Independent Contractor vs Employee

[SarahC07 0]

Forgive me, I'm young and still figuring this shit out...

According to the IRS, my employment relationship is supposed to be "common law employee/employee"; however, for tax purposes I'm being treated as an independent contractor. I'm not having any taxes withheld from my pay, but so far as my responsibilities go I am definitely being treated as an employee.

How does one handle this situation? I think my boss is educated enough to know what he's doing and knows what he's doing is 'wrong'.

I did my research here:
http://www.irs.gov/publications/p15a/ar02.html#d0e602

If you were me, how would you handle this situation? Confront my boss?

[tweak 0]

Quote

...I am definitely being treated as an employee

What do you mean by this?

I've worked as a contractor for quite a while without any problems. If I had an issue, I'd have a talk with the person that I report to.

[SarahC07 0]

The IRS has a supplemental section published to help people determine if they are an independent Contractor vs Employee:
http://www.irs.gov/publications/p15a/ar02.html#d0e602

The 3 factors they outline:
1. Behavorial Control
An employee is generally subject to the business' instructions about when, where, and how to work; if you are doing a job that required specific training, you're probably an employee and not an independent contractor.

2. Financial control
"An independent contractor is generally free to seek out business opportunities. Independent contractors often advertise, maintain a visible business location, and are available to work in the relevant market."

3. Type of relationship

... I'm not up for typing this section, but it you're really interested... take a look at the link...

[tweak 0]

Hmmm... Still not clear on what your client is doing that has you inclined to ask the question regarding contractor vs employee.

I've been in and seen many instances where the contractor has needed specific training to perform the task that they were expected. The client usually covers that cost.

As far as seeking out business opportunities in a given market, it's not that uncommon for a client to require the contractor to sign a non-complete agreement (which I won't do).

For the most part though, I've always been treated pretty much like an employee with the exception of benefits and method of payment (which is not a complaint).

[JeepDiver 0]

Your post is rather vague.

Without know what you are doing it is hard to understand the difference in the employee/independent contractor relationship you are seeking an answer for.

[SarahC07 0]

My concern is more so that in my working relationship I should be treated as an employee, but I am actually be treated as an independent contractor.

Technically, my boss could get in some big trouble if the IRS found out. If the IRS never finds out (and they probably won't unless someone squeals) nothing will happen.

Really, it doesn't matter. If I can deduct expenses because I'm a contract worker, then that's better for me. I'm just frustrated with my boss.

[ladyskydiver 0]

There's a lot missing from your post so it's hard to know exactly how to answer that question.

Who did you get hired by? The company you're working for or someone else? If it was the company that you're working for, was it agreed upon when you were hired that you'd be a 1099 employee?

When I worked as a consultant (both through a firm and independently), the only way anyone was able to tell if I was an employee or not was if I (or my boss) told them. My responsibilities were the same as if I was an employee.

Life is short! Break the rules! Forgive quickly! Kiss slowly! Love truly, Laugh uncontrollably. And never regret anything that made you smile.

[Andy9o8 2]

You're focusing on the technical at the expense of the practical. There are lots of employers that deem employees as 1099 independent contractors when, technically, they really ought to treat them as W-2 employees. There's nothing new or unique about that being done.

But, on a practical level, do you want to keep this job or not? In the real world (i.e., not the theoretical world), there probably is no third option that allows you to otherwise maintain the status quo. Sure, you could try blowing your boss in, or confronting him. But do you really think your relationship will remain unchanged once you do that? Not likely.

I think you probably just have to suck it up and make your choice: keep this job or find another one. Welcome to the real world.

[diablopilot 2]

Thank god someone said it.

----------------------------------------------
You're not as good as you think you are. Seriously.

[popsjumper 2]

Good...Andy pointed it out:

1099 = contract (no income tax, no FICA, etc. withheld)
W-2 = employee.

I like the contract work. I can take huge deductions for work-related expenses. I can do whatever I want with my money. I can accept or reject jobs (not to be confused with work-duties) at will. If I accept a job, then I must perform the work-duties to the best of my ability.

On the downside, employer contributions to a savings plan do make a huge difference in the end and insurance is less costly.

As far as work-duties are concerned, I don't see what the problem is...contractors and employees do the same jobs the same way, eh? I don't understand how an employer can screw a "contract" worker, or any other for that matter, in the long run ...YOU choose to stay or go. Simple as that.

If I had to say anything else, it would be:
If you're not happy with your position in life, change it.

My reality and yours are quite different.
I think we're all Bozos on this bus.
Falcon5232, SCS8170, SCSA353, POPS9398, DS239