Dental Temping - Tax Question?

Question

My wife works for a dental staffing service. Meaning, she could work for 1 to 5 dentists in the same week. She fills out time cards and sends them to the staffing service. However, she is paid directly by the dentist each day. When she is paid, it is always via check. Not every dentist takes taxes out. Those that do ask her to fill out a W-4. She asked the staffing service about taxes and they said not all dentists pay them or claim them. A couple of questions:

1) We want to pay our taxes as we should. However, if we pay our taxes (some through deductions and others through putting money aside) won't the government catch up to these dentists? They aren't paying social security or anything on behalf of my wife.

2) Should we be claiming this salary?

Answer 1

YES, you should claim monies paid.

Some DDS are treating her as employee, some are treating her as independent contractor.  At tax time she will receive several W-2s and several 1099s (depending on dollar amounts whether they have to file them).  Case could be made for both treatments.  Doesn't matter to you whether DDS are right or wrong, you must report the income, and this means she's self-employed, files a schedule C, and should be keeping good records of expenses to offset some of the income (reducing taxes owed). READ up on it NOW.

Answer 2

There is a form, SS8, that you or the dentist can file to determnine if you are an employee. It is possible that your wife could actually be considered an employee of some of the dentists and an independent contractor of others. I could be complicated.

Things the IRS looks at are 1. control. Who says when and how she does the job. If the employer requires you to be in the office 9-5 and do the whatever in a certain way, that indicates control. If the employer just hands you the form and you schedule it on your own time, that is less control.

2. Who's equipment does she use?

3. Does the employer "treat" her as an employee, time off, paid vacation time, paid sick time, etc. or an independent contractor.

4. Does she do this for only one person, or many?

It isn't an easy question, even if one does have all the facts.

Oh, and yes, you need to keep track of the money paid you. The dentists paying you as independent contractors will give you a 1099-misc (unless this is a minimal amount). You claim the income on Sch-C for your 1040. You have an opportunity to claim expenses (car, office supply, etc.) so keep those records, too.

Answer 3

Second question first:  yes, legally you are required to claim all of the income.

First question:  no, if you just file a return and claim the amounts where they didn't take taxes or issue W-2's, the IRS won't catch up to the dentists - you don't show on your schedule C who the income came from.  

But for what you didn't exactly ask - yes of course it's illegal for the ones who don't take out taxes.  She can file form SS-8 and ask for a determination of her status - that way she wouldn't have to pay the extra tax that they have evaded.