[rocksmart]

I am currently working for a new company as a commission salesperson. We all have just been told that they will not be taking taxes out of our paychecks and we're given forms to fill out to receive a 1099 at the end of the year. We most definitely are not independent contractors as defined by the IRS. The company provides an office, training, pays for leads, tells us what time to be there and when we can leave, we cannot hire our own employees, we are not paid by the customer, the company is. They also do not pay any minimum hourly wage, just strictly commission, which I believe to be against the law also. There is nothing that we can legally deduct as business expenses as the company pays for everything including sales materials, even down to our ink pens.
I believe they just don't want to pay Social Security or workmens comp. My main question would be what recourse do we have? If I file the form SS-8 and it is proven that we are employees, does the company have to cough up the taxes or are we still liable for all of the taxes including all social security?

[twinkiedooter]

Traditionally salespersons who work on commissions are given 1099 forms. If the company pays for everything they can still claim you are independent contractors.

If you don't like that arrangement I would suggest that you stop being a commission only salesperson and get into another line of employment as commission salespeople always get 1099's.

[rocksmart]

I have been in commission sales for over ten years in the vacation industry and I have always had taxes taken out. I have never been given a 1099 until I started for this company.
We are definitely not independent contractors. I am very good at my job, and jobs are hard to come by at this time. I obviously realize that if I don't like it I can leave. That answer was not helpful.

[twinkiedooter]

Well, if you do decide to force the company to take out taxes you just might end up not having a job.

Have you asked them to take out taxes for you?

I have never heard of a person who only gets paid commission ever having taxes taken out of their pay.

[MukatA]

If you find that the employer is wrongly classifying you as a contractor instead of a regular employee, file Form SS-8 with the IRS. Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. Firms and workers file Form SS-8 to request a determination of the status of a worker for purposes of federal employment taxes and income tax withholding.

But before you file SS-8, you should understand the advantages and disadvantages of working as independent contractor.
On 1099-misc, you will pay 15.3% SE tax instead of 7.65% withheld from W2 income. Thus you pay about 7.5% more. The advantage of getting 1099-misc is that you can directly deduct your business related expenses on schedule C or C-EZ. On W2, you can take business related expenses only as itemized deduction. W2 vs 1099-Misc income Your U.S. Tax Return: W2 vs 1099-Misc: Employee vs Independent Contractor.

[AtlantaTaxExpert]

Further, as I have noted today on a separate post, filing Form SS-8 is, In my opinion, a guaranteed, fool-proof method of getting fired, because you will subjecting your employer to scrutiny from the IRS, and there is NO WAY that employer is NOT going to find out who sicced the IRS on them.

Is your employer breaking the law? Perhaps! But you need to decide whether it is worth LOSING the job in order to turn in your employer and find out for sure.

BTW, most of my clients who are commissioned sale persons ARE paid under a Form 1099-MISC.