Frequently Asked Questions


Taxes

Note that the following information is meant as guidance, not professional tax advice. If you have any questions about your taxes, ask a tax professional.

If I take jobs in the Blucadia Marketplace, does Blucadia issue a 1099?
Blucadia itself does not hire Cops, and is NOT a staffing agency. Blucadia is an online Marketplace that connects hiring companies to Cops looking for off-duty opportunities. We facilitate a 1099 relationship between the hiring company and the Cop. All 1099s issued for work performed by a Cop are issued by the Customer hiring the Cop. To put it another way, Blucadia does not issue 1099s to Cops.
I’ve worked for a staffing company in the past, and have been issued a W-2 for taxes. Why doesn’t Blucadia do the same?
Staffing agencies are treated differently than online Marketplaces. The 1099 relationship we establish and manage for cops is intentional and is based on very specific federal and state laws and guidelines, and have been subjected to substantial legal review.

Commissioned Peace Officers have special exemptions to work off-duty without required licensing. However, this exemption is not available to retired cops, tribal police and even commissioned personnel who are not currently employed by a city, county or state agency. Many staffing agencies employ non-active or non-commissioned individuals, meaning they do not qualify for this exemption. On the other hand, only active commissioned peace officers are allowed on the Blucadia Marketplace - and fully meet the special exemption. Staffing agency rulings Do Not Apply to Blucadia.
Are taxes withheld if I’m an independent contractor?
No. Unlike the work you do for your Department, no state or federal taxes are withheld from the income you earn as an independent contractor. You will likely want to set-aside funds from your income to avoid paying a lot at tax time.
If I receive a 1099 for off-duty work, what is my responsibility for federal taxes?
All police officers working off-duty are required to pay taxes on the income they earn, whether as an employee of a staffing agency (receiving a W-2), or as an independent contractor, operating their own side business. If you receive at least $600 in income from any source (business or individual), you will receive a 1099-MISC from that source. Even if you don’t receive a 1099-MISC, you are still required to pay taxes on that income (even if less than $600.)
If I receive a 1099 for off-duty work, what is my responsibility for state and local taxes?
To our knowledge, all states require either income and/or business taxes be paid for income generated within their state. There’s not a single set of requirements - they vary state by state. A good central resource is from the the Small Business Administration (SBA) - Determine your State Tax Obligations.

Local tax requirements also vary. The SBA site referenced above also provides guidance for specific localities.
How much should I set aside to meet my tax obligations as an independent contractor?
Self-employment income is subject to a 15.3% self-employment tax, which covers your required contributions to Social Security and Medicare. In addition, you’ll have to account for ordinary taxes on your total net income. The total amount to set aside depends on your total income, both W-2 and 1099. You might expect to set aside 25-40% of non-employee income, depending on your tax bracket and deductions. There are online calculators available to assist you, including ones from the IRS and Intuit.
Are there any services available to help me set aside funds to help meet my tax obligations?
We think the best answer is to use a 1099 withholding service like Painless 1099. You designate your Blucadia payments be sent to an account they create on your behalf. When payments come in, they set aside money to cover your taxes, and deposit the balance into your personal checking or savings account.Painless 1099. You designate your Blucadia payments be sent to an account they create on your behalf. When payments come in, they set aside money to cover your taxes, and deposit the balance into your personal checking or savings account.

Come tax time (annually or quarterly as appropriate), you withdraw the set-aside funds, or direct deposit your taxes to the IRS. Transfers from Painless 1099 take 1-2 business days, and their fees are less than half a percent of every transaction.
Do I need to pay taxes quarterly?
According to the IRS, if your tax liability is $1,000 or more for the year, you are expected to make estimated tax payments. For instance, if you owed more than $1,000 in taxes when you filed your tax return last year, the IRS expects that you will either have more tax withheld from your paychecks or that you’ll make estimated tax payments the following year.

More details on estimated tax payments can be found in the IRS article "What Is Estimated Tax & Who Does It Apply To?"
I’ve heard that I may be at risk of tax evasion if I work as an independent contractor. Is this true?
This is a misleading, if not outright false assertion! State agencies responsible for business or income tax revenue have been known to pursue companies for tax premiums where the company is treating off-duty officers as “employees”, but the company is compensating the individuals as “1099-MISC independent contractors” and not remitting tax premiums back to the state.

Whether off-duty officers are determined to be employees of a company is based upon a 3-part test established by the Internal Revenue Service.

To summarize, per the IRS, determining whether the person providing service is an employee or an independent contractor, all information that provides evidence of the degree of control and independence must be considered. The facts that provide evidence of the degree of control and independence fall into three categories:

  1. Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?

    Blucadia and the Customers who hire Cops do not instruct Cops on how to do the job, do not evaluate Cops, and do not Train Cops.
  2. Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how the worker is paid, whether expenses are reimbursed, who provides tools/supplies.)

    Blucadia and the Customers who hire Cops do not make a significant investment in equipment - the Cops do. Neither Blucadia or the Customers pay the Cops’ expenses - the Cops do. Cops, as independent contractors, make investments in the tools of their trade, pay their own expenses, and have the opportunity to make a profit or loss through their independent contractor business. Finally, Cop is paid a set amount depending on the length of their shift.
  3. Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?

    Cops enter into an agreement with the Customer to provide their services as an independent contractor. Neither Blucadia nor the Customer offer Cops any type of employee benefits such as medical insurance, pension plans, paid vacation or sick days. The Customer is not hiring a Cop with any expectation that the relationship will continue indefinitely. The Cop is not providing services which are a key aspect of the Customer’s business.

While other companies that manage off-duty services have run into difficulty because they failed to satisfy these tests, Blucadia and its Customers do not have these same issues.
Finally, The IRS recognizes that off-duty police officers have the right to categorize themselves as 1099 independent contractor businesses so long as they satisfy these tests. According to Internal Revenue Service Memorandum SCA 1998-037:
...it is possible for an off-duty officer to be an employee of a police department for which he is employed on a full-time basis or an employee of the recipient of the off-duty services, or an officer may be properly classified as an independent contractor. Therefore, it is inappropriate to routinely accept or challenge the worker classification implicit in the document (Form 1099 or W-2) received by off-duty police officers in Louisiana or elsewhere.
Working as an independent contractor seems overly complicated. Are there any advantages?
Yes!

Compared to W-2 jobs, 1099 or independent contractor jobs pay more to the Cop who claims them. While the Cop does have additional obligations for taxes and (potentially) business license requirements, with a little foresight and planning, and using tools like Painless 1099, a savvy Cop, working as an independent contractor, can substantially decrease their federal tax liabilities, save significantly more for retirement, and plan for their family’s financial future.

The Blucadia platform is a platform designed by a cop with cops in mind. The intent of the program is to help Cops make more money, help manage their ongoing tax obligations, and to help them directly manage their own schedule and have access to many more jobs and opportunities to leverage their specific and unique training.

Business License

Do I need a business license to work as an independent contractor?
Business license requirements vary based on the state and locality in which you work. Several states, including Washington and Alaska, require all independent contractors to obtain business licenses. The Small Business Administration maintains a page linking to each state’s business licensing requirements.

In addition, many cities, counties, and municipalities require local business licenses. Verify the requirement with your local government licensing agency, or through your state’s licensing department.

Insurance

What’s my liability coverage if something happens during an off-duty job?
Many 1099 contractors carry additional insurance to protect their businesses and their persons. These added coverages mean added costs, which may be significant. Blucadia addresses this need, without any cost to the Cop.

Blucadia offers a first of its kind Liability Insurance Policy through AIG, one of the world’s largest insurance providers. The Coverage plan limits are $500,000 per Claim, and include paying all defense expenses for each Cop working the Event. Said another way, this coverage starts fresh with every new shift for every Cop, every day. The policy also names the department, the municipality, the Customer, Cops and Departments from other jurisdictions working the Event, and the Blucadia Marketplace. Costs for this benefit are borne by the Customer, and are 100% free to Cops and Departments.
What coverage do I have if I get injured during an off-duty job?
Blucadia offers a Supplemental Accident Insurance Policy in the event a Cop is injured on and off the job. Our Accident Insurance is provided by Colonial Life & Accident Insurance Company, another large and highly respected insurance company. After completion of one Shift through the Blucadia Marketplace, this policy covers the Cop for an entire year whether on a job or not, and becomes active the first day following the month of their completed shift. To maintain this benefit, a Cop need only complete one shift within the Blucadia Marketplace every twelve months.
Blucadia is asking me for personal details in order to obtain Supplemental Accident Insurance. What gives?
Enrollment and beneficiary information are used solely for providing the insurance to you and your beneficiaries, and will only be made available to Colonial Life & Accident Insurance Company (similar to other personal insurance requirements you may have). Note that this benefit is provided at absolutely no cost to you, your family or your department. All costs are borne by the Customer.