Am I self-employed or an independent contractor or both or something else altogether?

Question

I am a psychology fellow (aka: soon to be licensed psychologist) in a private group practice. I do not earn a salary. The practice is reimbursed by the insurance companies for my services. Then the practice issues me a paycheck every other week. The amount of my paychecks varies from week to week but usually not more than a few hundred dollars. I receive a 1099 and pay estimated taxes quarterly. I pay my own malpractice insurance and have health insurance through my spouse. Most major business and office expenses are paid for by the practice.

I usually tell people that I am self-employed but I'm wondering if there is a more accurate term to describe my situation. Plus, lenders to give me hard time about it due to the unpredictable and inconsistent pay.

I did sign a contract when I was hired.

I set my own schedule. I give the practice available blocks of times on certain days and they schedule client appointments within those time frames.

Answer 1

You sound more like an employee of the company (if you are on their payroll). If you are not registered with the company as an employee, then I would say you are a permanent independant contractor thru the partnership you represent. Did the company make you sign a contract of employment?

If you were self-employed, you would have to provide your own office, file for your own insurance claims, file your own tax paperwork, etc.

Answer 2

If you are an independent contractor you are self-employed. If you are an employee for the company you work for, it's a different matter. It sounds like you were an employee at one time but now you're self-employed (as a legal matter). Normally taxes are not withheld from money paid to an independent contractor, unless the contractor has not provided his or her social security number (not the case here). When you file your taxes, you should receive back any money that was withheld that you didn't owe, but keep in mind that as an independent contractor you are responsible for paying 15% of your income (up to about $80K) for FICA (which is social security, etc.) This is not the same thing as income tax. Normally an employee pays 7.5% to FICA and their employer pays the other 7.5%, but as a contractor you're responsible for both halves. You'll need to include a Schedule C with your tax return, and you'll have to use form 1040 (not 1040A or EZ) because of being a contractor. It's a big pain in the ***.

Answer 3

You are more of an independent contractor than self-employed, because of the 1099, but either type gets them. This is kind of a wierd arrangement because normally a test of employee vs self-employed is whether you set your hours and schedule, but presumably the practice makes appointments for you. Since you don't have an office in the home, I would say you are an independent contractor. For various reasons, it would be a good idea to get some work with other practices for example so the IRS does not begin looking at you as an employee and challenge the practice about withholding taxes and paying their share of Social Security.

Answer 4

Are you require to work at a specific location and at specific times? Does the practice provide you with office space to do your work? Does the practice pay the employer's share of FICA?

You might want to check with your tax adviser but you may be an employee who is paid based on a commission schedule.

Answer 5

Yes, you are self employed. Tell your lenders you wish to obtain credit without stating your income. There is a word for it, but i am blank at the momment. I used to be a real estate agent, this was the norm for my business.

Answer 6

Similar to a commissioned sales rep maybe?