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Financial Planning / Tax Strategies
|Subject: Re: Employer classifying as 1099||Date: 1/25/2013 5:06 PM|
|Author: TMFPMarti||Number: 117531 of 122298|
Overall I'm not comfortable with how he is classified at his employment, but I'm happy he has a job he enjoys. Do I talk to the owner? Is this legal?
From the information you provided it appears that he should have been treated as an employee, not an independent contractor. There's no bright line. Instead there are 20 common law questions that, when taken as a whole, should give a pretty clear picture. Form SS-8 has those questions.
Lesson for your son. When you start working at a new job you should be asked for some tax paperwork. An employer will want a W-4, which is used to determine income tax withholding. If you're working as an independent contractor they should want a W-9, on which you certify your SSN and say that you're not subject to backup withholding. Your first paystub will also tell you since it will account for any withholding. It astounds me that so few people are the least bit curious as to what's on their paystubs. Get in the habit of always examining your paystub. Problems are much easier to correct when promptly addressed.
Let's assume that your son has been misclassified. What to do, what to do? For starters, if he's old enough to be working he's old enough to talk to the boss himself rather than having you do so. I always start with the assumption that I'm dealing with a person of good will who has made an honest mistake. You can always progress to calling someone a crook, but it's really hard to backtrack if you find out you've done so in error.
The boss's response will dictate the options that follow.
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