W2 and 1099 from SAME employer

[desertdr]

I am currently working as a W2 employee for a practice.  The practice recently contracted with the local hospital on my behalf to cover call for the next 12 months.  I receive 100% of that contractual salary between the practice and the hospital.

Can my practice give me a 1099 for my call salary or am I still acting in the capacity of an "employee" and thus still a W2 employee?

 

TIA

 

[childay]

Not a CPA but sounds like W2

Perhaps the hospital could pay you directly 1099?

[Josh0731]

Employers can be so inflexible, but it seems to me that if you can get the hospital to pay you directly via 1099 you could set up an LLC for yourself on the side and enjoy some tax-deferred benefits with that money.  I can't think of a benefit to your employer giving you a 1099 on the side...  The problem is I wound anticipate many employers would not want you to have such an arrangement.  I know my own contract specifies that my employer is entitled to all of my professional fees, aka the money flows through them no matter what source it came from.

[jfoxcpacfp]

desertdr wrote:

Can my practice give me a 1099 for my call salary or am I still acting in the capacity of an “employee” and thus still a W2 employee?

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If your practice were to be audited, the 1099 income would almost certainly be reclassified to W2. That's unlikely, however, unless you report them to the IRS, which might be hazardous to your wealth.

Josh0731 wrote:

I can’t think of a benefit to your employer giving you a 1099 on the side…  The problem is I wound anticipate many employers would not want you to have such an arrangement.

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The benefit is that the employer saves on Medicare and (for lower-paid employees) SS taxes and workmen's comp along with employee benefits and any other employee-related taxes such as unemployment. In the case of desertdr, may not apply but, in general, business owners have an incentive to classify workers as 1099 rather than employees.