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Does this mean if you're a freelance programmer, you're at risk of running afoul of this law - as Joe Stack did - if you're trying to negotiate programming cont

by retro 17y ago

Does this mean if you're a freelance programmer, you're at risk of running afoul of this law - as Joe Stack did - if you're trying to negotiate programming contracts directly with the client rather than through an agency? My understanding is that you can protect yourself from this law by working through employment agencies as a W2 or Corp-Corp contractor? Is that correct? Is so, then perhaps the programmers I've met who said they were "independent consultants" were likely working through agencies since the risks of being truly independent are too high?

maurycy 17y ago
The article says that if you're incorporated, and the only person hired, it changes nothing.
- seiji 17y ago
  Not just the article, but the senate directly referenced such no-nos: "For example, an engineer retained by a technical services firm to provide services to a manufacturer cannot avoid the effect of this provision by organizing a corporation that he or she controls and then claiming to provide services as an employee of that corporation." http://www.synergistech.com/1706.shtml http://www.synergistech.com/1706.shtml
jhancock 17y ago
Some clients, usually larger ones, can be risk adverse to working directly with an independent contractor. Its not hard for an independent contractor to be "independent" per these tax rules. However, many clients don't want to take the risk that the contractor is doing their end right. Whether this is real or perceived risk on the part of the client is not clear to me. The bottom line is if you are an independent contractor, you should do all your work through an LLC or S/C-Corp and manage your tax filings well. Some clients may still not accept dealing with your LLC directly and hand you a list of "approved contractors" to bill through. The only way you may get in trouble past this is if all you work is for one client and the IRS feels your really acting as an employee.
- SriniK 17y ago
  On the tax side, there is W2 or 1099. When you get W2(salary), taxes are usually withheld. In case of 1099 no taxes are withheld. So, you(as the contractor or LLC owner or Corp owner) have to estimate taxes every quarter. LLC and Single person corps were treated badly 10yrs ago. Now pretty much every state recognizes LLCs/S-Corps and yes, one can be owner and single employee.
- tedunangst 17y ago
  nit: It's risk averse. A risk can have adverse effects, though.
jfager 17y ago
I understand it to be the opposite: if you're drumming up your own business, you should be fine, but if you're getting work from an intermediary, you have to be treated as an employee of that intermediary for tax purposes. IANAL, and I could be completely wrong on that; anybody who knows better, please correct me. EDIT: nevermind me, read grellas comment.
lsc 17y ago
or they are individuals with a high risk tolerance.

by retro 17y ago

maurycy 17y ago

The article says that if you're incorporated, and the only person hired, it changes nothing.

seiji 17y ago
Not just the article, but the senate directly referenced such no-nos: "For example, an engineer retained by a technical services firm to provide services to a manufacturer cannot avoid the effect of this provision by organizing a corporation that he or she controls and then claiming to provide services as an employee of that corporation." http://www.synergistech.com/1706.shtml http://www.synergistech.com/1706.shtml

jhancock 17y ago

Some clients, usually larger ones, can be risk adverse to working directly with an independent contractor. Its not hard for an independent contractor to be "independent" per these tax rules. However, many clients don't want to take the risk that the contractor is doing their end right. Whether this is real or perceived risk on the part of the client is not clear to me. The bottom line is if you are an independent contractor, you should do all your work through an LLC or S/C-Corp and manage your tax filings well. Some clients may still not accept dealing with your LLC directly and hand you a list of "approved contractors" to bill through. The only way you may get in trouble past this is if all you work is for one client and the IRS feels your really acting as an employee.

SriniK 17y ago
On the tax side, there is W2 or 1099. When you get W2(salary), taxes are usually withheld. In case of 1099 no taxes are withheld. So, you(as the contractor or LLC owner or Corp owner) have to estimate taxes every quarter. LLC and Single person corps were treated badly 10yrs ago. Now pretty much every state recognizes LLCs/S-Corps and yes, one can be owner and single employee.
tedunangst 17y ago
nit: It's risk averse. A risk can have adverse effects, though.

jfager 17y ago

I understand it to be the opposite: if you're drumming up your own business, you should be fine, but if you're getting work from an intermediary, you have to be treated as an employee of that intermediary for tax purposes. IANAL, and I could be completely wrong on that; anybody who knows better, please correct me. EDIT: nevermind me, read grellas comment.

lsc 17y ago

or they are individuals with a high risk tolerance.