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Employee Compensation question

Guest Lesko

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I am new and am unclear on where to post a question like this.

I am an employee of a very small company. There are 2 people in the company and I am the employee. I get a W-2. We are a web services company. The company has been around for 12 years or so and I have been a part-time and then full-time employee for about 9 years. I have been full-time for 7 years.

During this time I have never received a salary increase, except for when I went full-time. There are no benefits whatsoever. The good thing about working for said company is the very flexible schedule provided. In the past few years, while I keep track of vacation and sick time myself, there seems to be no set limits. I take very little time off so I suppose it's not an issue. But the flexibility is good. I do work evenings and weekends sometimes to keep up with work and I consider myself more than an employee. My boss and I have become friends over the years, albeit not "best" friends. She does work for other clients on her own, too.

I would like more compensation. I responded to a posting looking for programming expertise. I landed the contract worth several thousand dollars. I could have taken on this client on a 1099 basis but chose not to do that and shared the opportunity with my boss with the stipulation that I would have 50% of the profit realized from this client. My boss agreed. However, now my boss seems to be backpedaling on this and has stated that would rather give me a bonus of some sort. I am told the problem is a book-keeping one and since the hours worked on this contract per month are variable, it's difficult for boss to figure out. Boss has payroll company and bookkeeper. Other business my come from this new client and I would like a piece of the action for that, too.

Incidentally, we have only one other major client. I do the lion's share of work for that client and all the work for new client, plus anything else asked of me. I usually work out of my home office but are now going to the city for major client 3 days a week. I am receiving no extra compensation for that except parking allotment.

My question was going to be this: Can I receive a W-2 AND 1099 from my boss, segregating the 1099 work for this new client. But now I think the answer to this is 'no'. I could have received a 1099 from the new client only.

Any comments would be welcome on how to handle this.


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I think the answer is "maybe, but probably not." I'm not an accountant so I'm not sure what this is worth, but my understanding is that a company could have both an employee (W-2) and contractor (1099) relationship with an individual, if the individual performs different roles that are well-defined. So, you might work as a janitor on an hourly/W-2 basis, but also contract for a programming job which pays by the job and in which you have lots of flexibility in how the job is done, where, etc.

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In my old job, I got paid on a W-2 and our bonus was paid on a 1099.

Should we assume that is the reason it's your "old" job?

I don't know why they did it that way. Actually, it sucked, b/c there was no taxes taken out of the bonuses, and I had to take a hit come tax time.

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