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Old 12-06-2004, 08:29 AM
D. Stussy
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Default Re: Employees or Subcontractors???

Gerald wrote:

- quote -

> Hi with my other question about taxes the issue came up with
> regard to my workers being classified as "employees" or
> "contractors".
> The business I own is a training school for adult. We teach
> classes on how to use computers, programs, hardware, etc.
> I work as the admin in the admission office and have decided
> to pay myself a reasonable salary.
> As for the instructors. They are now contractors. They have
> developed their own courses, set the dates/times/schedules
> of the courses, and run the courses the way they see fit.
> They also hop around to other schools and teach. I pay them
> $x per each student in their class. The school doesn't get
> involved in any way, other than to make sure they are
> teaching withing the state law guidelines. All the other
> schools in the area classify them as "contractors" too and
> have done so for years.
> So is it ok to assume the IRS will classify them as
> contractors too or is there a way they may be considered
> employees???


The ultimate determination would be based on the answers to
questions on IRS Form SS-8.

In this case, the teachers work for multiple places and
apparently there may be less "employer" control than for a
normal school institution. Industry standard is one of the
factors - and on that standard, I have seen BOTH situations,
so it is quite possible that the contractor treatment is
valid.

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Old 12-06-2004, 07:12 AM
Arthur Kamlet
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Posts: n/a
Default Re: Employees or Subcontractors???

Gerald <gerardtindale[at]yahoo.com> wrote:

- quote -

> Hi with my other question about taxes the issue came up with
> regard to my workers being classified as "employees" or
> "contractors".
> The business I own is a training school for adult. We teach
> classes on how to use computers, programs, hardware, etc.
> I work as the admin in the admission office and have decided
> to pay myself a reasonable salary.


What sort of business entity are you?

For example, if you are an unincorporated sole
proprietorship who files a schedule C, you'd better not be
paying yourself any salary.

- quote -

> As for the instructors. They are now contractors. They have
> developed their own courses, set the dates/times/schedules
> of the courses, and run the courses the way they see fit.
> They also hop around to other schools and teach. I pay them
> $x per each student in their class. The school doesn't get
> involved in any way, other than to make sure they are
> teaching withing the state law guidelines. All the other
> schools in the area classify them as "contractors" too and
> have done so for years.
> So is it ok to assume the IRS will classify them as
> contractors too or is there a way they may be considered
> employees???


If you have looked into IRS Pub 15A and Form SS-8 and have
convinced yourself they are contractors, go with it. Though
it couldn't hurt to get a second opinion from a local tax
professional.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->
  #-1  
Old 12-05-2004, 03:06 AM
Gerald
Guest
 
Posts: n/a
Default Employees or Subcontractors???

Hi with my other question about taxes the issue came up with
regard to my workers being classified as "employees" or
"contractors".

The business I own is a training school for adult. We teach
classes on how to use computers, programs, hardware, etc.

I work as the admin in the admission office and have decided
to pay myself a reasonable salary.

As for the instructors. They are now contractors. They have
developed their own courses, set the dates/times/schedules
of the courses, and run the courses the way they see fit.
They also hop around to other schools and teach. I pay them
$x per each student in their class. The school doesn't get
involved in any way, other than to make sure they are
teaching withing the state law guidelines. All the other
schools in the area classify them as "contractors" too and
have done so for years.

So is it ok to assume the IRS will classify them as
contractors too or is there a way they may be considered
employees???

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->
 

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