I just got hired as a lab tech at a medical device company. It is an entry level job, and is part time as I am still a student. They are hiring me as a 'consultant' even though I have no special expertise. I assume they are doing this for some benefit of theirs. Will my taxes end up being more than if I were an official part time employee?
2007-06-21 17:42:17 · 3 answers · asked by Brian H 2 in Business & Finance ➔ Taxes ➔ Other - Taxes
No - just means you will have to track your own taxes as if you were an independent contractor. However - if they have you working set hours and such - then they are skirting fraud and employment tax fraud by trying to do it this way.
As an independent contractor/consultant - they cannot dictate the hours you work, manner of conducting business - etc.
2007-06-21 17:47:17 · answer #1 · answered by Mike Frisbee 6 · 0⤊ 2⤋
Yes, you'll pay both the employer and employee halves of social security, so you'll be paying 15.3% for social security and medicare instead of the 7.65% you'd pay as an employee.
And by the way, they don't just get to decide whether you're an employee or an independent contractor, there are rules that depend on the job duties. See http://www.irs.gov/businesses/small/article/0,,id=99921,00.html
2007-06-22 01:22:57 · answer #2 · answered by Judy 7 · 1⤊ 0⤋
You will pay more soc. sec. as a consultant than as an employee. However, on the plus side, on your Sched C you can deduct travel and misc expenses.
2007-06-22 23:12:09 · answer #3 · answered by LC 2 · 0⤊ 0⤋