r/IRS•
cloudsorblueskies

Should I file a SS-8 with the IRS?

Tax Question

I believe I have been misclassified as an independent contractor, when I should be an employee.

(This post is very long and I am sorry.)

The facts: I am a Medication Technician working for a small healthcare agency, which also employs CNAs and one LPN. I give the boss lady my availability and she schedules me for shifts - I work the same day/times every week, in the same unit. I receive hourly pay and am paid weekly, and taxes are not taken out of my checks. I do not receive any benefits or PTO, etc. Some of us work full time, some part time, some more than full time. Generally everyone is able to work as often as they want, since the facility is so short-staffed all the time. We all received 1099-NECs, not W-2s, are classified as "self-employed," and now owe thousands in extra taxes. I was anticipating paying taxes this April, but I was not expecting to owe over twice as much as if I were an "employee."

For context: This company is extremely new, and I was one of the first (maybe) employees. The staffing agency has only one facility contract, and all of us work there (2-3 dozen). We all wear name tags with the agency name on it, we clock in and out on a payroll app with the agency, and we sometimes have meetings as an agency. We do the same work as facility staff members.

The question: Many of us employees (or independent contractors, as she says) are upset and frustrated by the tax bills we are receiving. When I was hired last year, I knew that I wasn't filling out the same documents as I was used to, and I was told she wouldn't be taking tax out of our checks. But none of us were prepared for the reality and the implications on our taxes were not discussed with us at hiring. I have been doing some research now, and I know I can file an SS-8 to get an answer on this. I just really don't want to do that if I am probably correctly classified as a contractor. I feel like I'm not, but I mean, what do I know about employment law. The boss lady is very nice, we all like working for her, and I don't want to ruin her trust in me by filing the form, or destroy her business if we are determined to be employees, because she would have to pay back taxes for all of us. I also don't think I should have to pay almost $3,000 just to do her a favor.

The repercussions: I took this job for good pay, good experience, and to get a good recommendation letter when I become an RN. Now the pay is not as good as it seemed, and I'm afraid that bringing up my concerns will ruin my chances of a good recommendation, and possibly get me fired. If I am truly a contractor as per the IRS, I will perhaps ruin my relationship with this company. If I should be named an employee, I will save money on taxes, but probably destroy a small business AND ruin my relationship with the company. Will my coworkers and I benefit from my filing a SS-8? Or am I misunderstanding and just need to pay my taxes and move on?

Posted Apr 3, 2023, 7:14 AM UTC

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