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timmystoner84
New Member

If I work for a lone contractor, and I use his tools and he directs the work am I considered self employed? Everyone I meet in the industry says yes. Are they right?

Also, is it illegal to work as self employed when I should be considered an employee. Whose wrist will the government slap mine or my boss?
1 Best answer

Accepted Solutions
Hal_Al
Level 15

If I work for a lone contractor, and I use his tools and he directs the work am I considered self employed? Everyone I meet in the industry says yes. Are they right?

An official answer depends on more details. See IRS Tax Topic 752 on employee vs. self-employed at http://www.irs.gov/taxtopics/tc762.html

From a tax standpoint, it's mostly a matter of FICA (social security and medicare) tax. As an employee, you pay 7.65% of your salary as FICA and your employer pays the other half (7.65%). As a self employed person, you pay the whole 15.3%.

There is nothing illegal about your arrangement. It's done frequently. If you knowingly went into the agreement, you should just file as self employed person (schedule C) and pay the self employment tax (SET). The self employed pay their FICA as SET.

There is a  way to contest the “employer’s” classification of you as a contract employee. That is to pay your share of the Social security tax on form 8919 .In TurboTax, type> form 8919 with 1099-misc income <in the search box.  After you enter your 1099-Misc, select that you got the 1099-Misc for another reason. Then select "My employer reported this extra money on a 1099-MISC but it should have been reported on a W-2" from the drop down list.

You also have to submit form SS-8 and the IRS will determine whether you or the employer pays the employer portion of the SS tax. You will probably also upset your employer, because the IRS may contact him about whether or not he properly paid wages.

Form SS-8 is not in TT but is here ===>>> http://www.irs.gov/pub/irs-pdf/fss8.pdf

View solution in original post

3 Replies
Lisa995
Level 12

If I work for a lone contractor, and I use his tools and he directs the work am I considered self employed? Everyone I meet in the industry says yes. Are they right?

The person you work for would be in hot water with IRS....but you personally could be in a bad position should you be injured on a job and don't carry your own insurance.  Lots of things to consider.
<a rel="nofollow" target="_blank" href="https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-o...>
♪♫•*¨*•.¸¸♥Lisa♥ ¸¸.•*¨*•♫♪
SweetieJean
Level 15

If I work for a lone contractor, and I use his tools and he directs the work am I considered self employed? Everyone I meet in the industry says yes. Are they right?

Right, and you wouldn't qualify for unemployment comp if you lose that job.
Hal_Al
Level 15

If I work for a lone contractor, and I use his tools and he directs the work am I considered self employed? Everyone I meet in the industry says yes. Are they right?

An official answer depends on more details. See IRS Tax Topic 752 on employee vs. self-employed at http://www.irs.gov/taxtopics/tc762.html

From a tax standpoint, it's mostly a matter of FICA (social security and medicare) tax. As an employee, you pay 7.65% of your salary as FICA and your employer pays the other half (7.65%). As a self employed person, you pay the whole 15.3%.

There is nothing illegal about your arrangement. It's done frequently. If you knowingly went into the agreement, you should just file as self employed person (schedule C) and pay the self employment tax (SET). The self employed pay their FICA as SET.

There is a  way to contest the “employer’s” classification of you as a contract employee. That is to pay your share of the Social security tax on form 8919 .In TurboTax, type> form 8919 with 1099-misc income <in the search box.  After you enter your 1099-Misc, select that you got the 1099-Misc for another reason. Then select "My employer reported this extra money on a 1099-MISC but it should have been reported on a W-2" from the drop down list.

You also have to submit form SS-8 and the IRS will determine whether you or the employer pays the employer portion of the SS tax. You will probably also upset your employer, because the IRS may contact him about whether or not he properly paid wages.

Form SS-8 is not in TT but is here ===>>> http://www.irs.gov/pub/irs-pdf/fss8.pdf

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