Your new employer can be held liable for employment taxes, plus interest and penalties, if a worker, you, is incorrectly classified as an independent contractor

Your new employer can be held liable for employment taxes, plus interest and penalties, if a worker, you, is incorrectly classified as an independent contractor and paid via your LLC. The penalties can be reasonably high. The IRS definition is here: http://www.irs.gov/businesses/small/article/0,,id=99921,00.html http://www.irs.gov/businesses/small/article/0,,id=99921,00.h... There will also be a state definition to consider. The one year period isn't a rule but more of a generally accepted guideline. You can get around most of these in your contract with the hiring company and your LLC, but again will need their cooperation to properly structure the relationship to minimize their risk of losing an audit. It's really a bunch of hoops for them to jump through to get you on-board. If it were my company, it would be unlikely that I would go through the effort unless you were a key man.