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  1. #1

    Default Employee or Independent Contractor

    I was hired by a husband to provide care for his wife in their home. I have worked for them for the past 3 years and have always considered him my employer as anything that needs to be done needs to go through him first. I asked him several times if he could withhold taxes out of my checks and he said he didn't want to do that as he would have to match whatever he took from me. I work set hours and set days. I do NOT work for anyone else. There are also 2 other ladies who provide care for his wife in the evenings and on my days off. I am wondering, am I considered self-employed or is he my employer? I have received several contradicting solutions to this horrific problem the 3 of us have run in to. He said his CPA told him to give us each a 1099 form, but in this are included hotel expenses, grocery expenses for his household, money for his wife. He had us pay for things and said he would reimburse us, yet now we are going to have to pay taxes on THEIR household expenses. Any help with this would be wonderful....I know what I think, but a solid, ground answer would be great. We live in North Dakota.

  2. #2
    Join Date
    Mar 2008
    Posts
    1,995

    Default Re: Employee or Independant Contractor

    You are "self employed", and technically should get a 1099, but often people who employs you probably has no idea what it is. Do a little bookkeeping yourself, keep track of what he paid you. As "self employed", make the quarterly estimated tax payments, on federal ,state, local and employment taxes (social security & medicare), including the employer portion (called self employment tax) which you'll have to do if taxes are not wiithheld. Obviously he does not want to be bothered with this, and most people in his position doesn't.

    My dad uses a "caregiver", and because of his age, he does not remember one day to the next what's going on, so I don't expect him to suddenly be a bookkeeper and withhold taxes, send them in on schedule. Though I am retired, I do books for a "non profit", it is a process that requires discipline, good record keeping, and maintaining schedules. I do the withholdings, file the quarterly federal (941's) and state (NYS-45 in NY) reports, and make the payments. Often, my dad would ask me what day of the week it is, and what month is it?? I don't want to be his bookkeeper, and least of all, I don't expect him to be one.

    If you rather have someone withhold taxes, work for an agency. My dad hires people through an "agency". As I recall, about two years ago when I last checked, they bill my dad $11.00/hour, and they pay this lady $7.50/hour, the difference being the administrative fees, plus the employer part of the employment taxes.

    The agency provides this "caregiver" services for 5 days a week. This lady wants to make some extra money, so he hires her the other two, but pays her directly. She is responsible for reporting and paying taxes on this extra money, and my dad does not want to be bothered with withholdings or 1099's for this. If this lady is going to start asking him to withhold taxes and file the returns, then he'll have to hire someone through the agency for these other two days as well. Someone not knowing what month it is shouldn't be doing tax withholdings.

  3. #3
    Join Date
    Jul 2007
    Location
    Florida
    Posts
    2,344

    Default Re: Employee or Independant Contractor

    The circumstances under which you work determine whether you are an employee or an independent contractor, not the whims of the person paying you. If you want to, file a form SS-8 with the IRS and ask them to make a formal determination. If they determine, from the circumstances of your work, that you are an employee then you will pay only the 7.65% of income for social security and medicare, not the 15.3% self employment tax.

  4. #4
    Join Date
    Oct 2006
    Posts
    15,935

    Default Re: Employee or Independent Contractor

    Quote Quoting bburnett2240
    View Post
    I was hired by a husband to provide care for his wife in their home. I have worked for them for the past 3 years and have always considered him my employer as anything that needs to be done needs to go through him first. I asked him several times if he could withhold taxes out of my checks and he said he didn't want to do that as he would have to match whatever he took from me. I work set hours and set days. I do NOT work for anyone else. There are also 2 other ladies who provide care for his wife in the evenings and on my days off. I am wondering, am I considered self-employed or is he my employer? I have received several contradicting solutions to this horrific problem the 3 of us have run in to. He said his CPA told him to give us each a 1099 form, but in this are included hotel expenses, grocery expenses for his household, money for his wife. He had us pay for things and said he would reimburse us, yet now we are going to have to pay taxes on THEIR household expenses. Any help with this would be wonderful....I know what I think, but a solid, ground answer would be great. We live in North Dakota.
    I do not like either of the answers that you received...because of the additional money that he gave you for his wife and household expenses, that he apparently intends to include on the 1099.

    My first step would be to tell him that its completely improper for him to include anything other than your pay on the 1099, and that if he does so, you will report him to the IRS for trying to write off his household expenses by including them on the 1099.

    If that doesn't work, then you are going to need the assistance of a tax professional.

    Ideally, if only your pay was being included on the 1099, then you would follow the advise of filing a form SS-8 with the IRS, and using form 8919 to report your income on your tax return.

    However that additional money, if included, is going to be a serious problem.

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