Last year I quit my job in a medical group to follow the doctor i was working for when he started his own private practice since i was the only employee he asked me to work as an independant contractor until he established the office..so I agreed. He told me that i would be able to work under his office license...WRONG. I just recieved a letter from that city stating that I owe a business tax license and I have to pay a penalty for not having my own business license and working in their city! Should I try to have that doctor pay for this because he should of known that i needed this. I was young and didnt really understand what i was getting in to. He also told me that when i did do my federal taxes that it would be no more than 1000...it was 7000. I no longer work for him!
2007-10-10 13:47:16 · 3 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
Along the lines of what jonas was saying, there are many cases where an employer will tell you that you are working as an independent contractor, when the IRS will say that this is illegal.
It was a common practice several years ago for companies to try to get out of paying taxes and benefits for an employee by having them switch to being an independent contractor, doing the same job they had done as an employee, but now they are on the hook for not only their own medical, but also the employer half of SS.
If you were still working for the same doctor, doing the same job, this may fall under that heading. I would consult the IRS about the status of you being an independent contractor, or if you were actually an employee under the IRS rules. If the IRS rules you were an employee, you should be able to get back the employer half of SS, and be able to go back to the city and use the IRS ruling to negate the fines and need for a license.
Since you no longer work for the man, if he gets pissed at you for turning him in, so what; he deserves what he gets.
2007-10-14 12:09:02 · answer #1 · answered by Mcgoo 6 · 0⤊ 0⤋
No, the doc has no liability to you. You agreed to do contract work so it was up to you and you alone to find out what the legal requirements were.
Small consolation, this expense is deductible on Schedule C. It's a reasonable and necessary business expense. Any penalties and fines are not deductible, just the license.
2007-10-10 14:16:13 · answer #2 · answered by Bostonian In MO 7 · 1⤊ 0⤋
If you were improperly classified by your 'employer' as an IC, then you can report this to the IRS, get paid a commission on the extra tax they collect from him, and get your payroll taxes paid by the doc. Of course, he will be pissed, but he will be arguing with the IRS, not you.
2007-10-10 16:41:01 · answer #3 · answered by heart_and_troll 5 · 1⤊ 0⤋