Select Page
Paint Chip Repair

Paint Chip Repair

Scuffs, minor scratches, paint flaking, bumper scuffs, and deep scratches. All of these kinds of minor damage can are be repaired without the services of a body shop. A paint chip repair can have your vehicle looking like new most times in less than a day.

Paint Chip Repair

Compare a detail shop’s micro paint chip repair and touch-up services to those of a local body shop and the advantages to staying far away from a body shop are obvious:

paint chip scratch repair

  • Cost: body shops replace damaged parts with new and paint them, dramatically increasing your costs. With the expense of a new bumper at approx. $350 and the painting of that bumper an additional $350, your body shop costs are $700. A Micro Paint Chip Repair or Touch-up Painting of that bumper at $180 to $250 will show you definite savings!
  • Time: A Micro Paint Chip Repair Touch-up Service takes less than a day to complete. Try getting a body shop to do anything on your vehicle in less than a day. The time savings is obvious!

Scuff and Scratch Removal

Many times paint chip repair, and touch-up may not even be necessary. See our scuff and scratch removal page for more information on this service before you consider paint touch-up, chip repair or additional damage repair. You, the consumer, should exhaust all of your possible options for the inexpensive repair of your vehicle.

Handled Quickly and Efficiently as Part of a Full-Service Detail Package

Where do these scuffs mostly show up? Most of the times where any high traffic contact exists, such as door handles and places like the gas door where the car is accidentally bumped or brushed with the gas pump nozzle or handle. Bumper scuffs also happen by brushes with other vehicles and walls. These can be handled quickly and efficiently as part of a full-service detail package.

Do you want this service performed in your area? We have a criteria page of what to look for in a reconditioning show performing minor body repairs. This is something you want to review. Also, make sure you review our Proper Insurance page to find a list of questions to ask about insurance before you agree to have the work done.

We hope you enjoyed this “how to” tip sheet. Access more tips, training, and insight by subscribing to the AutoDetailGuide.com E-Newsletter.

Car Upholstery Repair

Car Upholstery Repair

If you’ve had a vehicle for any length of time, it’s inevitable that you’ll eventually experience wear and tear damage to your vehicle upholstery.

It could be a rip in your vinyl seat, a cigarette burn, fraying vinyl or leather armrests, the possibilities are endless.

As are the car upholstery repair options available to fix these problems.

People are Keeping Cars Longer

The cost of many new cars today is as much as our parents paid for their first house. Which is kind of insane to think about.

So it’s only natural that people are keeping cars longer than in past years.

Over time, wear and tear on car upholstery starts to become a problem that needs fixing.

And not only because of aesthetics.

Worn or delaminated vinyl and leather car upholstery not only looks bad, but it also feels horrible. And sometimes it hurts.

Did you ever get into a vehicle and rest your elbow onto an armrest as hard, frayed, pointy vinyl poked your skin?

Fixing car upholstery damage is sometimes referred to as leather and vinyl repair.

Regardless of what it’s called, as auto reconditioning services go, car upholstery repair is a fast-growing, high demand service.

car-upholstery-repair-leather-vinyl-repair-AutoDetailGuide

Leather and Vinyl Car Upholstery Repair

A good auto reconditioning technician can repair virtually any type of material, from leather and vinyl to velour or fabric.

The nice part of leather and vinyl car upholstery repair is the flexibility in choosing the type of work to be done. It doesn’t always have to be repaired to ‘like new’ condition.

Sometimes making it look new will make the rest of the car look bad.

Whether it needs fully rebuilt, or simply touched up, the tech can easily make that decision after visual inspection of the damage.

And they can offer the customer more than one option based on their budget or overall condition of the rest of the vehicle.

Either way, most of the time the repair is actually stronger than even the original surrounding upholstery material.

Many parts of the car that are covered in leather or vinyl upholstery can be repaired rather than replaced.

From car seats and armrests to vinyl and leather dashboards and headrests. Replacement of these items should be a last resort if for no other reason than cost. It’s expensive to replace a worn armrest. And a dashboard cost is ridiculous.

Car upholstery repair of damaged leather and vinyl is generally the fastest and least costly way to go.

How much is the cost for car upholstery repair?

Depending on the severity of the damage, the cost for car upholstery repair ranges depending on both the severity of the damage and the type of upholstery material needing repair. For example, a one-inch tear in a vinyl seat might take an hour to repair and cost $50 to $70. While an armrest that’s covered in frayed or split leather might take one to two days depending on dry time and cost a few hundred dollars to fix.

It’s worth remembering that the cost of car upholstery repair is nothing when compared to the replacement cost of a seat, dashboard, or armrest.

As always make sure the technician is insuredbefore beginning work on your vehicle.

Check with your local Detail shop

Before you decide to get a damaged car seat replaced, check with your local detail shop first.

Many detail shops have in-house reconditioning services. So call around and ask about car upholstery repair services. Most cities and even smaller towns have at least one shop that offers these types of services.

We hope you enjoyed this overview of Car Upholstery Repair and Leather and Vinyl Repair Tips. Access more tips, training, and insight by subscribing to the AutoDetailGuide.com E-Newsletter. We are also very active on Facebook and Twitter.

Suggested Pages to Check Out

Detail Shop Liability Insurance Page with Info on Garage Keepers Liability Coverage

1099 Contractors and Other Detail Shop Tax Issues

Go Back To Home Auto Detailing Step-by-Step Page

Auto Detailing Liability Insurance [Updated 2021]

Auto Detailing Liability Insurance [Updated 2021]

Insurance-AutoDetailGuide

Auto Detailing Liability Insurance

One of the most important aspects of running any kind of business is having the right business insurance coverage. Auto Detailing Liability Insurance is no less important.

At an auto detailing shop, your insurance requirements are more specific than many other businesses. This is due to the fact that you have higher potential liabilities while you are working on your customer vehicles. As a result, you also need a more specific version of liability insurance called Garage Keepers Liability Insurance.

What is Garage Keepers Liability Insurance?

General liability insurance alone won’t cut it, you need garage keepers liability to cover the vehicle while in your care, custody, and control. You can learn more in this article on our website about it and you should also discuss it with your insurance agent.

Liability-Insurance-ADG

What is Proof of Insurance?

As a business owner, you have an obligation to protect both you and your customers with insurance coverage on your business. When you have the insurance, prove it to your customers. A certificate of insurance aka proof of insurance is the best way to do that. The certificate details exactly what your coverage includes and how it pertains to the services you are performing.

Reputable detail shops will have one right in their office that they can copy, fax, or email to you. Many of our customers will simply ask us to fax them a copy before they bring their car down for service.

Why Do Customers Ask for a Certificate of Insurance?

  • Regardless of what kind of vehicle you have, you want to make sure it’s protected while under the care, custody, and control of the shop and it’s employees;
  • If you have a more expensive vehicle you want to make sure their coverage exceeds the value of your car. For example, a $90,000 BMW owner would want to look for at least $100,000 in “Garage Keepers Liability Coverage”. This means that the shop is covered regardless if they drive your car into a wall or the shop burns down while your car is in it;
  • General Liability will not cover your car! This is important. A lot of shops will try and get around having Garage Keepers Liability while simply carrying General Liability and telling their customers they are fully insured. They are not. General Liability covers your painter if he drops his ladder through your stained glass window, but he’s not in control of your house when he does that damage. Garage Keepers Liability covers the shop while they are in the care, custody, and control of your vehicle. There’s an important difference. Most reputable shops carry both General and Garage Keepers Liability.
  • You want to call the insurance agent that is listed on the certificate and make sure to check on auto detailing liability insurance and garage keepers liability insurance coverage. Also, verify that the policy coverage will be in force when you bring your car down to the shop. They will usually verify this for you over the phone. You can also ask them how long they’ve had the policy and whether or not they’ve had any claims. Sometimes the agent will tell you and sometimes they won’t. They will at least tell you whether or not the policy is current, active, and in force.

Care, Custody, and Control

So why is auto detailing liability insurance so important from a shop owner perspective? Here are some things you may not have thought of. Did you know that while your customer’s vehicle is in your care, custody, and control (the three C’s), you are liable for their vehicle?

Don’t Use Personal Auto Insurance for Business

Small businesses are frequently caught committing fraud. Many times without knowing it. They soon find out that ignorance is never a defense when it comes to breaking the law.

How are these businesses committing fraud? One way is by using personal auto insurance as the business auto insurance coverage. As ridiculous as this sounds, it happens often.

Get caught and you’re screwed. Especially if you lie to an insurance agent, claims adjuster, police officer, or customer about having the proper insurance. This has the potential to land you in court or possibly even jail. It’s a big deal, so get the right insurance coverage and don’t play games with your future.

It Can Happen to You

The first thing shop owners tell me when it comes to insurance coverage is, “I’ve never messed anything up, never had a claim, never had a problem.” Same old story, different day. So you don’t think it can happen to you? Think again! I tell people they just jinxed themselves by telling me that. Here are some of the things that have happened at my shops and mobile rigs over the years:

  • Burned the paint off a car with a high-speed buffer. One of my detailers went straight to the metal thinking it was “dirt” he was buffing off.
  • Ruined all the carpets in a Mercedes after leaving them too wet by forgetting to extract the water from the carpets after cleaning.
  • Accidentally etched a windshield with acidic cleaner. This happened several times until we finally switched to a non-etching cleaner because the windshields were costing us so much money.
  • Backed a car into another customer car. Inside our shop. Yes, it happened. Several times.
  • Drove a Limo through our giant shop garage door. This happened in both forward and reverse, with the same guy stuck between seats cleaning each time. I moved him to our industrial pressure washing team where he wasn’t driving anything. And he became one of my most loyal employees.

These are just a few examples of the many “accidents” that have all happened over the years. It just goes with the territory when you have a booming business with lots of employees. The courts and insurance carriers don’t care if you “didn’t know.” You are expected to know these things if you are in business.

Nothing Good Comes From Lies

So get proper insurance coverage for your business. Start with Auto Detailing Liability Insurance and then go from there. It’s not the only insurance you need to be in business, but it’s a great start.

And never lie. I don’t mean that from a morality basis. It’s just bad for business. Nothing good comes from lies. A customer will catch you and put the word out about you and your business. Trust is almost impossible to earn back after you’ve been caught in a lie. Insurance carriers will drop you, or worse. Other businesses with blackball you. I’ve seen what happens to detailers that lie to dealerships and get caught. You don’t want this to be you. So just be honest.

And you need to set an example in your business. We had a zero-tolerance policy at our shops. Our guys knew the rule, “you lie, you’re out”. Simple.

Liability-Insurance-ADG

1099 Contractors or Cash Workers?

When it comes to insurance, another important aspect to think about is the classification of your employees. Are you a business with 1099 contractors or cash workers? If you are, you need to think carefully about how you classify your workers.

Am I passing judgment? Probably. We never had this situation in my businesses. When we were growing fast, there were a few times I had to borrow money from my personal savings to cover payroll, employment taxes, etc. Just workers comp alone will kill many small businesses. I get it. I even missed a few quarterly tax payments when we had several bad months in a row. Getting caught-up nearly killed my business. So I’m telling you from experience. I get what you are going through.

Pass The IRS Criteria to be Considered a Business

Taxes are an unfortunate part of any business. Just keep up with them and everything will go smoother for you.

Paying workers by check as a 1099 independent contractor is inappropriate unless they have their own business. They need to pass specific IRS criteria to be considered a business. Essentially, that means you hire them to do a job, then you leave them to do it. They don’t use your equipment or listen to you tell them how to do their job.

And the most important item? They must have their own insurance. At a minimum, your contractor needs their own liability insurance. All businesses should have this. It’s just good business.

Other insurance coverage depends on the services you offer and the state where your business is located. For example, depending on your state, the contractor might also need to provide you with a proof of coverage certificate for workers’ compensation insurance.

What is Workers’ Compensation Insurance?

Worker’s compensation coverage, also known as worker’s comp, is a type of business insurance that provides benefits to employees that suffer work-related injury or illness. In most states, workers’ comp is: 1) mandatory for employers; 2) replaces 66 2/3% of employee wages; 3) includes payment of medical costs associated with their work-related injury or illness. These benefits are provided to all employees covered under the policy, in exchange for giving up their rights to sue the employer for negligence.

Your state might also allow exemptions from coverage for workers’ comp coverage. Usually, this is only available to the owners or executives of a business. So you definitely need to discuss this with your insurance broker, lawyer, and accountant.

Limit Your Direction or Control of Contractors

This is important in any relationship with your 1099 independent contractors. The directions and control you exert over them must be limited. You hire them for a project, they complete it, give you an invoice and you pay it. Any additional direction or control by you could have them reclassified as W2 employees.

You’re not being smart and getting away with anything. If you get audited, the IRS will notify other government agencies like your state Departments of Revenue and Labor & Industry. You could eventually be responsible for many years of back taxes for both your business and the employee.

that you assumed thought you were getting away with. Try firing a “1099 worker” who then goes to file unemployment because they don’t understand what a 1099 contractor is. The next call you receive might be from a representative of the government just asking a few questions. That’s all it takes to trigger an investigation of you and your business.

Cash and Under the Table Workers

An old friend of mine used to boast about paying all his workers under the table at his construction company. He used all the different methods. Cash payments, 1099 checks, he tried everything. From what he boasted about, this went on for quite some time. He would just laugh at everyone else for paying out taxes. Then he got nailed in an audit because several of his independent contractors filed for unemployment. The department of labor started investigating. They notified the state department of revenue and the IRS. It was a mess. And it cost him dearly.

Don’t be stupid. Follow the rules. And don’t lie. Three simple rules to follow that will help in all aspects of your life. I’m no fan of taxes, but you have to pay them, or eventually, people in suits will show up at your business and take them from you.

Liability-Insurance-Vector-AutoDetailGuide

Your Insurance Will Not Cover 1099 Contractors

We cover this in more detail on our Detail Shop 1099 Contractor page. I’ve also written a few posts on the subject. As far as your business insurance is concerned, 1099 independent contractors are not employees. So your business insurance will not cover 1099 contractors that are working for you. They are supposed to have their own insurance coverage. It’s actually one of the criteria necessary to prove that they are, in fact, actual businesses.

I won’t even mention cash workers because, well, it’s stupid. Your insurance won’t cover an accident if your ‘contractor’ is involved. Even if you lie and say they are an employee. The insurance adjuster is going to have your $10 or $15 an hour employee state, under oath and penalty of jail time for insurance fraud, that they are an employee. The adjuster might even demand payroll records if they are suspicious of their status as an employee.

You will get caught. I’ve seen shop owners that I’m still friends with that were forced to shut down their businesses because they got nailed with penalties and fines for getting caught doing this.

Garage Keepers Liability Insurance with Transporter Plates

Insurance is also tough when transporting cars. In Pennsylvania, they have special plates called “Transporter” plates.  Auctions use these plates to transport cars between auctions and dealers. Detail shops use them for the same thing, except they aren’t really designed for that.

The only way you can get “transporter” plates is to convince a dealership to do a contract with you that says you will be transporting cars for them. The application specifically says that you can’t be driving their cars between your shop and the dealership. So basically they don’t want detailers moving cars and this is their way of making it hard on them. You need garage keepers liability insurance with transporter plates since you will be housing the cars when you transport them to your shop. Even though technically the plates aren’t designed for that use. We cover this in more detail on our Detail Shop Transporter Plate page. Our shop got around this by just getting repair/towing plates since we were doing auto reconditioning services on cars. It worked out and allowed us to stay in compliance with the law. Check out the transporter plate page for more info on this.

Get Proper Insurance Coverage

The detailing business is like any other when it comes to being properly insured. The reason you have auto detailing liability insurance is to make sure you are covered in the event something bad happens. So by cutting corners like many detail shop owners do, eventually you will get burned in some scenario that you might have thought sounded good but in reality just doesn’t work.

Just do the right thing and get the proper insurance coverage with good auto detailing liability insurance and garage keepers liability insurance if needed. The nice thing about the garage keepers insurance is that most policies cover both the physical damage part of your activities and also the other liability issues that you need coverage for in your business.

Liability insurance is one of the most important types of insurance you can obtain for your business. So get it. You will be glad you did.

1099 Independent Contractor vs Employee [Updated 2021]

1099 Independent Contractor vs Employee [Updated 2021]

Shop-Bays-AutoDetailGuide.com
Misclassifying detail shop employees as 1099 Contractors will only hurt your business and employees.

1099 Independent Contractor vs Employee [Updated 2020]

Many new business owners in the auto detailing and reconditioning industry pay their workers under the table. Obviously, this isn’t an issue limited to the car detailing industry. But it is a problem with numbers large enough to attract the attention of state and Federal tax agents.

The unfortunate result of cases like this is the obvious damage to the finances and reputation of their business. Sadly, it also creates an unfair perception with the public about the type of businesses that operate in this manner.

Since I often write about the business of auto detailing and reconditioning, taxes and insurance are two big subjects that I receive many questions about. Which is why I created this overview of 1099 independent contractors vs employees, updated for 2020.

Avoiding Taxes by Paying in Cash

There are many ways small business owners pay employees under the table. The most popular method is obviously cash. The person does the work and the business owner gives them cash.

The initial reaction by most people when they hear about cash transactions is that it’s illegal. It’s not. Cash, aka the almighty Dollar, is the official currency of the United States. You can pay for whatever you want with cash without raising an eyebrow anywhere.

The problem isn’t the cash unless you specifically choose to pay with it for tax avoidance purposes.

Cutting Corners or Raising Prices

This happens more often than you realize. Try requesting bids from contractors for any type of work on your house. You will no doubt have at least one or two that mention discounting the total cost for paying in cash. Why anyone would take that risk is crazy. But it still happens.

If you reach a point in your business career where the only way you can make a profit is by cutting corners in this manner, then you should raise your prices.

Or find a new career.

In the following sections, we will discuss 1099 Independent Contractors and how you can avoid misclassification of W2 employees.

1099 Independent Contractors

Many small business owners attempt to legitimize their payroll tax avoidance schemes by paying employees via check and calling them 1099 Independent Contractors.

Whereby the business owner treats the worker as an employee but pays them via check with no payroll tax deductions.

When the end of the year arrives, the business owner issues a Form 1099-Misc to the employee and the IRS. This form tells the IRS that the worker was paid via all those checks.

Why would the business owner do this to their valued employee? Most of the time it’s driven mainly by greed.

Only The Business Owner Wins

The only person that wins in this scenario is the business owner. They save having to pay the employer side of payroll taxes. And they avoid paying workers comp and unemployment insurance.

The largest win, by far, is the business owner can now deduct 100% of those 1099 contractor check payments as labor costs on their income tax return.

You should never treat your employees like this and let them work without workers comp or unemployment insurance. In my companies, we also provided disability and health insurance coverage.

Businesses should take care of their people.

Until the Tax Man Comes Calling

Unfortunately, now the worker/employee is liable for taxes on that income. So what do you think happens? Of course, they get angry. Maybe they get themselves fired.

Normally that wouldn’t be a big deal. People get fired every day. But this is the tricky part.

If you fire that independent contractor, they will immediately attempt to collect unemployment. You, the business owner, their boss, will be listed as their employer because let’s be honest, they had no idea how the 1099 independent contractor arrangement worked. And most wouldn’t care either way.

And that is the typical story of how many businesses get themselves on the radar of the taxman.

As you can see, paying anybody under the table is illegal and it hurts both your business and your employee. Plus, it opens a pandora’s box of legal issues with many departments within the State and Federal government.

When you pay your workers as 1099 contractors instead of W2 employees, you also make the IRS aware of this fact. They know auto detail shops are one of the many types of businesses that abuse the 1099 independent contractor classification. And all it takes is an audit to catch you. Then they tell their friends in your state revenue department and you have some sleepless nights ahead of you.

So how to you avoid these nightmare problems and properly classify 1099 Contractors vs W2 Employees?

How to Properly Classify 1099 Contractors

Two questions to ask in order to properly classify 1099 contractors are: who defines the end result; and, who controls the process?

From a business owner’s perspective, this means if your goal is to hire an independent contractor to complete a project, your involvement is limited to:

  • Define the details of the project and the timeline to complete it;
  • Negotiate a reasonable price for the work; and,
  • Establish exactly what you want as the outcome or end result.

That is it. Then you step back and let the contractor do their work.

The contractor determines:

  • How to complete the project;
  • Which tools or equipment they need to use;
  • The length of time to complete the work;
  • How much to charge in order to cover their cost and earn a reasonable profit;
  • And finally, when that project is actually completed.

And when the project is completed, you pay the contractor.

As you can see from this definition, you control the results, but the contractor defines the process to get the work done.

The contractor should also own their own equipment, control their own schedule, and maintain their own insurance. That last one, insurance, is very important and I will expand on that in more detail below.

The IRS will reclassify your detail shop, 1099 contractors, to employees by simply asking a few somewhat general questions:

  • Do you tell these workers how to do their jobs?
  • When to do their jobs? Are workers free to come and go as they please as long as they complete the work you assign?
  • Who owns the equipment that workers use to perform their services? Do you provide equipment for them or do they arrive with their own tools, machines, and supplies?
  • Do you have signed and executed contracts with each worker specifying what is expected of them and how they are paid for their work?
  • Does each worker have their own liability insurance and worker compensation coverage? This is important if you are attempting to prove independent contractor classification during an audit.
  • Do you train workers to do things your way? There are many companies that do this with contractors, you just need to be careful how you follow-up after the training.
  • Do you set quotas, deadlines, or issue-specific instructions as to how long a worker is permitted to complete a project that you assign?

Did you answer yes to ANY of these questions? If so, then how many of your 1099 contractors are actually W2 employees? Most likely, all of them.

Learn the Rules or Hire a Professional

The ‘I didn’t Know’ defense is a bad idea. The Government won’t care. And it makes you look unintelligent for attempting to use that argument.

The IRS and State Revenue agents won’t care whether or not you understand the rules and regulations. That’s not their job. It’s actually yours.

As a business owner, you are expected to understand the rules, regulations, and laws that pertain to the type of business you own. If you don’t understand something, you hire a lawyer or accountant to explain it to you.

Or you can look it up on Google, which is most likely where you found this wonderfully informative article. Although as advice goes, it is always better to talk to a lawyer or accountant who knows your particular situation. Especially since I am neither.

My point is, you own a business so be professional and learn the rules or hire a professional to help you better understand issues that can ultimately cost you time and money to fix later.

Tax-Time-AutoDetailGuide
Taxes are one of those important things to do right.

The IRS Always Gets Its Money

You could be liable to pay ALL of the payroll taxes that both the employee and the business were required to pay for ALL the years that you did this.

They can also charge penalties and interest for all the years that you did it.

The really unfortunate part of this is in the majority of these situations the employee isn’t liable for those taxes, it’s on the business owner.

Even worse, if you can’t pay it or decide to shut down and declare bankruptcy, you’re still stuck. IRS taxes can’t be eliminated in bankruptcy. So they will still come after you for everything. The IRS always gets it’s money.

Correct Classification as W2 Employees

Pay your employees properly with the correct classification as W2 employees.

If that is indeed what they should be. You don’t want the stress of looking over your shoulder wondering when you might get caught.

If you can’t afford to pay the taxes that are due, then your costs are too high and the pricing model is wrong. Something is out of wack. So fix it.

You should be able to make money and run your business legally without having to cut corners like this. Otherwise it will end up being a huge problem for you down the road.

Continuing below is the criteria that the Federal Government uses to determine whether or not they are “employees” or “independent contractors”.  This is from the IRS website at: https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee

Independent Contractor (Self-Employed) or Employee?

It is critical that business owners correctly determine whether the individuals providing services are employees or independent contractors.

Generally, you must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid to an employee. You do not generally have to withhold or pay any taxes on payments to independent contractors.

Select the Scenario that Applies to You:

  • I am an independent contractor or in business for myself
    If you are a business owner or contractor who provides services to other businesses, then you are generally considered self-employed. For more information on your tax obligations if you are self-employed (an independent contractor), see our Self-Employed Tax Center.
  • I hire or contract with individuals to provide services to my business
    If you are a business owner hiring or contracting with other individuals to provide services, you must determine whether the individuals providing services are employees or independent contractors. Follow the rest of this page to find out more about this topic and what your responsibilities are.

Determining Whether the Individuals Providing Services are Employees or Independent Contractors

Before you can determine how to treat payments you make for services, you must first know the business relationship that exists between you and the person performing the services. The person performing the services may be –

In 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.

Common Law Rules

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?
  2. Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
  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?

Businesses must weigh all these factors when determining whether a worker is an employee or independent contractor. Some factors may indicate that the worker is an employee, while other factors indicate that the worker is an independent contractor. There is no “magic” or set number of factors that “makes” the worker an employee or an independent contractor, and no one factor stands alone in making this determination. Also, factors which are relevant in one situation may not be relevant in another.

The keys are to look at the entire relationship, consider the degree or extent of the right to direct and control, and finally, to document each of the factors used in coming up with the determination.

Form SS-8

If, after reviewing the three categories of evidence, it is still unclear whether a worker is an employee or an independent contractor, Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding (PDF) can be filed with the IRS. The form may be filed by either the business or the worker. The IRS will review the facts and circumstances and officially determine the worker’s status.

Be aware that it can take at least six months to get a determination, but a business that continually hires the same types of workers to perform particular services may want to consider filing the Form SS-8 (PDF).

Employment Tax Obligations

Once a determination is made (whether by the business or by the IRS), the next step is filing the appropriate forms and paying the associated taxes.

Employment Tax Guidelines

There are specific employment tax guidelines that must be followed for certain industries.

Misclassification of Employees

Consequences of Treating an Employee as an Independent Contractor

If you classify an employee as an independent contractor and you have no reasonable basis for doing so, you may be held liable for employment taxes for that worker (the relief provisions, discussed below, will not apply). See Internal Revenue Code section 3509 for more information.

Relief Provisions

If you have a reasonable basis for not treating a worker as an employee, you may be relieved from having to pay employment taxes for that worker. To get this relief, you must file all required federal information returns on a basis consistent with your treatment of the worker. You (or your predecessor) must not have treated any worker holding a substantially similar position as an employee for any periods beginning after 1977. See Publication 1976, Section 530 Employment Tax Relief Requirements (PDF) for more information.

Misclassified Workers Can File Social Security Tax Form

Workers who believe they have been improperly classified as independent contractors by an employer can use Form 8919, Uncollected Social Security and Medicare Tax on Wages to figure and report the employee’s share of uncollected Social Security and Medicare taxes due on their compensation.

Voluntary Classification Settlement Program

The Voluntary Classification Settlement Program (VCSP) is an optional program that provides taxpayers with an opportunity to reclassify their workers as employees for future tax periods for employment tax purposes with partial relief from federal employment taxes for eligible taxpayers that agree to prospectively treat their workers (or a class or group of workers) as employees. To participate in this voluntary program, the taxpayer must meet certain eligibility requirements, apply to participate in the VCSP by filing Form 8952, Application for Voluntary Classification Settlement Program, and enter into a closing agreement with the IRS.

Proof of Insurance for Any Contractors

Another item that both Federal and State labor departments look for is whether or not the “contractor” has their own liability insurance. If they do that is a good sign that they have their own business and only work for you on a contract basis.

Your insurance company will also require you to provide proof of insurance for any contractors that you hired over the course of the policy term. If you can’t provide such proof then they will rate you and increase your premiums at the time of your annual insurance audit since you have exposed your insurance carrier to insuring “uninsured contractors” who work for you.

As I mentioned above, it’s also a nightmare if the government decides that the “contractor” is actually an “employee” resulting in you having to pay both your portion of the employment taxes and the “employee/contractor’s” portion plus penalties and interest. The Federal Government will also notify the local and state agencies and you will have to go through it all over again with them.

Be a Professional

Most of this is common sense. You are in business. It’s time to be a professional business owner. Otherwise, you will always be treated like a fly-by-night hobby instead of an actual business.

As mentioned previously, I’m not an accountant or an attorney, so you will have to consult with these experts to get details on how any of this applies to you and your business.

We just included this for information purposes so that you can ask your legal and tax people how to best incorporate these matters as it benefits you and your business.

The only advice I can offer from my own experience is to follow the rules and listen to the advice your legal and tax advisors offer you.  It will save you a lot of money in the long run.

Car Engine Cleaning Tips

Car Engine Cleaning Tips

Lavaggio motore

Car engine cleaning tips are important for many reasons. A clean engine runs cooler and helps improve fuel efficiency. It also prolongs the life of your engine. So cleaning the engine properly requires the best practices available.

A Clean Engine will Increase a Vehicle’s Resale Value

Another benefit is when you sell or trade-in a vehicle. A clean engine will increase resale values. This is why car dealers always have their vehicles fully detailed with shiny engines.

Unfortunately, since there are many ways that an engine can be damaged, you need to make sure you follow the procedures.

A Heated Pressure Washer is Preferable

Car engine cleaning is easier when you have the correct chemicals and equipment to do it. A heated pressure washer (aka steam jenny or hot water pressure washer) is preferable but not a necessity to properly clean an engine.

With a heated pressure washer or a steam pressure generator you can use less chemical and degrease the engine faster.

Cold Water Works Too

If you don’t have access to heat, cold water works too. FYI, it is possible to clean an engine without a pressure washer. The trick is to focus on the chemicals and attempt to use the least amount of water as possible.

PRO TIP: A hose from your home will generally push out water flow at approximately 5 to 10 GPM (gallons per minute) at 30 to 50 PSI (pounds per square inch). Most light-duty pressure washers, the kind you buy at any of the big box stores, will pump out 1.5 to 1.7 GPM at 1750 to 1850 PSI. Engines and water don’t work well together. Your goal is to clean the engine with the least amount of water possible. It makes sense to rely on chemical degreasers and a pressure washer with high PSI but low GPM output.

As mentioned above, blasting a bunch of water on your engine for the length of time required to clean it is a bad idea. This is why pressure washers are a detailer’s friend.

Wipe the car engine

When Cleaning an Engine, Less is More

I have already mentioned this a few times, but I’m going to repeat it, yet again. With regards to water and engine cleaning, pressure (PSI) is good as long as gallons (GPM) is low.

Forcing water into an engine is something you don’t want to deal with. Especially since it’s probably a customer vehicle. So use less water and more pressure. And rely on the cleaning chemicals. Let the chemicals and degreaser do the work for you. Anywhere from 1,000 PSI on up to 2,000 PSI is more than sufficient when used with lower GPM and degreasers. Any more than that and you run the risk of injecting water into places you don’t want water in your engine.

Engine Running or Not?

This topic alone could fill several blog posts. For now, let’s just say that the great debate among car detailers for many decades has been whether to keep a car engine running while cleaning it. This is one of those areas that we need to add our standard disclaimer about how we take no responsibility for any damage that you do to an engine. We can only tell you how we’ve done this and you use this information at your own risk.

PRO TIP: If you want to get better at anything, practice. A few years after I started my detail shop, I was always trying to give my new detailers more hands-on experience. Unfortunately, when you put a new detailer on a customer car, you run the risk of something being damaged. So I bought a clunker. See the ‘Shop Dart’ section below to learn more about our lovely practice car.

We Started Out Leaving the Engine Running

At our shops, our process changed over the years. At first, we started out leaving the engine running. I ran the car engine for about 15 minutes to warm it up. Then I would cover up air intakes, electrical boxes, wiring harnesses, and spark plugs.

A generous amount of cleaner/degreaser solution was applied and allowed to soak for 15 to 20 minutes. After the soak, the engine was started. A heated pressure washer on the high heat/steam setting is used to spray the engine clean. We never had an issue with any of the thousands of cars that were cleaning in this way.

Process Changed as Degreasers Got Stronger

Even in industries as slow-moving and stale as auto detailing, car chemical companies still attempt to make better products. This is what happened that caused me to rethink our engine cleaning process. I started noticing that the degreasers we were buying were showing improved results over the course of a few years. Our engine cleaning process changed as degreasers improved. It made sense since we no longer had to apply so much water and steam to engines to clean them. We were still careful to cover delicate electronics and wiring harnesses, but we were able to use a lot less water. 

Your car engine cleaning chemicals make a world of difference. Don’t just buy a cheap degreaser. If you are doing this professionally, then set yourself apart from every Joe Schmo who can buy cheap cleaners for their engines and do it at home.

The Shop Dart

A friend of mine asked if I knew anyone that wanted an extremely old Dodge Dart with a few hundred thousand miles on it. I asked him how much. He said a few hundred bucks. So I gave him $300 and became the proud owner of an incredibly ugly Dart. We eventually named her our ‘Shop Dart’.

Car Engine Cleaning is a Skill

Over the next few years, our team high speed buffed the paint straight down to the metal. We removed dents, did bumper repairs, and scratch removal. And the car was painted and repainted so many times that none of us could remember the original color. All the upholstery was ripped and repaired hundreds of times. Two of my guys even wanted to learn how to rewire a car. So they practiced on the Dart.

Like anything, car engine cleaning is a skill. And skills need to be learned through practice. Our Shop Dart had an engine that was cleaned so often, it shined like it was in a classic car cruise.

If you want to get better, it’s all about practice. If you want to know what happens when you fill fuel injectors with water, then do it on purpose to your junker car. Then learn how to fix it.

Curious about what happened to the infamous Dodge Dart? There’s a cool story about it. My team tore down and rebuilt that car so many times that it looked better than it did when it was brand new. Then one day, my shop manager asked if we could get a few different clunker cars to practice on. I told him we could look around and find some.

Then I had a somewhat brilliant idea. During our morning meeting the next day, I announced that we could put the Shop Dart out in front of our building and sell it. And if the guys wanted to make it perfect, they could all split whatever we sold it for between them. So they repainted it, again, made sure it was running perfect, and detailed it like it was a Lamborghini. It was fantastic.

Then we sold the Shop Dart… for $5 grand. No kidding. $5 thousand dollars. It looked amazing and it ran great. The guy that bought it loved the look. And my team was beyond excited when I handed them the money.

So that’s how we got great at detailing, reconditioning, and cleaning car engines. Hands-on practicing every day on an old clunker car.

We can only tell you how we did it for years and you decide how to proceed from there.

Have fun and enjoy the process. You shouldn’t have any problems as long as you follow the tips outlined above and use common sense along with a good safety regimen.

We hope you enjoyed this how-to on Car Engine Cleaning Tips. Access more tips, training, and insight by subscribing to the AutoDetailGuide.com E-Newsletter.

Suggested Pages to Check Out

Detail Shop Liability Insurance Page with Info on Garage Keepers Liability Coverage

1099 Contractors and Other Detail Shop Tax Issues