Different categories with IRS

In about 1997, the IRS began pushing the use of SE (statutory employee) for MTs.  If you are an MT with a long-term arrangement to provide services to an MTSO, this is the classification that is appropriate, regardless of full or part time.  You can be an IC and SE at the same time without one affecting the other.

I was an IC, SE and employee in 1998.  My return was audited. I had a contract for each instance that spelled out my relationship with each.  THAT is what saved me and the SE company from having to deal with an IRS mess. 

MT has become less of a long-term arrangement these days with heavy turnover.  People take jobs - or jobs change, i.e., going to VR - and realize they are not making even minimum wage and leave.  Companies don't want to be in a position of either guaranteeing (sp) work or a minimum per hour wage, so they offer IC to protect themselves.  You can ask about moving to SE status after a trial period.  Some of the smaller services may accommodate this; others won't. 

Whatever happens with the status of the job, DO protect yourself with a contract because the IRS pendulum is swinging back in the direction of reclassifying MTs as employees and moving away from the use of SE.

• Full-time IC? - Another frustrated MT
  • Different categories with IRS - IC, SE and employee

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