1099 taxes - donaldmccauley - 3/7/2004 - 11:52:24 AM

Need opinions on taking a Window replacement sales position that involves driving my own car about 2,000 miles per month in the Chicago suburbs and not getting any expense allowances. Would also be filing a "1099 form." Health insurance is available after 6 months. Average commission earnings is $45,000 - $55,000. This would be my first full-time job in the sales world. It seems like a nice fit based on no cold calling and going to customers homes. WOULD I BE CRAZY TO TAKE THIS JOB? Any and all opinions would be greatly appreciated. Thanks!

Re: 1099 taxes - NJ Sales Pro - 3/7/2004 - 1:29:58 PM

"It seems like a nice fit based on no cold calling and going to customers homes. WOULD I BE CRAZY TO TAKE THIS JOB? Any and all opinions would be greatly appreciated. Thanks!" NO cold calling? No clients' homes? Then how do you expect to sell windows to clients without seeing them, understanding their needs, and showing samples? Sounds too goo to be true! AND, you'd be an independent rep (which is what a 1099 form indicates to the IRS); Obviously, you'd be visiting clients and maybe prospects... YOU have to figure out your overall car expenses including repairs (if your car is older) because 2k miles per month is an awful lot of wear and tear on your vehical. I just replaced my plugs, rotor, distributor, cap, and had a tune up on my car and it cost me 550.00. So you have to analyze this situation. Also you said your average commission (meaning you successfully meet 80% to 100% of quota) is 45k to 55k - not bad, but what if the market sucks or you fail to make a lot of sales immediately? Just some things to think about. If you think the market is good, then go for it!

Liability is largely on you - Telecom-Girl - 3/7/2004 - 5:36:06 PM

As an Independent Contractor receiving a 1099, you will get to write off a bit of your expenses (you'll have to be good with keeping track of receipts, mileage used for work, and other details) You won't have any of the "hidden" insurance packages that an employer keeps on you, such as liability, life, disability or Workman's Comp. If you get injured at work, you have no recourse, even if the injury is severe enough to where you can never go back. However, being totally crippled in an accident is somewhat rare, but what is NOT rare is your risk of liability. If you go to someones' home, and the homeowner claims that your shoes ruined their priceless rug, it would be YOU that is responsible, not the employer. The fact that you are going to people's homes greatly amplifies the risk of a lawsuit. I am also not sure how much liability you would sholder if something goes wrong with the goods that were sold (say, you sold a skylight that leaked). I think there could be a chance that you could be named in a lawsuit for damages caused by the bad skylight. I have done this kind of work (technically it wasn't sales), and I refuse to go to other people's homes. You don't know what is behind the door. But that's just my 2 centavos.

Re: 1099 taxes - MFBR - 4/16/2004 - 7:13:10 AM

I have held a similar sales position for a reputable company for nearly nine years. The base salary, commissions, autonomy, etc., by far outweigh the auto expense deficit. You make up the difference at tax time by depreciating your car appropriately and claiming mileage and other car expenses. I say, "go for it!" if the job truly appeals to you and it is a legitimate opportunity.

Re: 1099 taxes - MFBR - 4/16/2004 - 7:14:11 AM

I have held a similar sales position for a reputable company for nearly nine years. The base salary, commissions, autonomy, etc., by far outweigh the auto expense deficit. You make up the difference at tax time by depreciating your car appropriately and claiming mileage and other car expenses. I say, "go for it!" if the job truly appeals to you and it is a legitimate opportunity.

Re: 1099 taxes - Justaman 334 - 4/17/2004 - 7:15:48 PM

Donald, That a lot of miles to be putting on your car. What I mean is that if anything breaks down you have to foot the bill. And from what i understand you have to pay for your own gas? Don't get me wrong the money sounds good but you need to sit down and weigh this job out. If nothing else take the job until something better came along but there is a lot that you have to deside on. Best luck to you. Justaman 334

Re: If I can do it, so can you... - doodleduds - 4/17/2004 - 8:07:09 PM

I'm in your exact situation now and can tell you that it is working for me. I never did outside sales before either. I had a great training program, and have great products. I sell replacement windows for a company in NJ and made about $70,000 in my first 12 months with a close ratio of 55%. Oh yeah... and I'm a girl. A little unheard of in this industry. This year I should get better. Management is now looking into getting me a company car. That would be nice. I can tell you however that you have to be extremely good at time management or it will consume your life. Our windows, by the way are manufactured in Chigago. Could be the same co.??? Good luck! Kathy

Re: 1099 taxes - twocrazyguys - 4/17/2004 - 9:52:34 PM

I personally think that the position you described is not worth it. If you were told correctly, Over two thousand miles a month for $55,000? And as a independent 1099 contractor? What about benefits? Bonuses? Is this 100% commission? I don't think so!

Re: 1099 taxes - dad11 - 4/18/2004 - 12:52:53 AM

I am in the home improvement industry, and have been so for 3 years, 1st year, 42,000, second year 74,000, this year on course for 125,00.... If you can handle the hours, and 7 days a week, go for it!!!!!!!!!!!

What are you really afraid of? - nlimbo - 4/18/2004 - 9:07:12 PM

Hey, I've been in worst "sales positions." Most outside sales jobs where you are an independent rep don't pay for anything. Before you take the job, you have to really sit down and look at your finances. Budget for gas, tires, insurance and oil changes for your car, don't forget depreciation from all the milage on it, business clothing and drycleaning, food, travel, cell phone bills, etc for a year and see if what you would make would give you at least a 60% profit before taxes to pay your bills. You know the taxes on commission would be abotu 38% if I'm not mistaken. If it doesn't, hang it up and find another opportunity. My first outside sales job put me in bankruptcy. I spent more on mainting well, my business, than what I made off my sales! Please be carefull.:-(

What are you really afraid of? - nlimbo - 4/18/2004 - 9:07:18 PM

Hey, I've been in worst "sales positions." Most outside sales jobs where you are an independent rep don't pay for anything. Before you take the job, you have to really sit down and look at your finances. Budget for gas, tires, insurance and oil changes for your car, don't forget depreciation from all the milage on it, business clothing and drycleaning, food, travel, cell phone bills, etc for a year and see if what you would make would give you at least a 60% profit before taxes to pay your bills. You know the taxes on commission would be abotu 38% if I'm not mistaken. If it doesn't, hang it up and find another opportunity. My first outside sales job put me in bankruptcy. I spent more on mainting well, my business, than what I made off my sales! Please be carefull.:-(

Being prepared - twocrazyguys - 4/19/2004 - 7:07:21 AM

I agree with nlimbo. If you are not prepared for the worst, don't do it! If you don't have a cash reserve before setting out on a new found sales career, the daily and monthly maintenance can break you. Did you say you are being compensated for gas, etc..? Is your vehicle in tip top shape? If you are not a seasoned sales vet, and don't have any definite leads. Your first few months are going to be rather rough, especially if you've never been in sales before. Sales is not for everyone! You really have to have a true love for what you do, and believe in what you are selling to be successful.

Re: 1099 taxes - Jacques Werth - 4/19/2004 - 9:18:28 AM

The subject line of your post should be the least of your concerns. If you have to pay a lot of taxes it means you've earned a lot of money. The real risk is in not having to pay taxes. The statement, "Average commission earnings is $45,000 - $55,000," is erroneous by definition. An average is NOT expressed as a range of numbers. Did the employer put it in writing? Did they also give you information about their salesperson retention rate (turnover)? Do you really believe them? Most top salespeople prefer to work on straight commissions because there is no upper limit to their earnings. However, it you're not with a good, ethical company, and/or if you're not a skilled, confident salesperson, it's a risky proposition - at best.

Re: 1099 taxes - Jacques Werth - 4/19/2004 - 9:18:36 AM

The subject line of your post should be the least of your concerns. If you have to pay a lot of taxes it means you've earned a lot of money. The real risk is in not having to pay taxes. The statement, "Average commission earnings is $45,000 - $55,000," is erroneous by definition. An average is NOT expressed as a range of numbers. Did the employer put it in writing? Did they also give you information about their salesperson retention rate (turnover)? Do you really believe them? Most top salespeople prefer to work on straight commissions because there is no upper limit to their earnings. However, it you're not with a good, ethical company, and/or if you're not a skilled, confident salesperson, it's a risky proposition - at best.

Re: 1099 taxes - Jacques Werth - 4/19/2004 - 9:21:51 AM

The subject line of your post should be the least of your concerns. If you have to pay a lot of taxes it means you've earned a lot of money. The real risk is in not having to pay taxes. The statement, "Average commission earnings is $45,000 - $55,000," is erroneous by definition. An average is NOT expressed as a range of numbers. Did the employer put it in writing? Did they also give you information about their salesperson retention rate (turnover)? Do you really believe them? Most top salespeople prefer to work on straight commissions because there is no upper limit to their earnings. However, it you're not with a good, ethical company, and/or if you're not a skilled, confident salesperson, it's a risky proposition - at best. High Probability Selling

Re: 1099 taxes - Jacques Werth - 4/19/2004 - 9:22:14 AM

The subject line of your post should be the least of your concerns. If you have to pay a lot of taxes it means you've earned a lot of money. The real risk is in not having to pay taxes. The statement, "Average commission earnings is $45,000 - $55,000," is erroneous by definition. An average is NOT expressed as a range of numbers. Did the employer put it in writing? Did they also give you information about their salesperson retention rate (turnover)? Do you really believe them? Most top salespeople prefer to work on straight commissions because there is no upper limit to their earnings. However, it you're not with a good, ethical company, and/or if you're not a skilled, confident salesperson, it's a risky proposition - at best. High Probability Selling

Re: 1099 taxes - Jacques Werth - 4/19/2004 - 9:36:50 AM

The subject line of your post should be the least of your concerns. If you have to pay a lot of taxes it means you've earned a lot of money. The real risk is in not having to pay taxes. The statement, "Average commission earnings is $45,000 - $55,000," is erroneous by definition. An average is NOT expressed as a range of numbers. Did the employer put it in writing? Did they also give you information about their salesperson retention rate (turnover)? Do you really believe them? Most top salespeople prefer to work on straight commissions because there is no upper limit to their earnings. However, it you're not with a good, ethical company, and/or if you're not a skilled, confident salesperson, it's a risky proposition - at best. High Probability Selling

Re: 1099 taxes - blkjack813 - 4/19/2004 - 9:19:34 PM

Take it from me> I have been there and am still paying off taxes. Did you ever ask why you would be an independant contractor? If you truly are than you are free to work for any sales org. as well as the one you are speaking of. Ask them how they would feel about that? I sold kitchens , decks , fireplaces and than the Gulf War broke and Banks tightened up and unless those folks were tier 1 triple star applicants I could not get a deal bought I ended up selling second and third mortgages to folks trying to finance them . be good to yourself and work as an employee. for a companythats cares a little for you. you are loolking at a 30% tax bracket Fuel these days its costing me $2.00 a gal plus wear on the car. The competition in your field is stronger now with all the home centers and sears and jimmy the handyman dow n the srteet. You are setting yourself up for a 28k a year job. dont do it!!!!

Re: 1099 taxes - chuck_1441 - 4/20/2004 - 11:31:38 AM

If this is your first time as a full time salesperson, I can assume you haven't been in sales for a great length of time. Therefore my 1st point is this position sounds like it will pay you adequately based on your lack of sales experience. As to the issue regarding the car let me speak from an accountants point of view. The IRS gives a deduction of I belive .34 cents per mile for business use. Why this amount? This is the cost per mile for transportation. (Cost includes maintenance, DMV fees, insurance, gasoline and depreciation of vehicle). Since the average person drive 12k annual, yours would be 24k. Monthly + additinal 1,000 miles. Mutiply 1,000 X .34/per mile = $340 per month additonal expense. You must put this money aside every month. It is not income, but business expense and needs to be set aside because you will need this money later to purchase another vehicle. Why? Because you are wearing out your vehicle faster. Glad to help chudiburgh

Re: 1099 taxes - chuck_1441 - 4/20/2004 - 11:31:46 AM

If this is your first time as a full time salesperson, I can assume you haven't been in sales for a great length of time. Therefore my 1st point is this position sounds like it will pay you adequately based on your lack of sales experience. As to the issue regarding the car let me speak from an accountants point of view. The IRS gives a deduction of I belive .34 cents per mile for business use. Why this amount? This is the cost per mile for transportation. (Cost includes maintenance, DMV fees, insurance, gasoline and depreciation of vehicle). Since the average person drive 12k annual, yours would be 24k. Monthly + additinal 1,000 miles. Mutiply 1,000 X .34/per mile = $340 per month additonal expense. You must put this money aside every month. It is not income, but business expense and needs to be set aside because you will need this money later to purchase another vehicle. Why? Because you are wearing out your vehicle faster. Glad to help chudiburgh

Re: 1099 taxes - chuck_1441 - 4/20/2004 - 11:32:54 AM

If this is your first time as a full time salesperson, I can assume you haven't been in sales for a great length of time. Therefore my 1st point is this position sounds like it will pay you adequately based on your lack of sales experience. As to the issue regarding the car let me speak from an accountants point of view. The IRS gives a deduction of I belive .34 cents per mile for business use. Why this amount? This is the cost per mile for transportation. (Cost includes maintenance, DMV fees, insurance, gasoline and depreciation of vehicle). Since the average person drive 12k annual, yours would be 24k. Monthly + additinal 1,000 miles. Mutiply 1,000 X .34/per mile = $340 per month additonal expense. You must put this money aside every month. It is not income, but business expense and needs to be set aside because you will need this money later to purchase another vehicle. Why? Because you are wearing out your vehicle faster. Glad to help chudiburgh