pmAgony wrote:

- quote -

Then be firm and negotiate. Don't be afraid to state your
case and give the appropriate reasons for it as you have
above. No problem.

And since you'll be paying your own taxes, be sure to add
about 10% (11.7% around these parts) to cover you shares of
taxes above what hourly rate you might have otherwise
earned.

ChEAr$,
Harlan Lunsford, EA n LA

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Seth Breidbart <sethb[at]panix.com> wrote:
- quote -

By satisfying the common-law definition of being an employee
of Client Corp. The IRS can decide that that is the
substance of the situation.

Steve

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Stuart A. Bronstein <spamtrap[at]lexregia.com> wrote:
- quote -

Seth's statement was that the incorporation "keeps them
from being deemed employees of the client company" which
is so far as I know incorrect. The IRS, (or EDD) can look
at the facts and still determine them to be employees of
the client company, irregardless of incorporation.

Steve

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Steve Pope <spope33[at]speedymail.org> wrote:
- quote -

I don't understand. If I'm a W2 employee of Five Friends
Consulting, and Five Friends Consulting has a contract with
Client Corp. providing my services to Client Corp to work at
Client Corp's offices under Client Corp's direction, how can
I be deemed an employee of Client Corp when I'm already an
employee of Five Friends Consulting?

Seth

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

spope33[at]speedymail.org (Steve Pope) wrote:
- quote -

Seth's point was that they are *somebody's* employees. As
long as they are properly classified, the company calling
the shots doesn't necessaruly need to be the employer.

Stu

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Seth Breidbart <sethb[at]panix.com> wrote:

- quote -

Not necessarily. Incorporating does not change the
contractor vs. employee classification.

Steve

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Dennis Marks <denmarks[at]yahoo.com> wrote:
- quote -

J`ust to narrow it down a bit, I am posting the "twenty questions"
that are used to define workers as contractors below. It
is not necesarry to be able to answer all questions affirmatively,
nor does the IRS (or others with audit ability on this point,
such as the EDD) have a fixed number in mind that they'd like
to see answered.

Steve

(below from www.wwwebtax.com)

The twenty common law factors of a perfect independent
contractor relationship are:

No Instructions. Independent contractors are not required to
follow, nor are they furnished with, instructions to accomplish
a job.

No Training. Independent contractors typically do not receive
training by the hiring firm. They use their own methods to
accomplish the work.

Others can be hired. Independent contractors are hired to
provide a result and usually have the right to hire others to
do the actual work.

Independent contractor's work not essential. A company's success
or continuation should not depend on the service of outside
independent contractors. An example violating this would be
a law firm which called their lawyers independent contractors.

No time clock. Independent contractors set their own work hours.

No permanent relationship. Usually independent contractors
don't have a continuing relationship with a hiring company. The
relationship can be frequent, but it must be at irregular
intervals, on call, or whenever work is available.

Independent contractors control their own workers. Independent
contractors shouldn't hire, supervise, or pay assistants at
the direction of the hiring company. If assistants are hired,
it should be at the independent contractor's sole discretion.

Other jobs. Independent contractors should have enough time
available to pursue other gainful work.

Location. Independent contractors control where they work. If
they work on the premises of the hiring company, it is not
under that company's direction or supervision.

Order of work. Independent contractors determine the order
and sequence in which they will perform their work.

No interim reports. Independent contractors are hired for the
final result only. They should not be asked for progress or
interim reports.

No hourly pay. Independent contractors are paid by the job,
not by time. Payment by the job can include periodic payments
based on a percentage of job completed. Payment can be based
on the number of hours needed to do the job times a fixed
hourly rate. Payment method should be determined before the
job commences.

Multiple Firms. Independent contractors often work for more
than one firm at a time.

Business expenses. Independent contractors are generally
responsible for their own business expenses.

Own tools. Independent contractors usually furnish their
own tools. Some hiring firms have leased equipment to
their independent contractors so that they could show the
independent contractor had their own tools and an investment
in their business. This strategy won't work if the lease is
for a nominal amount or can be voided by the hiring firm at
will. The lease must be equivalent to what an independent
business person could have obtained in the open market.

Significant investment. Independent contractors should be
able to perform their services without the hiring company's
facilities (equipment, office furniture, machinery, etc.). The
independent contractor's investment in his trade must be real,
essential, and adequate.

Services available to the public. Independent contractors make
their services available to the general public by one or more
of the following:

1) having an office and assistants;
2) having business signs;
3) having a business license;
4) listing their services in a business directory; or
5) advertising their services.

Profit or Loss possibilities. Independent contractors should
be able to make a profit or a loss. Employees can't suffer a
loss. Five circumstances show that a profit or loss is possible:

1) the independent contractor hires, directs, and pays
assistants; 2) the independent contractor has his own office,
equipment, materials, or facilities; 3) the independent
contractor has continuing and recurring liabilities; 4) the
independent contractor has agreed to perform specific jobs
for prices agreed upon in advance; and 5) the independent
contractor's services affect his own business reputation.

Can't be fired. Independent contractors can't be fired
so long as they produce a result which meets the contract
specifications.

No compensation if the job isn't done. Independent contractors
are responsible for the satisfactory completion of a job or
they may be legally obligated to compensate the hiring firm
for failure to complete.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Stuart A. Bronstein <spamtrap[at]lexregia.com> wrote:
- quote -

Many years ago, some friends of mine (who were independent
consultants) formed a company to avoid that problem.
They're all employees of the company, and the company
contracts with others to provide their services.

Even if those others have more control over the consultants
than would normally be allowed for independent contractors,
the fact that they're employed by another company keeps them
from being deemed employees of the client company.

Seth

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

"pmAgony" <fncuis[at]gmail.com> wrote:

- quote -

Type in "employee contractor" on the first page search box
and you will find all kinds of references.

--
Dennis

Disclaimer: The above is my opinion. I do not guarantee it. Be sure to back
up any files involved and use at your own risk. Batteries not included. Not
for internal use. Don't run with knives.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

I found the pages... thank you!

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

I've searched the IRS site and am having difficulty pinning
the "rules" page down. Can you point me in the right direction?

Thanks-

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

sethb[at]panix.com (Seth Breidbart) wrote:
- quote -

In theory. One of the reason so many people have trouble with
this is that those who want independent contractors for tax
purposes often want more control over the employee than the
legal definition of independent contractor allows.

Stu

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Dennis Marks <denmarks[at]yahoo.com> wrote:

- quote -

If you decide which you want to be _first_, you can generally
structure the transaction to make that apply.

Seth

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Dennis Marks <denmarks[at]yahoo.com> wrote:

- quote -

Sure you have a choice. You just need to follow the
rules that apply to the type of entity you've chosen to be.

Steve

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

"Dennis Marks" <denmarks[at]yahoo.com> wrote:
- quote -

They have specific rules to see who can get a 1099. Anyone
can be an employee.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Dennis Marks <denmarks[at]yahoo.com> wrote:

- quote -

Sure you have a choice. You just need to follow the
rules that apply to the type of entity you've chosen to be.

Steve

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

"Dennis Marks" <denmarks[at]yahoo.com> wrote:
- quote -

They have specific rules to see who can get a 1099. Anyone
can be an employee.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

"pmAgony" <fncuis[at]gmail.com> wrote:

- quote -

The IRS has specific rules to determine if you are an
employee (w2) or contractor (1099). Just go to their site
and you will find the detailed rules. You do not have a
choice.

--
Dennis

Disclaimer: The above is my opinion. I do not guarantee it.
Be sure to back up any files involved and use at your own
risk. Batteries not included. Not for internal use. Don't
run with knives.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

"pmAgony" <fncuis[at]gmail.com> wrote:

- quote -

I don't see any problem with telling him you'd rather be
paid on a 1099 - he saves money because he doesn't pay the
employer's portion of withholding taxes.

On the other hand it may be that he wants to put you on the
payroll because he figures he'll pay you less than it costs
as a separate company. If that's the case, be careful.
I've had clients approach me with similar deals over the
years, and they always turned out to be bad news in the end.

Stu

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

I need some help deciding what is the best option for me to
do. I am a web consultant and own my own business. The
business is very young, 6 months to be exact. I am looking
to start working from home and dedicating 100% of my time to
my company.

I have a few clients who I value dearly and pay me very
well.. To date, they all pay me direct and I pay taxes
through the company. However, I am in the midst of
negotiating a partnership with one of them who wants to put
me on his payroll.

Being that my company is young, I would like to establish
income history for it in case I ever need to proove income
when I am self employed (during the purchase of a home and
so forth). I don't know if I should accept the offer or
negotiate for them to just pay me outright that I will
handle the taxes through my company. I don't know if this
effects him in anyway either.

To me the logical answer is, get paid and then pay taxes
quarterly as an s-corp, however, I don't want to scare him
off or give the wrong impression. How should i go about
this? And moreover, what the heck should i do!?

Thanks for your advise,

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >