what actions can i take against my boss for miss classifying me as an independent contractor?

Question

I am an employee and i suspect that my boss is going to give me a 1099.Hes going to classify me as an independent contractor.Is there any actions to take and how should i file my forms this year?and also would h&r block take care of this?

Answer 1

I have a 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. The basic issue is the amount of control the employer has over the worker. If you are required to show up for work--personally--at a particular time, punch the clock, use the employer’s equipment and are paid an hourly rate, or another set rate based on time served, 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 employee's half of social security. You will still have to cough up all the income tax. IRS and the states are stepping up enforcement in this abuse area.

You need to send a Form SS-8 to IRS and see what it says.

Answer 2

Did you and your boss sign a contract when you hired on with his firm? If you did then consult the contract, if not then there are rules that apply to people who are employees. For example, if he expects you to be at work at certain hours and assigns you certain tasks then you are probably an employee.

Is he withholding Federal Income tax, social security and medicare? If so you are an employee and should receive a W-2. If nothing is being withheld then he may try the old switcheroo on you and issue a 1099. If that happens then try to resolve the issue with him -- for example he could pay you a bonus that would cover your self-employment expenses.

If he doesn't then you will need to report this to the IRS and they will investigate the issue. You will need to provide proof that you were an employee and not an independent contractor.

H & R Block may be able to advise you in this situation but they will not be able to intervene. They can only enter the data provided by the taxpayer.

Answer 3

Have you been receiving paychecks or deposit information showing federal withholding, social security and medicare? If so, then you will receive a W-2.

If you receive a 1099 and want to challenge it, file form SS-8:

http://www.irs.gov/pub/irs-pdf/fss8.pdf

Once you have filed this form, use Form 8919 to compute and report uncollected SS and medicare tax on your wages:

http://www.irs.gov/pub/irs-pdf/f8919.pdf

Attach Form 8919 to your tax return.

You will pay your share of SS and Medicare taxes on your return, but you will not pay the employer's share. Your 1099 compensation should be reported as wages, not on Schedule C.

What will happen is that the IRS will investigate your SS-8 claim and make a determination if you are or are not an employee. Your employer will know that you have filed the form.

If it is determined that you were an employee, the IRS will collect the self-employment taxes from your employer. If the IRS determines that you were an independent contractor, the IRS will collect the remaining payroll taxes from you.

In either case, penalties and interest will apply to either you or your employer, depending on the determination of your status.

Answer 4

You "suspect" he's going to give you a 1099? Are you saying there are no taxes taken out of your paycheck? Then you don't have to just "suspect", it's pretty clear. Have you asked him why taxes aren't being taken out?Did you fill out a W-4 when you started work (employee) or a W-9 (contractor)?

You can file a form SS-8 with the IRS to ask for a determination of your status, employee or contractor.

Answer 5

Some states have even more strict rules. For example in Mass. if you have someone do work for you and it is the same type of work you in the normal course of business, they are an employee no matter what.

Ex. in mass there is no such thing as a computer programmer doing independent contractor work for a computer programming company.

This law was put in place to increase the burden of employers, making everyone they can get their hands on an employee. This was done in the name of competetion. They said that the insignicant overpaid fluffy unions were burdened with competing with other firms that do not have their employment costs. So to encourage fair competetion they thought they would increase costs of other to compensate. Someone needs an economics textbook. What a joke, but it exists.