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Tyrone J. Taylor
Tyrone J. Taylor, Enrolled Agent
Category: California Employment Law
Satisfied Customers: 52
Experience:  Owner at Taylor Tax and Financial Consulting
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I am a home based consultant, doing work at home and the

Customer Question

I am a home based consultant, doing work at home and the client of the employer's site. I never do work at the employer location. I am given a laptop by the client to do all work. My W2 summary does not have statutory employee checked. I am not by common law a common law employee, but a statutory employee: homeworker. Can I submit my income on a Schedule C: Statutory employee DO submit on a Schedule C?
JA: The Accountant will know how to help. Is there anything else important you think the Accountant should know?
Customer: I did 2 w2 contracts last year. I received NO benefits. When my contract ends, the employment ends. I never go to the employer's office. I have a signed contract. I can show a profit or loss. I do work for more than one W2 employer at the same time.
JA: Tell me more about your problem so I can decide what kind of lawyer you need. Shall I connect you to our employment law expert?
Customer: My W2 s7ummaries did not have box 13, "Statutory Employee", checked, but I am not a common law employee by any of the criteria established by IRS publication Employer's Supplemental Tax Guide. I am an independent contractor by Statute. I have a continuing payment contract: paid every week, for months at a time. I have NO investment in the facilities that are being sued...
JA: Our top Accountant is ready to take your case. Just pay the $5 fully refundable deposit and I'll fill the Accountant in on everything we've discussed. You can go back and forth with the Accountant until you're 100% satisfied. We guarantee it.
Submitted: 8 months ago.
Category: California Employment Law
Customer: replied 8 months ago.
I do have a S Corp. By law, owners of a S Corp report income on a Schedule C. I had no benefits from the employer at all, except the employer paid half of my Social Security and Medicare taxes: that is all the employer did for me. I can prove that I work more than 1 such W2 contract at the same time...
Customer: replied 8 months ago.
The case Laverne Vanzant versus IRS Commissioner in 2009, defined the criteria for a Home based worker, for which I qualify:
1) does all work OFFSITE the Employer: at home or offsite the employer: Is a Home Based worker
2) Is not a common law Employee by definition present in IRS publication: Employer's Supplemental Tax Guide
3) Is not an Officer of the Employer company
4) Is paid on a continuing basis
5) Does not have an investment in the Client facilities or tools
Etc.
Customer: replied 8 months ago.
I purchase my own Professional Liability Insurance as well as Worker's Comp through my S Corp.
I would never claim Employment Insurance, which is voluntary...
Customer: replied 8 months ago.
From Publication 15-a: Employer's Supplemental Tax Guide: I am NOT a Common Law Employee, but A Statutory Employee:
Common-Law Rules
To determine whether an individual is an employee or an independent contractor under the common law, the relationship of the worker and the business must be examined. In any employee-independent contractor determination, all information that provides evidence of the degree of control and the degree of independence must be considered.
Facts that provide evidence of the degree of control and independence fall into three categories: behavioral control, financial control, and the type of relationship of the parties. These facts are discussed next.
Behavioral control. Facts that show whether the business has a right to direct and control how the worker does the task for which the worker is hired include the type and degree of:
Instructions that the business gives to the worker. An employee is generally subject to the business' instructions about when, where, and how to work. All of the following are examples of types of instructions about how to do work.
When and where to do the work. Not for me: I never go to the Employer site
What tools or equipment to use. Not for me, at all
What workers to hire or to assist with the work. Not for me, at all
Where to purchase supplies and services. Not for me at all
What work must be performed by a specified
individual. Not for me, at all; Not for me: I never go to the Employer site
What order or sequence to follow. Not for me: I never go to the Employer site
The amount of instruction needed varies among different jobs. Even if no instructions are given, sufficient behavioral control may exist if the employer has the right to control how the work results are achieved. A business may lack the knowledge to instruct some highly specialized professionals; in other cases, the task may require little or no instruction. The key consideration is whether the business has retained the right to control the details of a worker's performance or instead has given up that right.
Training that the business gives to the worker. An employee may be trained to perform services in a particular manner. Independent contractors ordinarily use their own methods. Not for me at all
Financial control. Facts that show whether the business has a right to control the business aspects of the worker's job include:
The extent to which the worker has unreimbursed business expenses. Independent contractors are more likely to have unreimbursed expenses than are employees. Fixed ongoing costs that are incurred regardless of whether work is currently being performed are especially important. However, employees may also incur unreimbursed expenses in connection with the services that they perform for their employer. Not for me at all
The extent of the worker's investment. An independent contractor often has a significant investment in the facilities or tools he or she uses in performing services for someone else. However, a significant investment isn't necessary for independent contractor status. I have my own Home Office, business license, business checking account; Professional Insurance, S Corp, etc.
The extent to which the worker makes his or her services available to the relevant market. An independent contractor is generally free to seek out business opportunities. Independent contractors often advertise, maintain a visible business location, and are available to work in the relevant market. I work multiple contracts at the same time.
How the business pays the worker. An employee is generally guaranteed a regular wage amount for an hourly, weekly, or other period of time. This usually indicates that a worker is an employee, even when the wage or salary is supplemented by a commission. An independent contractor is often paid a flat fee or on a time and materials basis for the job. However, it is common in some professions, such as law, to pay independent contractors hourly. I am paid hourly
The extent to which the worker can realize a profit or loss. An independent contractor can make a profit or loss. Yes, I can make a profit or loss
Type of relationship. Facts that show the parties' type of relationship include:
Customer: replied 8 months ago.
Written contracts describing the relationship the parties intended to create. Yes, I have written contracts that do this.
Whether or not the business provides the worker with employee-type benefits, such as insurance, a pension plan, vacation pay, or sick pay. No, I am NOT provided any of these
The permanency of the relationship. If you engage a worker with the expectation that the relationship will continue indefinitely, rather than for a specific project or period, this is generally considered evidence that your intent was to create an employer-employee relationship. Once my contract is cancelled, my employment ends
The extent to which services performed by the worker are a key aspect of the regular business of the company. If a worker provides services that are a key aspect of your regular business activity, it is more likely that you will have the right to direct and control his or her activities. For example, if a law firm hires an attorney, it is likely that it will present the attorney's work as its own and would have the right to control or direct that work. This would indicate an employer-employee relationship. I do not ever go to the Employer office; I am not an officer of the Employer
Customer: replied 8 months ago.
Statutory Employees
If workers are independent contractors under the common law rules, such workers may nevertheless be treated as employees by statute, (also known as “statutory employees”) for certain employment tax purposes. This would happen if they fall within any one of the following four categories and meet the three conditions described next under Social security and Medicare taxes .
1. An individual who works at home on materials or goods that you supply and that must be returned to you or to a person you name, if you also furnish specifications for the work to be done.
I always do some work at home, but all work is done OFFSITE the Employer. I am supplied a Laptop to do work on, which must be returned when my contract is completed. I must fulfill the terms of my contract: those are the specifications for the work to be done.
Customer: replied 8 months ago.
CORRECTION:
Financial control. Facts that show whether the business has a right to control the business aspects of the worker's job include:
The extent to which the worker has unreimbursed business expenses. Independent contractors are more likely to have unreimbursed expenses than are employees. Fixed ongoing costs that are incurred regardless of whether work is currently being performed are especially important. However, employees may also incur unreimbursed expenses in connection with the services that they perform for their employer. I HAVE MANY UNREIMBURSED EMPLOYEE EXPENSES. IF I AM AN W2 EMPLOYEE (BOX 13 IS UNCECKED), BY CALIFORNIA LAW I MUST BE REIMBURSED FOR THESE EXPENSES. mY AGENCIES ARE NOT REIMBURSING ME.
Customer: replied 8 months ago.
For my employing agencies to NOT designate me a Statutory Employee (box 13 checked), but a common law employee, they are breaking California Labor Laws:LABOR CODE
SECTION 2800-2810.52802. (a) An employer shall indemnify his or her employee for all
necessary expenditures or losses incurred by the employee in direct
consequence of the discharge of his or her duties, or of his or her
obedience to the directions of the employer, even though unlawful,
unless the employee, at the time of obeying the directions, believed
them to be unlawful.
(b) All awards made by a court or by the Division of Labor
Standards Enforcement for reimbursement of necessary expenditures
under this section shall carry interest at the same rate as judgments
in civil actions. Interest shall accrue from the date on which the
employee incurred the necessary expenditure or loss.
(c) For purposes of this section, the term "necessary expenditures
or losses" shall include all reasonable costs, including, but not
limited to, attorney's fees incurred by the employee enforcing the
rights granted by this section.
(d) In addition to recovery of penalties under this section in a
court action or proceedings pursuant to Section 98, the commissioner
may issue a citation against an employer or other person acting on
behalf of the employer who violates reimbursement obligations for an
amount determined to be due to an employee under this section. The
procedures for issuing, contesting, and enforcing judgments for
citations or civil penalties issued by the commissioner shall be the
same as those set forth in Section 1197.1. Amounts recovered pursuant
to this section shall be paid to the affected employee.2804. Any contract or agreement, express or implied, made by any
employee to waive the benefits of this article or any part thereof,
is null and void, and this article shall not deprive any employee or
his personal representative of any right or remedy to which he is
entitled under the laws of this State.
Customer: replied 8 months ago.
I live 75 miles away from the client. I stay overnight at the client location 6 days a week. California Labor law entitles me to a per diem of $200/day. I am not receiving this. I need to deduct these expenses, which by California Labor Law, the employing agencies HAVE to repay me or be in violation of those laws.
Expert:  Anne replied 8 months ago.

Hi

I'm Anne. I've been preparing taxes for 27 years and I'll be happy to help you.

First, if you receive a W2, even if it is incorrect, you absolutely may NOT put this income on a Schedule C. This will guarantee an IRS audit.

Your statement that you are an S Corp, and therefore must, by law, file a Schedule C is incorrect. A Schedule C can ONLY be filed by a Sole Proprietor. Since you have an S Corp, you MUST file a Form 1120-S. Please see below:

https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Which-Forms-Must-I-File

Please scroll down until you find S Cop.

I understand your arguments re: non reimbursement of employee expenses, but you can't solve that by checking the box next to "Statutory Employee".

You CAN go back to the employer and ask him to issue you a corrected W2 with that box marked.

You stated:

"I am a home based consultant, doing work at home and the client of the employer's site. I never do work at the employer location. I am given a laptop by the client to do all work."

One of the Common Law Rules is:

Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)

You stated that they provided the lap top, and that you were a client of the employer's site.

You also stated that you have a signed contract with this employer. I strongly suspect that this contract states that you will be treated as an employee. (Independent Contractors do not sign contracts, since the employer is not covering any payroll taxes for that individual)

I know that this was not the answer you wanted to hear, and for that, I am sorry.

You may try to re-negotiate your contract for this year with the company and see if they will pay you on a 1099 instead of a W2 for what's left of 2016.

Although I know this is not the answer you were hoping for, I do hope that this answer helps you, and that you will take the extra minute to rate positive by clicking on the stars.

It is ONLY through positive ratings that we are compensated for our time and knowledge.

Thank you for choosing justanswer.

Customer: replied 8 months ago.
This thread will be stopped now.
I see no need to continue this discussion with this person.
Please stop all other payments other than that agreed to: $38.
Expert:  Anne replied 8 months ago.

.

Expert:  Tyrone J. Taylor replied 8 months ago.

Good evening,

My name is ***** ***** I am an Enrolled Agent. Enrolled Agents are individuals who have been granted the ability to represent taxpayers in front of the IRS. I have been a tax professional for 9 years.

The IRS may demand collection of past due taxes up to 10 years from the time the taxes became assessed. This date is known as the Collection Statue Expiration Date, or CSED. If you owe money for past due taxes, it is important that your know this date. Prior to this date, the IRS may place a tax lien against any property a taxpayer may own. The IRS may also attempt to place a tax levy, or seizure, of assets in order to pay past due taxes. So, if the money from a reverse mortgage is placed in an account owned by someone who owes past due taxes, and the taxes are still within the CSED time period, they can potentially be levied.

I hope I’ve provided the information you were seeking. If you are happy with my service, please provide a rating. If not, please let me know so l can continue to help you. Thank you.

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