Please respone IC versus Employee Status

Can the person who posted the site www.EFTPS.gov please reply to this...

My husband and I are "discussing" the ad/disadv between the two.  I know you said IC all the way.  Can you please tell me why IC is better? I would be gratefully honored!

THANK YOU!! 

• Please respone IC versus Employee Status - Mik
  • IC versus employee - Patti
    • It's a personal decision. - former bookkeeper w/acctg minor
  • Just my opinion.......employee status (SM) - GaTrans
    • That's faulty logic. You are paid less as an - employee so you are really funding employer's
      • I have to disagree with faulty logic response. (sm) - BayGirl
    • But Ga, I got stung really bad by MQ with insurance. They would - never "allow" me enough
      • Work conditions - Tammie
        • No Tammie you have that wrong. The more experience you have - the worse jobs you get,
      • oops........see inside - ..

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I am just curious which you prefer, and why?  I have never been an IC before and have just accepted an IC position and am a little nervous about it.  I like some aspects of it, but some things have me a little concerned.  I would just like to get a feel for what you think.

If you are an IC and you make 8 cpl, after deducting 7.5% self-employment tax you are making 7.4 cpl.  Then, if you are an SE and make 8 cpl and they pay half of taxes (7.5%) are you really making 8.6 cpl?  CONFUSED!!

I'm sure this has been asked a million times, but I am an IC and I am thinking of going to employee status to get benefits.  My husband will be self-employed in 2 weeks and we will have no insurance or anything.  I love the freedom of being an IC but need bennies.  We have no kids but probably will in a year or two.  Would like to know who has done the switch and if you regret it.

Thanks

For an employee with benefis  - what happens if you don't meet the minimum line count?  How do companies enforce that?  I've always been IC and considering changing.  Thanks

Do receive benefits through them?  I was under the impression they only hired IC for transcriptionists, which means you are self-employed and they really don't have to give you any work.  If we all sued every time we were "jacked around" by a recruiter or an employer, there would be no more transcription companies.

I have to agree...it's very concerning how companies try to save $$ by hiring you as IC and not as an employee, yet try to exert much control over when and how you work.  I don't think transcriptionists are aware enough of what/how much control a company can technically exert before they are really treating you like an employee and should be paying you as such.  The IRS website discusses "behavioral control" and I would be willing that many transcription companies exert much behavioral control over the ICs, which would technically classify them as employees. 

I am checking into other options for transcription.  Can anyone tell me how to compare all of these types of lines & also payment per word?  I know companies use different scales, so I wondered how they compare.  I have been paid on a 65 character line with spaces, but I may be making a change in the future - don't want to get burned.

Thank you in advance!

I have always charged or been paid by 65 or 60 character lines or per letter or space typed, but have never been paid or charged per gross line.

What is the advantage of this?  If I were to charge 11 cents per 65-character line including spaces, what does this figure out to for an average line rate and how do you do this calculation? 

I'm wondering if it is financially beneficial for me to bill by gross line or to keep it the way I have it.  I do know some accounts will only pay per 65-character line, as this was the deal my first own account I recently acquired.  They were adamant on a 65-character line, but didn't specify with or without spaces and I personally would never not charge for spaces.

Thanks for explaining this.  I appreciate it and hope everyone has a speedy day.

An employer should constantly evaluate the employment status of its workers to ascertain if any of them should be reclassified from an independent contractor to an employee. Misclassifying a worker could end up being quite costly in terms of time, money, and resources. If an employer is forced to reclassify independent contractors as employees, the payment of back taxes, penalties, and interest could create major financial problems. Ultimately, the risks of incorrect classification are borne by the employer. 

These factors should be used as indicators to determine whether sufficient control exists for a worker to be classified as an employee. However, they should serve only as a guide. They are subjective in nature, and each factor may not be present in all situations. Moreover, the weight apportioned to each one is not always constant. No single factor can determine a worker's status; all must be used in conjunction with each other to assess whether sufficient control is present to establish an employee-employer relationship. They are as follows.

1. Instructions. If the person for whom the services are rendered has the right to instruct the worker how, when, and where to work, then the worker is ordinarily an employee. This control factor is present if the employer retains the right to require compliance with the instructions, irrespective of whether the employer actually exerts the right to control. The instructions can be either oral or in the form of manuals and/or written procedures that state the details and means in which the result is to be achieved. In contrast, an independent contractor is responsible only for the end result.

2. Training. An employer trains workers by requiring them to work with experienced employees, holding training meetings, corresponding with them, or any of several other methods. By training a worker, the employer explicitly or implicitly states that the services to be rendered must be performed in a particular manner. The employer demonstrates a right to control by teaching the worker to achieve the desired results in that manner. Independent contractors, however, use their own methods and means to obtain a result and do not receive training from an employer.

3. Integration. If a worker's services are integrated into the business operations, then the worker is generally subject to direction and control. When the success or continuation of a business depends to an appreciable degree on the performance of certain services by a worker, those services are assumed to be subject to a certain amount of control by the employer.

4. Services Rendered Personally. The requirement that services must be rendered personally by the worker indicates that the employer is interested in the methods used to accomplish the work as well as in the result. Generally, inability to delegate the services to another individual indicates that the employer controls the details and means by which a result is to be achieved.

5. Hiring, Supervising, and Paying Assistants. if the employer hires, supervises, and pays a worker's assistants, then the employer has control over those assistants and the worker should be considered an employee. However, if the worker hires, supervises, and pays his own assistants and provides the employer with materials and labor under a contract in which the worker is responsible only for the results, he is an independent contractor.

6. Continuing Relationship. Continuous interaction between the worker and employer indicates an employee relationship. Such a relationship may exist in which work is performed at frequently recurring, though irregular, intervals.

7. Set Hours of Work. Establishing certain hours in which a worker is to perform a job indicates an employer's control. The fact that an employer can dictate a worker's hours is indicative of an employee relationship.

8. Full Time Required. If a worker must devote full time to the employer's business, the employer has control over the amount of time the individual actually spends working and, by implication, restricts the worker from performing other gainful work. In contrast, independent contractors are free to work when and for whom they choose.

9. Doing Work on Employer's Premises. Workers required to perform their services on the employer's premises when the work could be performed elsewhere are under the employer's control, which is beyond that which would ordinarily be exerted over an independent contractor. The importance of this factor depends on the nature of the services involved and the extent to which an employer generally requires its employees to perform services on its premises. Control over the place of work is indicated when the employer compels the worker to travel a designated route, canvass a territory within a certain time, or work at a specific place.

10. Order or Sequence Set. If an employer has the right to indicate the order or sequence in which work is to be performed, then the worker is probably an employee, particularly if the same results can be achieved in a different order or sequence.

11. Oral or Written Reports. The requirement that a worker submit regular reports to the employer can indicate a degree of control. It means the worker must account for his actions on the job to the employer.

12. Payment by the Hour, Week, or Month. When a worker is paid by the hour, week, or month and such payment is guaranteed, whether or not certain results are achieved, the worker is generally an employee. In contrast, payments made by the job or on a straight commission basis generally indicate that the worker is an independent contractor.

13. Payment of Business and/or Traveling Expenses. The IRS is of the view that when an employer pays a worker's business or traveling expenses, the worker is ordinarily an employee. Conversely, a worker who is paid on a job basis and must pay all incidental expenses is generally an independent contractor. Another issue to consider when evaluating this factor is the agreement between the employer and worker as to how such expenses are to be paid.

14. Furnishing Tools and Materials. If the employer furnishes tools, materials, and other equipment for a job, this indicates that the worker is an employee. Independent contractors ordinarily furnish their own tools and materials. In determining what the classification should be, the value of the tools and materials supplied to the worker should be considered as well.

15. Significant Investment. A significant investment by a worker in the facilities used in performing services for another is a factor that often establishes an independent contractor relationship. Conversely, the lack of investment in facilities indicates a dependence on the employer for the facilities--which means an employee relationship exists. The rationale is that whoever provides the equipment necessary to perform the services controls the use of the equipment.

16. Realization of Profit or Loss. A worker who stands the risk of suffering a financial loss or realizing financial gain as a result of providing services to the employer is generally an independent contractor. In contrast, a worker who has no risk of financial loss is usually an employee.

17. Working For More Than One Firm. If a worker performs services for more than one unrelated person or firm at the same time, it generally indicates that the worker is an independent contractor.

18. Making Services Available to the Public. Workers who make their services available to the general public on a regular and consistent basis are usually independent contractors.

19. Right to Discharge. Employers generally possess the right to discharge only employees. The threat of dismissal demonstrates a degree of control over workers. In contrast, the IRS's viewpoint is that independent contractors cannot be fired unless they violate the terms of the contract for services rendered.

20. Right to Terminate. If the worker providing the services can terminate the relationship with the employer at any time without incurring liability, an employee relationship usually exists. Conversely, an independent contractor engaged to accomplish a task or provide a service may incur a legal liability if the relationship is unilaterally terminated before the results of the task are accomplished.

These 20 factors may not always be appropriate for determining a worker's employment status, especially in the case of a professional, such as a physician, lawyer, or dentist. Control may not be the dominant issue in determining a professional's employment status. Revenue Rulings 72-203 and 66-274 state that other factors should be considered when determining the employment status of a professional, taking into consideration the skill required for the task, the intent of the parties involved in the employment relationship, and the custom in the industry.

Have been an IC-MTSO for close to 20 years.  Deduct my office part of the house, phone, internet, cell phone, mileage for anything work related including banking, errands,  (of course  I pick up and deliver and that give me a $5,000 write off), medical insurance payments, retirement contributions,  supplies,  partial utilities.   Start out with 50 to 55K and pay my SS taxes on 12 to 15K.  To me it is well worth it.  I always over withheld from my husband pay check or just paid the small penalty at the end of the year but you can do quarterlies.   I went to a tax guy for one year saw how he did it and then just bought Turbo Tax and followed him.   Works well for me.   Sure his fee is deductible but you still gotta pay it.  I prepared so much for him that I felt I could just as easily plug those figures in as his "help" so that is what I do.  Any more questions, youcan e-mail me at pjsword @aol.com.

Patti

I have a question about independent contractor status. Have do you pay taxes? Can you deduct office supplies, electricity, etc? If anyone have information please let me know. Thank you.