27 Mar Statutory Employee
I’ve found myself needing to specifically clarify what the definition of statutory employee means for IRS employment tax purposes. Statutory employees include:
1. full-time lifeÂ insurance agents,
2. certain agent or commission drivers,
3. traveling salespersons, and
4. certain homeworkers.
Statutory employees do not owe self employment tax on these earnings, as SocialÂ Security and Medicare taxes have alreadyÂ been withheld.Â If as a statutory employee you have both self-employment income and statutoryÂ employee income, then two Schedule CsÂ should be completed. Do not combine theseÂ amounts on one Schedule C. Gross income includes income from whateverÂ source derived including income received on a Form W-2 where Box 13 is checkedÂ as â€œStatutory employee.â€
If you are a statutory employee income fromÂ Box 1 of the W-2 is entered on Line 1 of Schedule C.