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Should my boss be reporting me as an independent contractor? i don't think i am one.? |
she has a small business- 3 employees- and reported my income in the self-employment line on the 1099 she sent me. my taxes were astronomical as a result. but i don't think i'm actually an independent contractor. i work sewing clothing for her from 9-5 mon-fri. she pays me by the hour and tells me what needs to be done every day. it looks like the irs says this is a regular employee. on the side, i do my own art that i show in a gallery. so that counts as self-employment. but for the sewing job, is she commiting fraud at my expense by reporting me falsely as an independent contractor? what should i do about it? From your description, you are an employee.! You can ask IRS to make a determination. Here's what you do: Go to IRS.gov, then forms & publications & download form SS-8 and instructions. This is a request for IRS to determine your status as employee. Detail the facts and circumstances. This link will give you a heads up on the rules IRS will apply to the facts you state in form SS-8 (and the employer's reply) to make the determination: http://www.irs.gov/govt/fslg/article/0,,... You are responsible for only the correct amount of income tax and Half of the Self-employment tax. which is the Soc. Sec & Medicare that would have been deducted if you had been treated as an employee. To determine the amount take 7.65% of your gross wage. The amount is then entered on line 9, Col. C of form 1040X. Now, if have already filed your tax return, wait until their determination is final and amend your 2006 return using Form 1040X. Your state return will most likely also need amended because it keys off of Fed. Adjusted Gross Incme which will change. If it is for an earlier year and the statute of limitations for refunds is an issue, prepare and file an amended return as if you were an employee. Write "Protective Claim" across the top of the first page. You may find this over your head. If so, find a competent tax professional. Good Luck! Hank Roitman, EA Sacramento, CA Hire a CPA to review it and then if they tell you she is claiming the wrong things on you, go to her and tell her that your CPA said you need to be claimed differently because the tax burden is against you. check this website out: http://www.irs.gov/businesses/small/arti... i was hired as an IC at my job when i was a temp...but your case seems a little different... You'd have to speak with a CPA or lawyer on the legality of this issue. If this is steady employment, you really should have withholding taken out of your pay. Otherwise, you're getting hit by this huge burden at tax time. This could open you upto penalities. The IRS doesn't mind holding onto extra money to pay you in April, but they don't enjoy receiving their pay late. CARLY, IF YOU GET A 1099 RATHER THAN THE TYPICAL W-2, THEN YOU ARE PAID AS AN INDEPENDENT CONTRACTOR AND HAVE TO PAY YOUR OWN TAXES AND SELF-EMPLOYMENT DUES. SHE IS NOT REPORTING YOU FALSELY. CHECK WITH YOUR ORIGINAL HIRING CONTRACT. If she is deducting taxes every week from your paycheck then you are not an independant contractor.If no taxes are taken out then yes you are. AFTER YOU LAST MINUTE ADJUSTMENT TO YOU QUESTION I HAD TO RE RIGHT MY ANSWER,AND HERE IT IS/ YES YOU ARE,SO IF YOU DON'T WANT TO BE BECAUSE OF TAX'S OR ANYTHING AL'S JUST TELL HER THAT,AND START BEEN A REGULAR EMPLOYEE.IF THAT'S WHAT YOU WONT??!!!! |
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