my boss, the sole owner of this company, has told me i am an independant contractor, so she has to pay less taxes. her CPA has apparently told her this is the best route for her. i asked her what this meant for me, in general, and she said nothing would change, except that i would have to file my taxes differently.
this was a few months ago. before that, she had been withholding from my paychecks. now she no longer withholds.
my wife and i applied for a new home loan, and we were accepted immediately, until i told them about my tax situation. the mortgage officer told us that i am "self - employed" and therefore cannot qualify for the loan. we have basically lost the home we were about to buy because of my new status of being an independant contractor. this made me livid, but it is *MY* fault for not looking into these things before hand.
However, after finding this info out, i looked more in depth at what makes a subcontractor, and what benefits she is gaining by making me one. i wanted to see her actual fiscal savings by labeling me as such, to see if we could come up with something to get me back into a W-2.
After much searching, it appears that what she has done is illegal.
I am a full time employee.
I work in the office set hours every week.
I do not do any work for any other company of any sort.
From what I can tell, i am an "employee", not an "independant contractor".
What legal issues am i getting myself into over this? Am i damning myself by knowingly letting her claim me as such when i know differently? How much more money is the business responsible for if i was an "employee"?
Thanks so much.