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  1. #1

    Default Working As a Contractor, but the Work is Scheduled by My 'Employer'

    My question involves independent contractors in the state of: Texas

    I may have a job coming up. good! been without work too long. Here is the deal. I don't know what, tax wise, the employer has to pay or withhold, and what I have to pay, exactly, according to the law, depending on the job classification. I know some businesses hire 'independent contractors', but they determine the hours, place, and time of the work like for employees. I believe that is not the same as an independent contractor. So here is the info and question:

    I am to use and maintain my vehicle.
    I get reimbursed for gas consumed, plus some percent of "IRS mileage".
    I get reimbursed for meals, hotels, any reasonable expense like buying a battery or piece of cable for use in the work.
    I have to buy my own health insurance.
    I have to pay my own income tax.
    I don't know about the social security taxes, but suspect I have to pay it too.
    I will be supplied with a mobile connectivity device to send and receive calls, messages, and files through the internet.

    How I am paid:
    I am paid a fixed amount for each completion of a procedure.

    How I am controlled:
    A member of the company acts as a 'dispatcher' to line up jobs nationwide and send me to them, making up a route for most efficiency.
    I have to be in certain places on certain days and approximate times. I presume it will be to travel, get hotel and sleep, then help a client in the morning, then move on.
    I probably get paid once a month or two weeks.

    Not sure yet who has to boot the bill for vehicular liability insurance, I am aware it can be high for business and I will be racking up a lot of miles in my own plain jane vehicle.

    I am under the idea that I have to pay the whole social security tax if I am self-employed as an independent contractor.
    For my part, that SS tax is a lot and I'd rather let the owner share in it or pay it, and make my deductions for the IRS, an get a W4.

    When I had a business, I wanted to call the workers contractors and save myself the tax hassle, but could legally do it because I controlled them, that is, I required them to show up at a specific place and time of day to work.

    Here at the possible new job the 'dispatcher' employee will be acting as a remote boss, and will be controlling my time and location schedule, as in "go to KC, xyz co. do procedure A. Two days later, be in OKC, customer nnn, do procedure B", ...and so on. The business depends on that.

    Am I to be an employee or an independent contractor, as defined by the law? The owner says contractor, but there seems a lot of control for that.

    I need to know about this situation before my meeting Friday or Saturday, when a contract will be presented. (not pressuring anyone. I just yesterday found this forum). If there is anything in the contract I don't absolutely understand or like, I will pay an attorney to help me understand it. I also am afraid that the law can be violated if I am treated as a contractor when the law defines me as an employee.

    Thank you!

  2. #2
    Join Date
    Mar 2013
    Posts
    17,780

    Default Re: Working As a Contractor, but the Work is Scheduled by My 'Employer'

    In spite of all those variables you might still be an independent contractor.

    "The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done."

    That's quoted from the IRS website.

    http://www.irs.gov/Businesses/Small-...ractor-Defined

    More from the IRS:

    http://www.irs.gov/Businesses/Small-...ed-or-Employee

    If you qualify as an independent contractor you are in business for your self and the "fees" paid to you by your "client" need to be enough to cover all your expenses, insurance, and taxes and still leave you enough for a profit and you would report your income and expenses on Schedule C and self employment tax on Schedule SE.

    And, yes, you do pay for your own vehicle liability insurance. Business use of a car gets a surcharge on your auto policy but business use of a truck makes it a commercial vehicle with many insurance companies (even though it might not be registered that way) and will require a separate commercial auto policy.

  3. #3
    Join Date
    Jan 2015
    Location
    Bedford, Texas
    Posts
    109

    Default Re: Working As a Contractor, but the Work is Scheduled by My 'Employer'

    From what you have written it is probable that you are an independent contractor.

    Think about it like this: if you were hired to do plumbing work for a home builder, as a contractor, would you find it too controlling that the person who hired you expects you to do work at a particular site at a particular time? It is generally not overstepping a contractual relationship to instruct the contractor where and when work should be done. The employee vs. independent contractor tests are tests of a multitude of factors. Even where some factors might lean in favor of an employee, other factors may lean the other direction and on balance support your status as a contractor.

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