I am considered an independent contractor at my full time job even though I would consider myself an employee there. They make my schedule and they pay me for benefits. I'm hired on indefinitely and they can fire me any time. I pay self-employment taxes based on the 1099 that I get at the end of the year. I was wondering if I'm getting screwed and if by keeping me as an independent contractor they are avoiding paying a portion of my taxes. Does anyone know about this?
is the company comitting tax evasion? yes. is it screwing you over? not necissarilly if you are receiving benefits. here is the most informative site I have found so far
Here is the IRS site on independent contractors/employees. Your employer is passing on part of its tax liability (social security and medicare) to you as well as saving on paying unemployment compensation and worker's compensation insurance. Of course, you may be getting paid extra to make up for the difference. I do not know how aggressive the IRS is on the issue, but I know it is an issue with them.
Yeah you are basically getting screwed for 7.65% (employers share of Social Security and Medicare) of your salary. Are you writing off a bunch of expenses against your 1099 earning? If so this could be making up for it.
If you are an independent contractor, your employer should not be setting your hours. However, they can still hire or fire you at their discretion (unless you have a contract that states otherwise). So yes, you are getting screwed, especially having to pay the employer tax.
Thanks for the info. Up until now I haven't really cared and I've been happy with the arrangement as I am payed very well for what I do and don't want to complain. But, I'm starting to get a hint that they don't want me to do some of the side work that I've always done. (I'm a musician and they don't want me playing other places) Anyway, if it comes to the point that they don't want me to do these other gigs, then that got me to thinking about what rights I have as a contract worker versus an employee.
