I was originally hired and paid as a regular employee and now my employer has cut my paycheck in half and has been paying me as a 1099 when nothing about my job has changed. I still have to go into the office everyday and work as usual. Isnt this illegal? I think he is doing this to avoid paying the withholding taxes, that now I will have to pay. Isnt this illegal? He is doing this with all his employees. What can I do to get him to pay all the taxes from the last 5 months this has been going on?
2007-05-17 08:34:28 · 7 answers · asked by Taylor L 1 in Business & Finance ➔ Taxes ➔ Other - Taxes
Yes, this is illegal.
There are forms that you can file to have the IRS make a determination of whether or not you are an employee.
There is no choice when it comes to determining whether a person is an employee or contractor. There are many criteria.
go to this site:
http://www.irs.gov/govt/fslg/article/0,,id=110344,00.html
What you have going for you is that he paid you as an employee before so the IRS will know that something has changed.
2007-05-17 08:44:18 · answer #1 · answered by Mark S 5 · 3⤊ 0⤋
He probably switched from employee to contractor to save money on payroll taxes and worker's comp insurance. The withholding tax isn't what he's saving on, it's the employer share of Social Security, unemployment insurance and disability premiums. It's not legal and he's putting you at risk. If you get hurt on the job, you won't be covered by worker's comp.
Contact your state labor department and/or the state and federal tax authorities and explain your situation. They will probably come down on him pretty hard and might levy a heavy enough fine to put him out of business. But the IRS offers a 10% reward for people who turn in tax cheats, so you might get something out of it.
For the time being, it's time to start looking for a new job.
2007-05-19 07:54:22 · answer #2 · answered by crazydave 7 · 0⤊ 0⤋
Start looking for another job. Once you report him to the IRS, you will lose your job. Ask your employer for a record of your income and taxes withheld. If he refuses, then you know that it's most likely that he is cheating.
What he did is illegal if he controls your hours, etc. There is a test on the IRS web site (http://www.irs.gov/businesses/small/article/0,,id=99921,00.html) that runs through a few scenarios.
2007-05-18 09:24:08 · answer #3 · answered by garyg7 7 · 0⤊ 0⤋
The consensus right this is which you have been an worker. I agree. in case you do no longer protest your status by using way of the SS-8 course, that is what happens: a million. Tax on all your wages 2. approximately 15% of your pay to payroll taxes. in case you gain getting your self categorized as an worker, you nevertheless owe a million. Tax on all your wages 2. 7.sixty 5% of your pay to payroll taxes. So the version to you is 7.sixty 5% of your pay, or $a million,800. As you have got here upon, while you're no longer an worker, you may no longer collect unemployment reward. So, to save your self approximately $a million,800 in payroll taxes, and to collect unemployment reward, you will would desire to document the SS-8 with the IRS and to document a complaint with your state exertions board.
2016-12-29 08:48:47 · answer #4 · answered by ? 3 · 0⤊ 0⤋
Yes it's illegal, and yes, of course he's doing it to try to avoid employer taxes.
Contact the IRS.
2007-05-18 03:16:55 · answer #5 · answered by Judy 7 · 0⤊ 0⤋
Yes this is illegal. Because you clearly not a contractor.
2007-05-17 08:45:42 · answer #6 · answered by Anonymous · 1⤊ 0⤋
No, he can not do this.
Maybe it is time to look for another job. This may be a sign that the company is in financial trouble.
2007-05-17 09:09:26 · answer #7 · answered by Wayne Z 7 · 1⤊ 0⤋