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Determining If You Qualify as an Independent Worker or an Employee:

Should You File the IRS Form 8919 for Misclassified Workers?


Are you an independent contractor or an employee? The company you work for may be paying you as an independent contractor but treating you like a regular employee. If so, the IRS has issued Form 8919 for misclassified workers. It is used to figure and report your share of uncollected social security and Medicare taxes due on your earnings. Filing the form may mean paying less than you would in SE taxes, but the employer will pay more. Use Form 8919 if one or more of the following is true.

The IRS Already Declared You Are an Employee

For quite some time, you suspected you were being treated as an employee. In fact, you asked the IRS if they agreed with you and went to the trouble of filing Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. It turns out you were right and the IRS made it official. If you have already received a determination letter from the IRS stating you are an employee of the company, then you should file Form 8919 for the 2007 tax year.

You Have Been Through This Before

This may not be the first time you wondered if your work status still qualified you as an independent contractor. If the IRS has already audited the company (aka your employer) and the company filed for tax relief under Section 530, then you are considered a Section 530 employee. If you were designated as such, either by the employer or by the IRS prior to January 1, 1997, then you should file Form 8919.

Just Because the IRS Said So...More or Less

Whether you were declared a Section 530 employee or were just sent a letter that says you are definitely not an independent contractor, the fact that the IRS has discussed the matter with you is really good enough. If you have received any type of correspondence from the IRS that states you are an employee, then it counts and you should file Form 8919.

You Did Similar Work Before – As an Employee

It may be that you once worked for a company as an official employee and then decided to renegotiate your status to that of an independent contractor. Unfortunately, little may have changed - except for the fact you are receiving a 1099, not getting benefits and are paying out over 15 percent in self-employment (SE) taxes. The IRS says that if you were previously treated as an employee by the company and you are now performing services in a similar capacity and under similar direction and control, then you are still an employee and should file Form 8919.

Your Co-Workers Do Not Get 1099s

Often, you can determine your status simply by taking a look around you. It may be that your co-workers are performing similar services under similar direction and control (which means the company not only tells you what work to perform but how and when it gets done). If this is the case, and those co-workers are treated as employees, then you should be, too. The IRS says go ahead and use Form 8919.

Everyone Else Has Been Declared an Employee

As mentioned before, it may be that your co-workers are performing similar services for the company under similar direction and control, just like you. And, it turns out that they filed Form SS-8 (Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding) and already received an official letter of determination from the IRS that they are indeed employees. The IRS notes that if this is the situation, then chances are good that they would also declare you to be an employee so you should file Form 8919.

It Is Only a Matter of Time

Perhaps you have filed Form SS-8 with the IRS to officially determine your status as either an employee or an independent contractor. Unfortunately, your taxes are due to be filed but you have not gotten an official response back from the IRS. Well, even if you do not have a letter in hand, the IRS is fine with you going ahead and filing Form 8919 for the 2007 tax year. Apparently, it does not matter how certain or uncertain you are of officially being declared an employee, the simple fact that you went to the trouble of sending in Form SS-8 is good enough for the IRS.

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