Church musicians 1099 or W2

[tbn.al]

I just recieved an email from a church organist/choir director in Athens GA stating that they would be paying outside musicians as W2 employees rather than 1099 independent contractors for their Christmas concert this year. He says that the rules have not changed but the IRS is taking a stricter approach on enforcement and his admisitrator is convinced that it has to be done. Anyone notice any changes out there. I am of the opinion that single service musicians would always be considered independent contractors.

[Dan Schultz]

I'm not a tax lawyer.

However... I would think reporting on a W-2 would also result in the payer having to remit Social Security taxes as well as with holding payroll taxes. A 1099 seems like a much simpler way of reporting contractor pay.

The tax laws are changing and methods of reporting are going to new lengths. PayPal now requires that anyone receiving monies through them have their account linked to a Social Security number or EIN. They will be required to report via a 1099 to the IRS anytime an account breaches an income of $20,000 AND 200 transactions.

[DHMTuba]

Interesting! Our brass quintet is going through the same issue.
We just played a job at a church that has been hiring us for the past ten years. Previously they just handed us checks at the job. Since the total annual pay was under the IRS minimum they never issued 1099s to us, but it has always been an independent contractor kind of arrangement and 1099s would not have been out of place.
But -- this time around, they didn't have the checks at the job, and three days later (!) they e-mailed us that we would have to fill out W4s ( ) in order to get paid. OK, fine, if you say so, we filled them out and mailed them back. We're still waiting to be paid.
I thought it was just some confused new accounting person at this church, but maybe it's a trend?
The moral of the story - Any of you who do church work, next time you might want to confirm the pay arrangements up front even if you've worked with them before.

[tclements]

MANY of my former 1099 employers have made me a W-2 employee.

[Alex C]

omg, it is a new way to tax... all they have to do is just fudge around with the tax regs. I have not run into this yet.

Typically the IRS wording is lax, but if you want to see how "independent contractor" is defined by the IRS you can go here:
http://www.irs.gov/businesses/small/art ... 15,00.html

You won't be able to change the way you are paid but at least you'll have an informed opinion.

Sucks.

[Brian C]

As a tax practitioner, I'm not going to give out any advice, especially since I do not do any work in this area. I will say that the OP's situation is not surprising. If you are working as part of an ensemble under a choir director who is employed by the church, it seems to me that you would be correctly classified as an employee. I read a good blog post at Forbes recently about this issue. The crucial point from the blog post is that employers can successfully misclassify you as an independent contractor. But once they go W-2, they can't go back.

[Allen]

Interesting. A major distinction between independent contractors and employees is that the employee is usually furnished the tools needed to accomplish the job, and is told exactly what must be done, and the methods to be used. Those of who have day jobs outside the music field expect these kinds of working conditions.

So, you can expect your instruments to be furnished, along with sheet music, etc. Also, the employer should furnish detailed directions on how the music is to be played, and should pay for rehearsal time. And, of course, you should inquire about benefits, such as insurance, vacations and so forth. After all, the organist usually has his/her instrument furnished, and probably plays music from the church's library.

Lots of luck! Seriously, it does seem to be a trend to hire temporary or part-time people via agencies that take care of all that W2 stuff. Those of us in engineering who do truly independent contract work frequently incorporate, so doing business with the customer is a business-to-business case; the customer is hiring a corporation, not individuals.

[Homerun]

Incorporate yourself, get a DBA, or do it with your brass group, and start writing off your travel time, sheet music purchases, valve oil.....