Anyone familiar with independent contractor vs employee classification and IRS Form SS-8? (corporations, W2)

[edesign]

I am having an issue where I need to decide if I should file Form SS-8 which determines worker's classification as an employee or independent contractor and thus what taxes they are liable for. The IRS has a guideline checklist with 20 main points and I meet nearly 100% of them if not all 100% but this is simply a guideline, not a guarantee and I understand the IRS can be quite arbitrary in applying them.

There is one caveat to those main points and part of it is if the classification is standard industry practice but I have no way of knowing that. I don't think HR departments would be too receptive to surprise phone calls asking how they classify certain employees. I am not even sure a tax professional would really know the answer to this unless I got lucky and stumbled across one who has been through the whole thing before with my specific industry...possible I suppose.

I also realize there may be backlash from my industry if/when the previous employer starts dropping my name but at this point I really could not give less of a dung pile. Over 12 months of job hunting and basically nada for the most part so I'm seriously considering going back to school and retraining and also trying to get something going on my own. The job market sucks, has sucked for a while, and won't be getting any better for years to come...I'm quite sure of that and I have been saying it for two years, not just because of my current situation.



So after all that rambling my question is...is it common for probationary period employees to be classified as independent contractors in many industries here? Especially those who require oversight and must have their work reviewed before sending to customers (i.e., not knowledgeable enough to work on their own), have no personal tools/equipment of their own, and must show up to the "employer's" office and work regular hours there? Thanks!

[Naptowner]

Originally Posted by edesign

So after all that rambling my question is...is it common for probationary period employees to be classified as independent contractors in many industries here? Especially those who require oversight and must have their work reviewed before sending to customers (i.e., not knowledgeable enough to work on their own), have no personal tools/equipment of their own, and must show up to the "employer's" office and work regular hours there? Thanks!

The things I bolded describe an "employee" under the law.

[edesign]

Originally Posted by Naptowner

The things I bolded describe an "employee" under the law.

Exactly...and I have copies of reports I sent out with my name on it and the employer's name below it as if I were an employee. It's that "standard industry practice" part that I'm unsure about.

[MSchemist80]

I am in the same situation. I work as a Chemist for a major International Food and Beverage Company and have been here for nearly 2 years. I've been searching the whole time for a FTE job but everything now is via temp agencies in this lousy profession. Anyways this noname agency out of MI has kept me as a 1099 independent contractor (maybe without the companies knowledge?). I just mailed in an SS-8 today as I don't really care about my job anymore I hate science and want to retrain for accounting. I figure I'll be gone by the time they make a ruling.

[Philip T]

edesign -- (electrical / electronic designer or engineer?)

Key sentence that caught my eye . . .

Originally Posted by edesign

probationary period employees to be classified as independent contractors

Employee being classified as IC is ALWAYS a No Go. Sounds like you are working for some grifters or idiots. But that does not necessarily make 1099 status a bad thing for You.

jmho -- I have done this for over 20 years and will take 1099 over W2 ten days a week, if I can. Once you fully understand the game, you may like it better, as well.

Engineering and technical folks often have have a hard time getting the 1099 classification -- even when it is the case -- due to various IRS rules that have nothing to do with taxes, but rather those rules have been bought and paid for by various "broker" corporations to limit the opportunity for the relatively high dollar technical folks to work on their own.

I would suggest you DO NOT file the SS-8 as it not required, and will likely draw some Very Negative Attention your direction. Rather study how to comply with both the letter and intent of those SS-8 questions, and make some real money with your 1099 situation compared to the W2 status that you make think is better.

Details if you need.

[Wilson513]

Originally Posted by edesign

So after all that rambling my question is...is it common for probationary period employees to be classified as independent contractors in many industries here? Especially those who require oversight and must have their work reviewed before sending to customers (i.e., not knowledgeable enough to work on their own), have no personal tools/equipment of their own, and must show up to the "employer's" office and work regular hours there? Thanks!

Not only is your "question" a rambling mess, it contains more "answers" than information about your situation. You really say nothing about who you are, what you do and how it fits into this question. Are you looking for a job and wonder if you will be an employee or an IC? Do you have a job and not agree with your employer's classification? What exactly are you asking and on what factual predicate?

BTW, disregard all of the above advice. It is mostly wrong and even so you haven't provided enough facts for anyone to answer you correctly. Even me, a person who has structured every aspect of the employee/IC relationship(s) down to actually trying employee/IC cases in the US Tax Court.

So, try again if you really want to know an answer.

PS: try searching this forum. I think I have addressed this more than once already.

[snofarmer]

Try the IRS for the lowdown.

Independent Contractor (Self-Employed) or Employee?