Form SS-8, Determination of Worker Status
Filing a Form SS-8 requesting a “worker status” determination means you or the firm is asking the IRS to establish if the services you provide to the firm are those of an employee or an independent contractor.
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If the company you work for has classified you as an independent contractor, one thing this means for you is that the company is not withholding any taxes from your pay so you will need to make estimated tax payments to avoid a penalty. This also means that the employer is not required to pay half of your social security so you will have to pay the full 15.3% which is referred to as the self-employment tax. You calculate this when you file your return.
If your employer has classified you as an independent contractor and you believe you should be considered an employee, you can file a Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, with the IRS and ask the IRS to make a determination as to what your worker status should be. You need to be aware that the IRS will contact your company and ask them to provide information about your job.
The IRS will review the information you provide and the information from your company and make a determination as to your correct worker status. The IRS looks at the degree of control the company has over how and when you do your job. They look at:
- Behavior – Does the company control when and how you work?
- Financial – Are the business aspects of your job controlled by the company or by you? This includes how you are paid, who provides tools and supplies and whether you are reimbursed for expenses.
- Type of relationship – Do you have a written contract? Do you have benefits such as vacation or health insurance?
All these factors are considered when the IRS makes its decision.
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