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Topic: Freelance Client Wants Me to Fill Out W-4?
| Author | Message |
| nancy_drew | Posted – 10/24/2007 9:26:21 PM | show profile I have a new freelance client who wants me to fill out a W-4 and a number of other employment-related forms (including a mandatory retirement plan payroll deduction) before I start working for them. Has anyone ever dealt with a situation like this before? I'll be copyediting reports and articles on a project basis for this client (a public university). I have a full-time job, and just freelance in my spare time. Maybe this is really a non-issue, but I'm a bit concerned about becoming an official employee. I've been in touch with the HR rep and she says a 1099 isn't an option. I like the flexibility of officially being freelance, and don't want to get involved in a potentially sticky situation. The paperwork also involves things like a "guide to political activity" that prohibits being involved in fundraising efforts for political campaigns, as well as well as restrictions involving "incompatible employment." Any advice? Am I worrying about nothing? |
| nandy | Posted – 10/24/2007 9:36:43 PM | show profile No, you are worrying about the right things. What's happened is another tightening of the definition of what a freelancer is by the IRS. One point that they are focusing on is if a person receives 100% of their income from a single vendor, then that person is a defacto employee, whether or not they work in the office, work for an hourly rate, or receive any benefits. Within the last year or two, my company had to convert several "freelance" development editors to employee status because they derive their entire income from working on several large projects for us each year. And for those that have not been "converted", we have to attach a legal document to every invoice stating that this person is a freelance vendor, and has completed and filed an affidavit to that effect. What I would do, if I were you, would be to suggest they have you fill out and sign a similar affidavit (I'm sure there must be something floating around the internet) so that you are sent a 1099. |
| dribbledrive1 | Posted – 10/24/2007 9:37:19 PM | show profile OK, so this employer wants you to classify you as an employee rather than a contracter. It is really odd, frankly, for them to do this is you are operating on an occasional contract basis. Economically, you will benefit from their paying the employer's share of the social security tax, but I would look at these mandatory deductions to determine if they change the economics. As far as the paperwork, are they asking you to sign a pledge about "incompatible employment" or just giving it to you. If they are just handling you their policies, I'd ignore them personally. I doubt it will become sticky -- this is just an occasional gig for you, and you can always quit. |
| Marie | Posted – 10/24/2007 10:18:30 PM | show profile I've been in this situation, but I was working in the company's office, even though part-time. If I worked at home now and then for these clients, it was my choice. They did provide an office, an e-mail and a phone. Theoretically, you will lose tax deductions like the home office and everything else freelancers deduct, because you're not technically a freelancer but a temporary, part-time employee. These distinctions are important. Frankly, I made the relevant deductions anyway. That said, there are some advantages to this arrangement. In my case, it gave me a retirement account at one place, and when the job ended I could collect unemployment, because I'd been an employee. In one case the work ended because of a companywide layoff, and I even got severance, because on paper I was an employee, not a freelancer. It's not all bad, but I'm not sure it's a correct iarrangement n your case if you're not working in their offices. |
| westsidestory | Posted – 10/24/2007 10:23:39 PM | show profile Tell them what is appropriate is a 1099 -- and that if they are offering you a job, you already have one. The tightening of regs is certainly true - but you may point out to HR that since you actually HAVE a full time job, you can't become their employee. The rest of the documentation - including the "guide to political activity" and "incompatible employment" should not be signed, period. I think you're just dealing with a dumb HR person. |
| dribbledrive1 | Posted – 10/24/2007 10:44:39 PM | show profile That's not true. Many people hold more than one job. --The tightening of regs is certainly true - but you may point out to HR that since you actually HAVE a full time job, you can't become their employee.-- |
| Marie | Posted – 10/25/2007 12:48:26 AM | show profile That's right--the point is you can't be an employee because you're not going into their office--you're working on your own using your own computer, phone, e-mail, even if they provide these things. In my case I got tired of arguing with the morons in HR, and just accepted the arrangement, because, there were some advantages. In addition to the ones I mentioned, you don't have to hound anyone for your pay--you'll be paid as a matter of course along with the other employees, likely through direct deposit if you want. Taxes will be taken out, but you can claim say 9 dependents if you want to see most of the money immediately. |
| nancy_drew | Posted – 10/25/2007 9:30:18 AM | show profile wow, thanks for the info everyone. i'm glad to hear i'm not fretting over nothing. i have considered the advantages of already having taxes, etc. taken out of my check. however, one thing i didn't mention is that the employer is located in another state, so i'm afraid that may add another wrinkle at tax time. (i live in ny and the job is in massachusetts.) the idea of more forms and paperwork come april is not appealing, especially since i don't think i'll be making that much money. i would really like to take on some additional clients right now, but i'm not sure this is the right one. i get the impression that these people have not really dealt with freelancers in the past, and it seems like there's a lot of bureaucracy at this place (a large, state university). i don't think i want to be the guinea pig in what i think is their experiment in using freelancers to cut costs. |
| can't say | Posted – 10/25/2007 10:12:01 AM | show profile You said that this is a public university. Are employees covered by a union? If so, these requirements might be what the university worked out with the union regarding part-time help. Just a possibility. |
