Discussion:W-2 Employee and Formal Offices
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Discussion Forum Index --> Basic Tax Questions --> W-2 Employee and Formal Offices
Discussion Forum Index --> Tax Questions --> W-2 Employee and Formal Offices
| 27 January 2010 | |
| Twist on the old insurance agent deal.
Client is an employee of MetLife. Receives a W-2. There is a base office where after a few years, certain amounts are deducted from their paycheck for certain expenses. Two of the agents in the base office have decided to open additional office sites in two nearby towns where they service their clients. They are paying all expenses associated with these offices out of pocket. I am assuming that these expenses would go on Sch A unreimbursed expenses. Just looking for confirmation or a tweak saying "no ya big dummy, do it this way" or a point towards the direction I should be looking. Thanks | |
| 27 January 2010 | |
| Kind of what I figured. But I wanted to ask just in case. | |
Wonder Woman USA (talk|edits) said: | 27 January 2010 |
| Insurance agents are often statutory employees, and many have non-employee compensation from companies other than the one who gives them a W-2, so expenses may have to be allocated between Schedule A and Schedule C. | |
| 27 January 2010 | |
| In this case, entirely employees of MetLife. No 1099's. No Schedule C. | |
| 27 January 2010 | |
| If box 13 of their W-2 is marked Statutory Employee they will file Schedule C. | |
| 27 January 2010 | |
| Be sure the Statutory on his W-2 isn't checked, as I have an employee of a MetLife Company who's W-2 shows statutory which allows the use of Scedule C for those expenses rather than Sch A. | |
| 27 January 2010 | |
| Box 13 is not checked as a statutory employee. But, if going forward we could have it done that way, then that might be beneficial.
Never had a client who was a stat employee before. How would the social security issue be handled? I would assume that there would be no SE tax for income up to the amount of his Soc Sec wages. | |
| 27 January 2010 | |
| Certain types of positions are statutory employees. The person receives a W-2 and files a sched c. The box on the W-2 w/b marked if done correctly. Maybe your client should check with the p/r dept or hr dept. | |
| 29 January 2010 | |
| I was just reading up on the statutory employee situations. Have never come across the situation before actually. I've had insurance people, but they were State Farm agents who owned their company.
Is there some place that summarizes all the criteria. I've read through some of the posts and through some of the law and I'm still fuzzy. Like this for instance - It specifically discusses life insurance salespeople, but what do they mean below by the not having substantial investment in the equipment or facility? Is that the sum total of what is required to define a stat employee? By spending their own money to open their own offices, does that eliminate the substantial investment issue? The lights just not clicking on for this one. | |
| 2 February 2010 | |
| Update - Client called MetLife office to ask about it. He was told that he has not been there long enough. That in October he can call back and they would probably let him be a statutory employee at this time.
This just doesn't sound right. Shouldn't you either be one or not be one? At the very least, it should have nothing to do with length of employment . Either way, we are putting on Sch A as client does not wish to make waves over this. | |
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| 2 February 2010 | |
| I have a life insurance license and earn an occasional commission in the PFP and Estate planning portion of my practice. Most life insurance agents, the box on my W-2 for Statutory Employee is checked. I can't imagine that the payer omitted the check if your client qualifies as a stat employee, but its worth a inquiry. If so, the income and expenses are reported on sched C and the SE tax is adjusted for amounts withheld. | |
| 2 February 2010 | |
| DWA - he did call the MetLife home office and they indicated it was due to his length of employment. The other guy in his office has the box checked. They both went half on costs to open up two satellite offices and he has approximately $12,000 in additional expenses that we ran through the Sch A even though he prob could be a stat ee. 2% floor was $1500, he didn't wish to make waves with the company. Told me just go with Sch A. He'll get it fixed for 2010. | |
Tax Writer (talk|edits) said: | 3 February 2010 |
| Yes, life insurance agents are usually statutory employees and can claim their business expenses on Schedule C. But the employer has to make the election-- the IRS will disallow the Schedule C deductions if the "statutory employee" box isn't checked.
Tax Writer | |
