Have a Tax Question? Ask a Tax Expert
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This is a Tax and a Legal Issue. I known that Labor Laws are dictated by the state. For Example: California Labor Law States that in a definition of a Contracted person must be able to set their own appointments, supply their own equipment and have more than one employer.
Your employer may be trying to get out of the 7.5 % in SS Tax as well as the other expenses of having an employee
You may want to go to the labor board and ask them with out giving your name, if this is correct or what are the definitions of an employee v. contracted employee.
Though being a contractor can be advantageous on the tax end due to the fact that you can file a schedule C and write off all expenses against the income.
But if jobs are hard to find, you may want to do this very quietly regarding the labor law and not discuss the issue with anyone around the business unless you have all the facts.
But I don't think he can do this because "he controls your time" unless he charges you for the use of the facilities and collects on your behalf and then distributes properly.
I can see he is trying to save $$ here on his end and I'm sensing it's not legal.
If you remain a contractor then keep good records as to your own business
Thank you for your time and advice. I am a retired teacher receiving a teacher"s pension. My aerobics jobs provides me with some spending money. As much as I enjoy teaching my classes, I don't make enough to end up having to pay taxes at the end of the year. I do work at the desk two days a week. He said that he would take out taxes for that part of my pay. I'm just confused. Again, I appreciate your advice.
Well I can understand why... but in my opinion, he's cutting corners and I don't think it's legal but you would have to verify through the state. You will receive a 1099 showing No Taxes taken out and it may hit you at the end of the year.
But if you make under a certain amount you may not have to pay. I do not now if you have limits to what you earn while receiving a pension but keep an eye on that too.
Remember, knowing the law gives you the power... call the labor board to inquire your specific state requirements with out reporting him. It's my way of saying "get it straight from the horse's mouth"
But the tax aspect is in my perview and you can benefit from the deductions if you have any.
Thank you. You provided me with a plan for action. Have a great day.