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Stephanie B.
Stephanie B., Enrolled Agent
Category: Tax
Satisfied Customers: 556
Experience:  MTax, EA, QuickBooks Proadvisor. Over 15 years accounting and tax experience specializing in individual and small business.
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My employer wants to set me up from contract labor to being

Customer Question

My employer wants to set me up from contract labor to being on the payroll.. Should I do this I have back tax issues and I doubt I will get any kind of refund.. Should I stay self employed and just pay at the end out of pocket?
Submitted: 3 years ago.
Category: Tax
Expert:  Stephanie B. replied 3 years ago.

Stephanie B. :

Thank you for your question.

If you are a true employee, your employer should be reporting you as a W-2 employee. If your employer has misclassified you as a subcontractor, he/she could owe back employment taxes upon an audit. The IRS is scrutinizing companies much more closely for this misclassification now.

Here is a link to the IRS website regarding subcontractor vs employee.

If you owe back taxes, this may be a way to help catch those up. Although you may not get a refund, it will assist in reducing your back tax owed and possibly make it so you don't increase your tax debt for 2012.

Let me know if you need further clarification.

I look forward to your response.


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