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Thread: Am I a Independent Contractor?

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    Question Am I a Independent Contractor?

    I am working as a License Massage Therapist.

    I choose what days and hours I would like to work.
    If I need the day off or any time off. I let the business know in advance. And if possible I will find another LMT to be oncall when I am not there.
    I have the right to refuse to work on a client if I can not help the client feel better.
    I work at more than 1 location for 2/3 business. I have business cards.
    I own my own Table, Chairs, etc...
    But the locations I practice massage they provide the table and room for me.
    I have a business license for one of the locations to practice massage because of being concidered an I.C. now I'm being told I am an employee.
    And I need to pay booth rent to practice massage at the one location to prove that I own my own business.

    I buy stuff that I need, Cream, sheets, professional clothing to work in, any extra products.

    AM I - I.C. or employee?

    State is saying I am not an I.C.

    Thoughts...

    Thanks for everyone's help.

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    Member Needs New Keyboard Array MyITGuy's Avatar
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    Sounds like an independent contractor to me.

    Here's an IRS Publication that might answer some questions, and you could always submit a form to them to have them determine your status...but the points below would make you a contractor in my opinion:
    You provide your services to several clients.
    You specify the time you work
    You have the right to refuse to work on certain clients.
    You purchase/provide your own supplies.
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    root Array Harold Mansfield's Avatar
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    Buying supplies doesn't make you an independent contractor. Plenty of people in plenty of industries buy their own supplies, tools, and have to obtain licenses or work permits for jobs.

    When I was a bartender I needed 3 permits to work.
    When I was a Limo driver, I purchased my own liquor, glasses, decor, and satellite radio for my car.
    For bigger cars I needed a CDL license.

    Whether or not they take the normnal employee taxes out of your paycheck is the difference.

    If you are an independent contractor you'd know it because they'd have to fill out a 1099.
    If you get a pay check and state and federal taxes are taken out, you are not an independent contractor.
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    Quote Originally Posted by Harold Mansfield View Post
    Buying supplies doesn't make you an independent contractor.
    Not on its own merit, but combined with everything else it supports the position of a contractor.
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    Member Needs New Keyboard Array tallen's Avatar
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    One issue may be that, in many situations, you have to get pre-approval from the state of your IC status. The default is almost always that you are considered an employee.

    But here are my questions: Do you WANT to be considered an Independent Contractor? Do the businesses you are working for WANT you to be considered an Independent Contractor?

    For a lot of businesses, there are usually advantages to treating their workers as Independent Contractors rather than employees, but there are hoops to jump through.

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    State is saying I am not an I.C.
    I'm going to take tallen's point a little further. Let's say the state is correct and you're an employee. What happens next, because you're an employee of a business, what do they have to do differently? What do you have to do differently? Did the state provide an explanation of what made them think you were an employee?

    I think you need to investigate further. Being an employee could just mean the "employer" has to withhold taxes from your payment (but only HALF of Social Security and Medicare taxes!) and you get a W-2 at the end of the year instead of a 1099. I think you need to sit down with your "employer" and figure out your next steps.
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    There more than just taxes, there is also liability issue. If she makes a mistake and rubs a client the wrong way, as an employee the company would shoulder the liability, as an IC she would need liability insurance to shield her from such claims. The is also the issue of unemployment benefits. As a IC should would have no unemployment benefits, as an employee she would.
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    Also worker's compensation insurance....

    When the OP says the "state" has determined she is not an IC, it could very well be the Worker's Compensation Board.... this is where the pre-determination of IC status often comes into play.

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    There's actually a 20 point checklist that the IRS uses to determine your eligibility. If you google "irs 20 point checklist for independent contractor" you should get a PDF file as the #1 search return. This explains the entire test to determine if you can legally be an independent contractor or not.

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