 for tax reasons.
You have a lot to learn when it comes to 1099!
The person that asked for your services CAN send out 1099, but is not required to do so under 600. You are required to report regardless how much you made. Can you imagine if you earned 599 daily for a different person? According to you, you don't have to file that?
Making a huge deal about this and being very paranoid about. If I didn't trust people with my SS, I would not be in business at all.
My concern isn't filing and I file with my own taxes at the end of the year. However we were on an agreement to be paid cash, and now all of a sudden that changed. Now the reason I gave him the amount of 400 was to be fair, originally the price came to 800 and I discounted heavily obviously, so I don't understand how you come up with me not wanting to file. If I knew he would want the 1099 I would have charged the original price
All the more reasons to hire professionals.
Also, I am freelance so under nys law I am protected to submit my own taxes. The law abiding for independent contractors/freelance is at no point in time shall I be an employee of the client or treated as an employee to the client
Well I do this on the side, it's a learning process for me. I can't afford at this point to make myself an llc and I would prefer that I maintain freelance until I am licensed.
Do this:
1. Sign the 1099 and get paid
2. File your taxes next year
3. Claim expenses PAID to HIM once you get his information back
he'll get audited for not reporting income coming from you and the IRS doesn't care and it's all up to him to prove that he did not get paid, which will be impossible.
Cruel!
But my concern is every lawyer I've spoken to has told me I do not and should not fill out the 1099 for him
Pay the lawyer 400 to send him a letter stating the law.
Below is the statement that i have now in my proposal, however just wanted to make sure that this is legitimate for this situation as well
Legality of Services: It is understood that designer is a freelance, independent contractor and not an employee of the client and/or contractor. All compensation is agreed upon prior to inception of work, no work shall be delivered until full compensation has been received and cleared by proper agencies and banking institutions. Designer shall be responsible and liable for the reporting of and the payment of all federal, state and/or local taxes with respect to the services performed for the client as an independent contractor, at no point shall compensation for designer be deduced from final agreed upon fees by others for taxation purposes to support the client and or contractor. The client and/or contractor shall at no time assume the designer is an employee of either the client and/or contractor.
Are you a professional or a hack? Strike 1 was offering design services, a la, Balkins. Strike 2 is not conducting yourself like every other business person, with the 1099.
Adding to JeromeS's list: Strike 3 was reducing your fee by 50%.
Well, he was a friend. I'm just trying to see if its A. worth it to take to small claims court. B. fill out the 1099 and recieve less than what was agreed upon , even though the amount is below the minimum of 600$ necessary to fill out a 1099 or C. Just say screw it and do nothing
a la Balkins....
Brilliant.
A, B, or C might depend on whether or not you want to still be friends when this is all over.
Welcome to the big leagues. Everyone knows that a "cash discount" means that you don't plan to report the income, or at least that you reserve the right to not report the income. It's not legal, of course, but happens all the time.
If the amount was over $600, he would have to send you a 1099. If under $600, he's just covering his butt so he doesn't get stuck paying employment or income taxes on the amount he gave you. Many contractors get a wake-up call early in their careers, usually accompanied by a big tax bill, for poor record keeping. Sounds like he may have gotten his wake-up call.
If you're going to do this regularly, you either need to get comfortable with giving out your SS number or you need to suck it up and get an EIN.
Im just asking for opinions, would appreciate advise instead of satire
The amount is under 600, so woodguy. what would you suggest i should do?
Everydayintern, we will not be friends after this
you're an idiot. if he's a friend why didn't he just pay you the $400? i don't think you're giving us the whole story.
have you ever even had a job before? you have to give your SS on any tax form for an employer.
Reason number 5,213 why I stopped doing cash, under $5,000 gigs for "friends" or otherwise..always more trouble than they are worth.
Just get an EIN.
no_form, thanks for your opinion but to answer your question yes i have a job. Thank you.
But as for the whole story, i've stated it. I do renders and designs for this contractor, he pays me. this time he was upset because the job was larger and took more time and because so it cost him more money. I realized he was an idiot when he told me "why are you charging me more" our original jobs were about 150sf, this was 1000sf. He didnt understand why the price increased (realization of this kid being a moron) and was very upset and angry about that. Because of that is the reason he is refusing to pay, however after calming him down last month after i had sent the invoice he agreed he would pay. i gave him ample time, then a few weeks later i reminded him and it was at that point he wanted me to fill out a 1099 after already agreeing to pay the 400 a month prior without the discussion of a 1099, so for those purposes is why i'm asking for opinions.
Listen, you can call me an idiot thats your opinion but please don't question whether i'm portraying a correct story or not. And again I'm asking for opinions regarding this situation not satire. I know alot of people my age and my experience that would'nt even bother trying to start their own business, but thats what i'm striving for and I believe in obtaining information from people who have been succesful and/or been in similar situations.
$400 a month, or $400 total?
What is your reluctance to fill out the 1099? That's unprofessional. I understand it in the sense that you may avoid paying taxes this way, and that it's under the $ threshold - but what about the contractor's side of it? He needs that for his own tax purposes. Unless this is your only freelance job of the year, you should be filling out the 1099 for your own purposes anyway - because if your annual freelance earnings from all jobs exceeds the $600 "hobby income" limit then you're supposed to be declaring these jobs and paying taxes on them, and it's easier to do that if you get the 1099s from your clients, which you won't if you don't fill out the forms for them now.
As for whether you're in the clear legally depends on the jurisdiction and the type of work. If the project is of a type that an unlicensed person cannot design in your jurisdiction, and you provided design, then you've got a problem. It's irrelevant that you labeled the drawings "not for construction" - even schematic design for building types you're not allowed to work on is against the rules in most jurisdictions. Regarding renderings: if they're renderings of someone else's design, or of existing conditions, then you're fine. If they're renderings of your design then you may not be.
As others have said... get yourself an E.I.N.
You seem confused about what filling out the form means. Filling out the form does not authorize the contractor to deduct taxes. It just allows him to report what he pays to you, and send you a 1099. This shouldn't result in you receiving anything less in payment from him. Yes, you may need to pay taxes on it eventually - though most people doing small side projects can manage to come up with enough business expenses to deduct that they offset all or most of the few hundred to few thousand that they earn.
FYI, the reason people think you aren't telling the full story is that every time you post, you add more information. Take your last post with the assertion that you are giving us the full story. In that post alone you added the following 'new' information:
And yet, we still don't have the full story.
isn't an llc like $25 and a one sheet form?
What else of the story do you assume exists? That's the full story, and the fee was 400$ for this job
Spontaneous combustion , thanks I was curious about what would be deducted that was helpful
Brud-g. Could you explain what the benefits and purpose for the ein would be in revelance to freelance? I know it's an employment id number but I'm not sure if I qualify?
Brud-G,
As others have said... get yourself an E.I.N.
Um.... it is possible I missed something but EIN wouldn't be necessary for ashley (in her independent contractor / freelance work) unless she is hiring employees.
In her case, she would be using her social security number versus an EIN.
Shuellmi,
isn't an llc like $25 and a one sheet form?
Depends on where the LLC is formed.
There's the state fee and the fee that any service a person uses to do up the paper work such as incfile.com or swyftfilings.com. Where I am, the state registration fee (for a domestic LLC) is $100 and then you have the annual report fee of $100. Then you have the registration form and so it goes. It varies from state to state.
Either way, not a big fee in the grand scheme of things.
x intern,
If you can elaborate, it's still good to know. If you feel it is better to elaborate that in another thread or PM, please do so. If possible, quote what you wrote above and follow up to that in a new thread or post.
Thanks in advance.
So, I'm not even going to comment on your low fees. I just sold a painting, as an amateur artist doing it for fun during my free time, for more than what you charged for a design. IT IS NOT A RACE TO THE BOTTOM!
That said, this is why you don't do work with friends or family. For such a low amount it isn't going to be worth going to small claims court, and it certainly isn't worth remaining friends with the guy.
I think your other questions are valid though, and you should find someone in your community who freelances and ask them what they do. Buy them coffee or lunch, and pick their brain a bit. Or consult with a lawyer about your contract for an hour or two. That will cost money, but would be worth it.
And raise your prices. You aren't doing anyone favors.
Here in CA, I do occasionally freelance work, sometimes "as-builts" sometimes CD's or renderings. The only thing I need to do is provide my SS# and an address.
The employer has to fill the 1099, not you. You simply receive your 1099 copies at the end of the fiscal year. Taxes are around 30% so keep that in mind and save accordingly.
Finally some good responses! Thanks guys. As for my prices I know they're low, but that was the last of the low prices. I've met with local architects that help me with my contract so the prices are better and contingent with the work I produce. This one was difficult and an anomaly
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