A community of 30,000 US Transcriptionist serving Medical Transcription Industry

Is there an advantage for the company to keep you as an IC? - Lois

Posted: Apr 26, 2011

I got a job for a company as an IC for the first 60 days, with the promise after that time with achievement of required line counts and 99% QA, I'd be eligible for employee status. I don't have the discipline to put tax money aside so want the employee status very badly, but here my 60 days came and went, and I didn't make 99% so have to remain an IC another month. Is there an advantage to the employer not paying your taxes??? I'm really suspicious and think they're never going to give me employee status . . . am I justified or just justifiable ???

Just a thought - sm

[ In Reply To ..]
As an IC here is what I do for taxes. I take 20% of whatever I get paid and transfer it to the savings. I figure it's not mine to spend and if I was working for someone they would take it out anyway, so when payday comes I just do it. You can have the discipline to take money out for taxes. If you have the discipline to pay rent and utilities then you have the discipline to set money aside for taxes. All it takes is transferring 50 or 100 or whatever on the day you get paid to a savings account (or other account). The advantage I see is that you can write off some of your bills as deductions where you can't if you are an employee.

:) - Lois

[ In Reply To ..]
You are obviously a lot more disciplined than I am! Your suggestion seems so easy, but in this economy, it just goes. Seriously my bank does an auto transfer from checking to savings once a month, and I'm on later that day putting it back in my checking account! I have noticed that a lot more companies are only hiring ICs so I guess I'd better get used to it . . . thanks for your advice :)

IC status is a rip - by - a used to be MT

[ In Reply To ..]
Of course there is an advantage for your MTSO to keep you at IC status. As an IC, no taxes are taken out - big whoop according to the other replies you got - just be disciplined and take them out yourself. What they are failing to tell you is that as a self-employed person you pay 100% of your social security tax (or FICA tax). With employee status you pay 50% of that FICA tax and the company you work for pays the other half. BIG, BIG DEAL... So, it's more than just being disciplined and deducting the tax yourself, you will actually pay more on that Federal social security tax. Ha! Ha! Just another way the pimps screw us.

self-employment tax - ic mt

[ In Reply To ..]
You actually write off 50% of that 100% so indirectly, it's the same as if you had an employer withholding it.

liar - liar

[ In Reply To ..]
what I write off is what I can show proof of. I don't just figure what that tax would be and write it off. I have to have figures to back up what I'm writing off such as a percentage of my utilities for my home office space, supplies, work-related mileage, etc. For every write-off, there has to be an explanation of what the money was spent on. One cannot just write off a tax. And you say it averages out, I had to spend that money to write it off. With employee status 50% of the tax is paid for me. There is no magical write off for taxes - unless you want to pull a number out of the air and put it on your tax forms for a deduction and risk an audit.

I beg to differ - ic mt

[ In Reply To ..]
I've used Turbo Tax Home and Business for 13 years or so. And EVERY YEAR, there's a deduction for 50% of my self-employment tax. If you are doing your own taxes and missing the deduction that doesn't make me a liar, does it?

http://www.ssa.gov/pubs/10022.html

Instead of spreading false information, educate yourself. Major issue with many ICs is they don't know how to really be an IC.

You'll notice on that link, that it specifically says, "First, your net earnings from self-ÂemployÂment are reduced by half of your total Social Security tax. This is similar to the way employees are treated under the tax laws, because the employerâ��s share of the Social Security tax is not Âconsidered wages to the employee."

Carry on.

Yes and no - ICMT2

[ In Reply To ..]
It is line 27 in the Adjusted Gross Income section of IRS form 1040. This does not reduce the actual self-employment tax you pay, but it does reduce your gross taxable income and saves you whatever percentage of that income you would have paid in taxes. I think that the line that says this is a similar in treatment to employee/employer situation is referring to the fact that the employer deducts their FICA/MEDI match as a business expense. I am not a tax professional and am not in any way attempting to give tax advice.

exactly - hit the nail on the head

[ In Reply To ..]
you said what basically my accountant said. It's not the same as being an employee and costs extra.

nail on the head - Lois

[ In Reply To ..]
So the company does benefit from keeping me an IC? I can't be an IC. All the tax advice in the world won't make me put that money aside every month. Guess it's time to move on.

Used to be MT - Old Pro

[ In Reply To ..]
No one can mistreat you without your consent. I wish everybody would stop being victims. There is an old saying: You deserve the kind of treatment you will accept. I have had companies mistreat me (MQ!) but I got out of Dodge and got a better job. Sure, it's work, but it sure beats whining.

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