Well, for beginners, you have to stand REAL still..... - nm

Gotta admit, that made me laugh. - nm

I'll do my own taxes, less messing with my check MTSO - does, the better off I am. nm

LOL! - Rocky R.

See link - mt2long

Smple definition - ez does it

they withhold SS/Medicare, not Federal or State taxes. N/M - thats it in 10 words or less.

Most DO w/h federal - mt2long

er, uh..doh. That's how they did it when I was an SE. - whatever N/M

You are NOT in most cases able to get UNEMPLOYMENT - LB1234

Verify this - mt2long

VERIFICATION; Per IRS No Federal Income Taxes and No Unemployment - FYI

Like a lot of things the MTSOs do, the classification of “Statutory Employee” if often misinterpreted and used incorrectly by some MTSOs.  They try everything they can to pay the least amount of taxes possible.  Does not mean it is correct, as we have all seen with the total misuse of the term “Independent Contractor” by many MTSOs.  

Yes, “Statutory Employees” are free to file for Unemployment, but because of this designation, they must be prepared to fight every step of the way because the MTSO will definitely refuse to go quietly, since many of them are NOT contributing to the Federal unemployment tax (FUTA) because they believe these employees are true “Statutory Employees.”  Once the MTSO gets burned a few times, they stop offering that designation.  You will find very few MTSOs who have “Statutory Employees” today.  

For “Statutory Employees,” companies are only REQUIRED to take out Social Security.  In fact, the IRS suggests they DO NOT take out Federal Income Taxes.  

 Here is the CURRENT definition, according to the IRS.  

http://www.irs.gov/publications/p15a/ar02.html#en_US_publink1000169473

Statutory Employees

If workers are independent contractors under the common law rules, such workers may nevertheless be treated as employees by statute, “statutory employees,” for certain employment tax purposes. This would happen if they fall within any one of the following four categories and meet the three conditions described under Social security and Medicare taxes , below.

1. A driver who distributes beverages (other than milk) or meat, vegetable, fruit, or bakery products; or who picks up and delivers laundry or dry cleaning, if the driver is your agent or is paid on commission.


2. A full-time life insurance sales agent whose principal business activity is selling life insurance or annuity contracts, or both, primarily for one life insurance company.


3. An individual who works at home on materials or goods that you supply and that must be returned to you or to a person you name, if you also furnish specifications for the work to be done.


4. A full-time traveling or city salesperson who works on your behalf and turns in orders to you from wholesalers, retailers, contractors, or operators of hotels, restaurants, or other similar establishments. The goods sold must be merchandise for resale or supplies for use in the buyer's business operation. The work performed for you must be the salesperson's principal business activity. See Salesperson in section 2.

Social security and Medicare taxes.   Withhold social security and Medicare taxes from the wages of statutory employees if all three of the following conditions apply.

• The service contract states or implies that substantially all the services are to be performed personally by them.


• They do not have a substantial investment in the equipment and property used to perform the services (other than an investment in transportation facilities).


• The services are performed on a continuing basis for the same payer.

Federal unemployment (FUTA) tax.   For FUTA tax, the term “employee” means the same as it does for social security and Medicare taxes, except that it does not include statutory employees in categories 2 and 3, earlier. Any individual who is a statutory employee under category 1 or 4, earlier, is also an employee for FUTA tax purposes and subject to FUTA tax.

Income tax.   Do not withhold federal income tax from the wages of statutory employees.

Reporting payments to statutory employees.   Furnish Form W-2 to a statutory employee, and check “Statutory employee” in box 13. Show your payments to the employee as “other compensation” in box 1. Also, show social security wages in box 3, social security tax withheld in box 4, Medicare wages in box 5, and Medicare tax withheld in box 6. The statutory employee can deduct his or her trade or business expenses from the payments shown on Form W-2. He or she reports earnings as a statutory employee on line 1 of Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. A statutory employee's business expenses are deductible on Schedule C (Form 1040) or C-EZ (Form 1040) and are not subject to the reduction by 2% of his or her adjusted gross income that applies to common-law employees.

Thanks for all the info! I just added it to my list of - things I dont want to be! R.Raccoon

Also... - MT