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    archerfish's Avatar
    archerfish Posts: 2, Reputation: 1
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    #1

    Jun 19, 2009, 01:50 AM
    1099 Contractor or W-2 Employee
    I am an Independent Insurance Agent. I am considering finding a telemarketer (stay at home mom or college student) to set my appointments. I will not be offering any type of benefits and the pay will be based on the appointments set. At the end of the week I would provide the person with my leads and they would set my appointments for the next week. There would be a basic contract that states what is expected and compensation.

    Would I classify this person as a 1099 Contractor or a W-2 Employee?

    Also on this same subject. I am considering doing something along the same thing with my spouse. She would review all the applications for completeness and send them to the company. She would also maintain the books for my business.

    Thank you in advance for any information.
    Lisa K's Avatar
    Lisa K Posts: 1, Reputation: 1
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    #2

    Jun 19, 2009, 06:29 AM
    The IRS website is a good place to start with questions like this. There are prescribed rules to follow when determining if someone is an employee or a consultant. Check out "Tax Topics: Independent Contractor vs. Employee" on the IRS site here: Tax Topics - Topic 762 Independent Contractor vs. Employee

    MBO Partners (the company I work for) also has a lot of resources pulled together to help client companies (which you would be in this case) make such determinations.

    You can find the resource and research at MBO Partners Compliance Research | Labor Law | Best Practices.


    I hope that helps!
    Five Rings's Avatar
    Five Rings Posts: 459, Reputation: 7
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    #3

    Jun 19, 2009, 08:13 AM

    It appears to me that they would be your employees.

    See: http://www.irs.gov/pub/irs-pdf/p15a.pdf
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #4

    Jun 19, 2009, 09:32 AM
    Your wife would, In my opinion, be your employee, if only in name! :-)

    The telemarketer could be considered an independent contractor based on the fact you do NOT closely supervise his/her work and because you are working through a contract.
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