Am I a statutory employee (life insurance agent)?

[cmoney]

My job in 2017 fits the following definition under 26 U.S. Code § 3121:

"A full-time life insurance sales agent whose principal business activity is selling life insurance or annuity contracts, or both, primarily for one life insurance company."

My job also satisfies the following criteria:

"The service contract states or implies that substantially all the services are to be performed personally by the worker;

The worker does not have a substantial investment in the equipment and property used to perform the services (other than an investment in transportation facilities); and

The services are performed on a continuing basis for the same payer."

However, the W-2 I received does not have the statutory employee boxed checked off. Can I file as a statutory employee?

[DanielV01]

Maybe.  However, remember that the IRS receives a copy of the W-2 that does not have the statutory employee box checked.  Life insurance salespeople typically are the epitome of those who are considered to be statutory employees; however, contact your company first to see why they did not check the statutory employee box.  If it turns out that you qualify, request a corrected Form W-2 in order to get the statutory definition corrected.  However, if you don't qualify, they will be able to tell you why they didn't check the box.

You still will be able to claim unreimbursed expenses.  However, the difference in doing so is that the statutory employee gets a direct deduction of his expenses on Schedule C, whereas the standard employee (or traditional employee) must claim these expenses on Form 2106, which is subject to 2% of AGI and Itemized Deduction limitations.  (Suffice to say that you don't get as many benefits from the deductions if you use Form 2106).

You could well qualify as a statutory employee, but you want to be sure before you file your return as such.