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Statutory employees are a very special designation and have their own special rules. If you are a statutory employee, you can claim certain business-related expenses on Schedule C instead of Schedule A. This means you get a bigger tax deduction than traditional employees.
Statutory employees are somewhere in between independent contractors and regular employees. Most people are regular employees - they work for an employer and the employer says what job will be done and how to do it.The information from the W-2 has to link with your Schedule C
Statutory employees are a very special designation and have their own special rules. If you are a statutory employee, you can claim certain business-related expenses on Schedule C instead of Schedule A. This means you get a bigger tax deduction than traditional employees.
Statutory employees are somewhere in between independent contractors and regular employees. Most people are regular employees - they work for an employer and the employer says what job will be done and how to do it.The information from the W-2 has to link with your Schedule C
I work as a Real Estate Appraiser, in 2015 we changed from 1099 to W2 employees. I work solely out of my house, with the office of the company I work for being apx 80 miles away. I only visit the office maybe twice a year for brief meetings. The company I work for obtains the appraisal orders from several banks, and then assign them to me. I receive 50% of the total fee collected. I'm an employee is the sense that they pay for my health insurance, MLS fees, and errors and omission insurance. While I pay all my daily expenses such as gas, internet, phone bill, car related expanses, copy paper, and State fees to renew my appraisal license. Before the tax reform laws went into effect I could itemize my expenses on a Schedule C, since the law change I have not. I asked them to classify me as an statutory employee but so far they have refused. I drive an average of 40,000 business miles a year. Even though they haven't checked the statutory employee box on my W2, can I still file as one? How can I have this changed with the IRS? Thank you
If you would be considered an independent contractor under common law rules, but you are an employee under Federal Rules then you may be a Statutory Employee.
Here is the definition of a Statutory Employee from the IRS
Yes I've read the IRS's guidance on it, but it is still kinda vague. Talks about traveling salesperson, etc. In my eyes its pretty clear that I am more of an independent contractor than a standard employee. More than 1/3 of my income over last 2 years has gone to taxes and business expenses. So while I show I make $150,000 a year, I pay around $35,000+ in income taxes, and at least $25,000 in business expenses which includes miles driven. At this point not sure what I can do.
My understanding of statutory employees is that only the four occupations outlined in the IRS publication qualify.
My understanding is also that the burden is on the employer to ‘grant’ that designation to the statutory employee.
I have seen very few statutory employees in many years of tax preparation.
TurboTax defaulted my statutory income to my existing Schedule C which is for the correct business, but also has other income in it. When I get to the Federal Review in TurboTax, it flags this as a problem having statutory income and other income in the same Schedule C. If this is the case, how do I get the statutory income to show up in its own Schedule C?
First, get rid of your existing Schedule C information. In TurboTax Online:
Now, double-check your Form W-2 information.
Enter your Statutory Employee expenses
Finally, enter your other self-employment income and expenses in a different Schedule C:
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