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Independent contractor and employee status - NewbieMT

Posted: Jan 18, 2011

This is concerning work. There is one question on the questionnaire that asks if I want to be on independent contractor or employee status. Could someone please explain exactly what the difference is and the Pros and Cons of such. Thank you in advance.

This is something that your school should - be able to help you with

[ In Reply To ..]
These employment issues should have been part of your MT curricullum.

Otherwise, you really need to do your own research. For one thing, you're asking for quite a bit of information. For another, everyone's situation is different. What one person would see as a benefit of one type of status might not be appealing to another. Only you know what would work best for you. There is a wealth of information available to you from official sources, start with some basic Google queries and you will find what you need from authoritative sources.

NewbieMT - Old Pro

[ In Reply To ..]
There is a lot of information about IC status on the IRS website. The best thing to do is to meet with your accountant, discuss your own personal situation, and let him or her advise you on which would be to your advantage. Good luck!

IC v Employee - NewbieMT

[ In Reply To ..]
Thank you

simple answer - ancientMT

[ In Reply To ..]
If an MTSO is asking you to be an IC or an employee, then you have to ask THEM how they differentiate between the two.

Historically, an independent contractor was an MT (or MT business, i.e. MTSO) who went out and secured contracts directly with the client (hospitals, doctors, clinics). They named their own prices. They bought their own equipment, made their own templates, etc. They also set the hours but this was done within the time constraints requested by the client.

Then MT services became more prevalent and THEY began to bring on independent contractor MTs. This meant that the MT was still pretty much designing their day, but there was negotiation on things like how much the MT was paid. The biggest benefit to the MTSO is that they were not responsible for Worker Compensation fees, unemployment fees, their share of Social Security/Medicare, or withholding any taxes from the IC.

Then this evolved into a huge abuse of being called an independent contractor. The MTSO dictates how the work is done, when the work is done, how much they will pay and the MT absorbs all the costs of the various taxes. Oftentimes, the MT is really an employee and the MTSO just doles out the IC status as a way to save themselves money.

As an IC, you have available to you different sorts of tax write-offs- I really recommend (as someone stated) you see an accountant if you go this route.

There *are* companies out there that use ICs as a true IC. They say here's the work, pay is negotiated, and it's up to the MT to stay within TAT. This is the kind of position I currently work.

So, the biggest difference really is all about taxes. If you are an IC, no one is paying a 7.5% share of SS/Medicare, and you will be responsible for a tax called Self-employment tax and it's a huge bite in the butt in many instances.

If you're an employee, you likely have a schedule to adhere to, may be provided equipment by the services, and other things.

Hope that gives you a glimpse. If you decide to go IC, please consult a professional as to what this will mean SPECIFICALLY for you and your situation.

IC v Employee - NewbieMT

[ In Reply To ..]
Thank you...you were very helpful.

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