Legal Question in Tax Law in Ohio

Employer Tax Laws

Is it legal for an employer to call an employee a sub contractor and issue a 1099 as opposed to a w2 when an employee is in fact not a sub contractor and has established and employee employer relationship. If an employee is getting paid an hourly wage and not a percentage of revenue with the employer getting to write off all expenses like vehicle, phone, tools while employee gets to write off nothing is it legal to call him a sub contractor hence putting the tax burden on the employee while employer evades employee taxes. Is it legal that the employee gets stuck paying a fortune in self employment tax when he wasn't self employed while the employer pays no employee taxes on the man and gets to write off all expenses.


Asked on 5/21/09, 10:13 pm

1 Answer from Attorneys
Ronald Cappuccio Ronald J. Cappuccio, J.D., LL.M.(Tax)

Re: Employer Tax Laws

The employer vs. independent contractor issue is a source of great confusion. From the facts presented there are arguments for both positions. If you are an independent contractor, there are many tax advantages. You can get automobile deductions, equioment deductions, telephone expenses, cell phone, internet, etc. It is a real advantage.

If you really want to be an employee, you should realize that the employer will lower your pay (about 75% of your current level.) You express so much anger and dissastifaction (disloyalty?) to the employer, you would be best to get a new job.

I hope this helps!

Ron Cappuccio

http://www.TaxEsq.com

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Answered on 5/21/09, 10:57 pm


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