Subject: Independent Contractor

[Kate Hoffman]

i know this is a topic that has received some attention, and i'm bringing it up Again.

i want you to know that i understand what you have been dealing with.

i also sincerely believe that it's a thing more easily resolved than initially thought.

harking back to what i 'used to be'........ an independent contractor in aerospace:

i went on job assignments around the country. my job-shop which placed me on those assignmenets handled the taxes. ie., they were paid for my skills by the company i was assigned to..and out of that they deducted all taxation and their placement fee....i received the remainder (some of you entreprenerial folks will be getting some ideas out of that paragraph......they work, and they're an established fact).

i also went on Independent Assignments (not through a head-hunter's shop...more like Free-Lance work). And I was required to do the quarterly estimation thingie. i had no problem with that. my 'employer' had no problem with that....and they were a large aerospace firm.

it's also similar to being a high-tech temp. (may be easier to imagine that way) and remember the Free-Lance applicability.

in both of the above assignment types the contracting company furnished the desk, the computer, all resources.... the whole nine yards that's available to any employee in their company organizations/departments necessary to accomplish the needed end product.

in both of the above scenarios i (all contractors) had to learn the all of the new company's forms and their specific way of doing things....ie....we were in an initial learning stage. AND, learning their specific rules and regs as applicable to their product.

i do Not see a difference in that being fully applicable to the Appraisal Industry.

i do not believe that i/anyone-else have/has to be a full-up employee for state and federal taxation, s/s, and that workman's comp thing in small or larger offices.

yes, i've read the list of items: if you can answer 'yes' to any one of the following... you are an employee.

i firmly believe that even as an apprentice, i'll be functioning in more of a 'free-lance' real-world-capacity, than as a direct-employee.

as i've written this, i've requested input from two persons who function in the taxation world.

any of you that have dealt with this...... including those who are knowlegeable in taxation re: job-shop contractor; independent contractor; free-lance individuals....vrs direct employees........your input would be appreciated.



every problem presents it's own solution. it's rarely as complex as initially presumed.


alrighty!!! i just talked with my tax-guy. he says that this all evolved because of some ppl getting upset over having to pay the 15% of s/s when they were contractors. egads.

that the above is perfectly legal when it's fully agreed upon between me and the individual/shop that i'd be working with/for. ie., i can legally be an independent contractor.... free-lance appraiser. yes, even as an apprentice.

why? because i fully accept responsibility for myself. and i fully understand the contracting world. ie., been there done that for years and years. piece-a-cake.

kate

 

[Terrel L. Shields]

Back in my former life as a petroleum geologist, I worked for a company who paid everyone (trainee's included) as subcontractors. They got busted by the IRS and could not meet their financials for about 3 months. The fine alone was $50,000.

The IRS explicitly said that someone who is being trained cannot be a subcontractor, period. A subcontractor must be able to sell their services to anyone, and/or have a term contract [i.e.- the employer cannot require the sub to not work for someone else, nor have a non-compete clause in the contract, except it be within a written contract] Subs could utilize the employers equipment, but vehicles were not considered equipment and providing one required a reimbursment to the employer. At least, this company charged us 25 cents a mile to use their vehicles after the unpleasantness w/ IRS.

Appraisers are treated differently from Real Estate Sales, because they are commission driven.

 

[Wally Jones]

In our state, a trainee appraiser cannot work for more than one appraisal company. An independent contractor can solicit business from as many companies as they want. A trainee appraiser cannot, by definition, be an independent contractor.

If this is an important issue for you, I urge you to seek advice from an attorney well versed in real estate and contract law.

Please go here: http://www.appraisaltoday.com/appraise.htm#ICs

Ann O'Rourke's article on independent contractors has some good information.

Get as much good, current legal advice as you can before you make what could be a very expensive mistake.

Good luck.

 

[Kate Hoffman]

thank-you, terrel and wally......

yes, i read ann's article. and, i can see there's been much misperception amongst many for numerous years.

from what you've said, and what ann's article says....... in my current 'registered'/apprentice stature, i must be an employee, as pertains to appraisers.

that is an extreme hardship on small and one person shops.

or...........

does the workman's comp law, and the unemployment regulations apply only when there's a specific number of employees attained by said shop? hence, a one man/woman shop..... taking on one trainee/apprentice.


in my other life i'd been an independent contractor for so many years, that i automatically think in 'independent' terms and to be cognizant of my responsibilities. apparently, i could then function independently (albiet remaining with said shop) after attaining my license (2000 hrs). therefore, my tenure with an office/shop as an employee would be for the initial period.... after which i would then be able to shoulder that financial responsibility, rather than it resting on my mentor/supervisor.

i don't want my future mentor/supervisor to be dealing with any unnecessary bookkeeping because s/he's choosen to take me under their wing. and i need to understand the full scope.


those who are knowledgeable in the specifics in minnesota ..... please give a hand here. or, how do I get the minnesota info?

thank you all so much for your thoughts, help, and advice.

kate

 

[Mike Simpson]

Kate-

I know what you're saying...we studied this topic in our College Accounting classes.

BUT--does anybody really feel like an independent when they're told how much they'll make & when the product is due? What equipment & software you'll use, and when to upgrade?

YOU BETTER GET BACK TO WORK IF YOU LIKE YOUR JOB!

-Mike

 

[Kate Hoffman]

ahhh, mike........ yes, i knew exactly how much i'd be making when i accepted an 'assignment' to function in a company. including X expenditures.....and, deductions.

within said company..... i was then given other assignments (just like any other employee) and was responsible for finding and identifying the problem... finding the solution....... and accomplishing the end product. (sound similar?) and, in each company, i had to learn their particular way of functioning.....along with my own entrenched code of ethics. those ethics are the same as applies to appraisal.

no one is really independent.... unless they own the company. and Even Then, they are reporting to others. we typically refer to those others as the state and the feds. so even independent shops, companies....... aren't totally independent.

... when i worked 'for'...... it was more of a working 'with'. it's a perspective thing.


kate

 

[Mike Simpson]

"...no one is really independent.... unless they own the company. and Even Then, they are reporting to others."

I know what ya mean. My wife's 51% share holder in our company...doesn't have an appraiser's license, but she's so BOSSY!

-Mike

 

[Kate Hoffman]

am soooooo *laughing out loud* ! ! !

the puppies came runnin to see what mom was doin!!!! all kindza tails are awag here right now.....

wal....... 'ceptin mom's........ of course........*grin*

 

[NC Old Guy]

Unemployment compensation--one employee. Doesnt' matter if adult son where state would never pay off even if "fired". Just worked off a 5 year look back on that for the state & still waiting for the federal shoe to drop. Workman's comp = 2 employees. Thank goodness we only had "one".

 

[Scott Kibler]

Originally posted by Mike Simpson@Feb 23 2004, 11:47 AM
"...no one is really independent.... unless they own the company. and Even Then, they are reporting to others."

I know what ya mean. My wife's 51% share holder in our company...doesn't have an appraiser's license, but she's so BOSSY!

-Mike

Mike,

Same here. And getting a paycheck out of her is like pulling teeth!