Do I need an EIN number and a DBA Certificate?

Question

Hi,
I work for a company that supplies the flowers to a local Wholesale Store. I am a 1099 or Independent Contractor and no taxes are taken out of my paycheck. My question is the company that I work for is asking that I get an EIN number and apply for a DBA certificate and when I researched both of them on the internet I don't understand why I would need either of those as the business is not mine as I work for the company.....so can they do this or should I refuse?

I get a paycheck every 2 weeks....I get the same base pay + a certain percentage if the store sells alot of flowers during those 2 weeks. I do not send them an invoice or anything for my hours.
What do you think?

Thanks guys for all your help! I didn't realize alot of things that you had pointed out! I will definitely fill out that IRS form now!

Answer 1

I agree 100% with Judy. Get a copy of Form SS-8 http://www.irs.gov/pub/irs-pdf/fss8.pdf and file it with the IRS for a determination.

If the firm you are working for determines your work hours, specifies what you will do, provides you the tools, space, and equipment to do your job then you are an employee by law and are NOT an independent contractor.

They are ripping you off by classifying you as an IC. If you were laid off you would NOT be able to collect unemployment compensation for example. And if you were hurt on the job you would NOT be entitled to any worker's compensation benefits.

What they are most likely trying to do is cover their asses by asking you to get an EIN and DBA certificate so when the IRS questions your status they can try to continue with the status-quo, i.e. ripping you off. You're paying twice as much in Social Security and Medicare taxes as you should be AND you are losing out on the basic benefits of being an employee such as unemployment and worker's comp coverage as noted above.

File that SS-8 NOW and put a stop to this abuse!

Answer 2

I think you are being hosed!

I have canned explanation to apparently clueless independent contractors:

Some employers try to get around paying employment taxes (social security and unemployment) and other employee benefits like workers compensation insurance by improperly classifying employees as independent contractors. If you are required to show up for work--personally--at a particular time, punch the clock, use the employers equipment and are paid an hourly rate, you are an employee. If you didn't understand the difference when you posed your question, I would be even more convinced that you are an employee. What is your preference, Slotted or Phillips? Complete an IRS Form SS-8 to get an official ruling on your status. This will help you get unemployment if you get fired. When you file your income tax return, you can attach Form 8919 Uncollected Social Security and Medicare Tax on Wages and only pay the employer's half of social security. You will still have to cough up all the income tax.

Aside from this, a business owner does not need a federal employer ID number unless he has to file business tax returns. You do not need a fictitious name certificate unless you have a business with a name other than your own. Mary
Smith doesn't need one unless she wanted to operate a flower shop and call it "The Fragrant Flower" or something like that.

Answer 3

What I think is that you are probably really an employee and they're illegally classifying you as a contractor.

You'd need an EIN if you had employees. Doesn't sound like you do. And I don't see why you'd need any DBA anything either.