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I am a college student, who had a job last year where I was hired as a temp worker. After that period of 3-4 months, they decided to hire me as a regular employee, which I worked as for the duration of the year. They gave me a 1099-MISC for that first period of time. I'm trying to figure out if I could possibly classify my work there as an actual job, or not.
I basically went to their office, got trained by them, used their equipment, and did my job (was mostly data entry, back-end stuff). This was my main/only source of income. If I needed time off, I would give them two weeks notice - I don't know if it was required to do, but I did it anyway just to be a good employee, and give them plenty of notice. I was not given benefits, but then again, I don't know if I was given benefits when I was working as a "regular" employee, because I eventually started school, and had to work part-time.
I got paid at the beginning of the following week. I would write them up a contract on excel, with the hours worked, as well as my total. I paid no taxes (Obviously, neither did they). I don't really have much to deduct, since I just went in and worked as any employee would work. I also will be paying much more in taxes, as an independent contractor, as we all know.
I don't believe I have any of the paperwork for when I was initially hired as a temp employee (I also no longer work there). I was just happy to have a job. Curious what you guys think...Thanks in advance.
If you were an employee they would have withheld income and social security taxes from each check. They would have also paid for various employee benefits.
You would have to file a complaint with the Dept of Labor/IRS to investigate to determine if you were an employee or a contractor
It will come down to what they send you for a tax form. You got a 1099 for the first part, if they send a w-2 for the second part, you were considered a regular employee--and if they didn't take taxes out, that is a big issues for both of you. If they send you a 1099, you are considered a contract employee--however, legally, that might not have been right. If you were a contract employee all year, you can deduct things like mileage, cell phone use on the job, etc.
I had one of those 6 1/2 years ago. I did some consulting for a company that hired me full time. I hadn't billed them for my time yet. I asked them to back out their half of payroll taxes from my hourly rate and pay it to me as W-2 money as a signing bonus instead of 1099 money. It saved me some paperwork and a quarterly tax filing. They got to "try before you buy". Win-win.
There are endless horror stories of people getting paid 1099 and not banking the money needed to do the quarterly filing. They're the ones with the IRS garnishing their paycheck. This is why the IRS comes down so hard on employers paying de-facto employees with a 1099. It's very expensive to chase them for unpaid self-employment tax and federal income tax. With a near-minimum wage person, the government probably loses money chasing it down.
I am a college student, who had a job last year where I was hired as a temp worker. After that period of 3-4 months, they decided to hire me as a regular employee, which I worked as for the duration of the year. They gave me a 1099-MISC for that first period of time. I'm trying to figure out if I could possibly classify my work there as an actual job, or not.
I basically went to their office, got trained by them, used their equipment, and did my job (was mostly data entry, back-end stuff). This was my main/only source of income. If I needed time off, I would give them two weeks notice - I don't know if it was required to do, but I did it anyway just to be a good employee, and give them plenty of notice. I was not given benefits, but then again, I don't know if I was given benefits when I was working as a "regular" employee, because I eventually started school, and had to work part-time.
I got paid at the beginning of the following week. I would write them up a contract on excel, with the hours worked, as well as my total. I paid no taxes (Obviously, neither did they). I don't really have much to deduct, since I just went in and worked as any employee would work. I also will be paying much more in taxes, as an independent contractor, as we all know.
I don't believe I have any of the paperwork for when I was initially hired as a temp employee (I also no longer work there). I was just happy to have a job. Curious what you guys think...Thanks in advance.
Answering your question whether or not to classify as an actual job.
You have to separate them between a contractor and an employee. You will be receiving a 1099 and W2. As a contractor taxes are not withheld from your pay, where taxes are withheld from your pay as an employee.
Myself prefer to be employed as a contractor, the income is generally higher and you can take advantage of major tax deductions. Recommend sitting yourself up as a corporation (LLC) and have daughter companies to build your empire.
I'm curious as to why you already received a 1099-misc for the time when you were a temp employee, but you haven't received a 1099 or W-2 for the next time period, if this was all during 2015.
Since you gave them weekly contracts and they paid you what you requested without deducting taxes, I am pretty sure you will get another 1099-misc.
If you wanted to be an employee, you should have brought it up at that time, not now. When you receive the final 1099, file your taxes and use a Schedule C, maybe you have some deductions that will reduce the taxes you owe.
Thanks everyone for the replys. I apologize for not being clear, but they also sent me a separate W2 for the next period where I was a regular employee (at this point, I was just clocking in and out, not writing up invoices, etc.). Regular taxes were being taken out/paid for the W2 portion.
My main issue is that I can't reasonably take any major deductions, since during the "independent contractor" phase, I was working at their offices, using their stuff, etc. I took regular lunch meals/breaks (that's obviously not a deduction), and I drove to and from there with my car (didn't drive anywhere during and/or for the purpose of work). I purchased a laptop that I used a few times for tasks there, but it was/is honestly a personal laptop more than anything. So, that's where it leaves me...At the very least, I guess I've learned to be more careful about things like this.
There are endless horror stories of people getting paid 1099 and not banking the money needed to do the quarterly filing. They're the ones with the IRS garnishing their paycheck.
If you set up a payment plan with the IRS when you file you return, they allow you up to 72 months to pay your taxes, I think they charge a 6% interest rate. My Wife runs a business and didn't pay a dime in taxes one year because I was unemployed and we needed the money to pay our bills. We were able to set up a payment plan when we filed, which worked out great, we paid a monthly payment and when I found a good job we were able to pay off the back taxes in full. It's wasn't an nightmare at all. It's the people who ignore the taxes they owe when they file that get the IRS horror stories.
You could look up the 1040-ES to see if you're required to file quarterly taxes. It depends on how much you paid for 2014, how much taxes were withheld during 2015, and how much you think you owe for 2015. It's explained in the instructions. If you owe money, you could try filing the last quarterly installment which was due on Jan. 15.
They could've also hired you as a non-exempt employee for the probationary period. In both cases, they pay you an hourly rate. In the case of a non-exempt, they have to pay time and half for overtime. The contractor submits an invoice, while the employee submits a time report.
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