Contract Instructor
 

Hey everyone. I had a question or two about being a contract instructor. I'm supposed to be a contracted instructor at the airport I work at. Rather than point out a name of who it is I'll just call the business "FBO." The thing is, I've heard that if you have to buy your own "FBO" logo'd clothing (especially if you are required to wear it) you aren't contract. Also I've read that if your student pays "FBO" then you get paid from "FBO" (after they take their $25 cut) then that's another good sign that you aren't contract. I also have a boss or two. Doesn't sound very contract to me. I also signed a paper when I was hired that said I'll take care of my own Social Security/Workmans Comp./ State and Federal taxes. So I called my boss to ask about these things and he said I'm a 1099. The boss also said that I can make more money this way as long as I stay on top of things and put something aside for April. I don't know taxes too well yet, seeing as I'm only 21 and haven't filed more than 2 or 3 of my own returns. So help me out guys and girls, does this sound fishy to anyone? I'm going to an H&R Block to seek some help soon, but until then does anyone have their 2 cents to throw in?

P.S. I'll let you all know the details from the H&R Block people because I'm sure I'm not the only one questioning this.

My old flight school took care of W-2's etc, so I wasn't a 1099 employee in that sense, but we could technically be considered contract because if you're "Full-Time" then you go into the realms of disability etc... So yes, you're contract, I think it's BS you have to buy the clothing, but some places do that. All depends on what you think you're worth, etc..

This might be a good post for the Av. Law forum as well, but here's the way it was explained to me. It depends on who "directs" you. Does the FBO set a cirriculum and expect you to follow it? Do they assign your students? Do your students pay the FBO?

In your case, it sounds like this is true, and from my understanding, that would point to you being a non-contract employee. Your employer should be doing a W-2 instead of a 1099.

This is also bad from a liability standpoint... it exposes the "contract" CFI to more liability than if they were one who was an employee of the FBO. Sounds to me like your employer is doing something a bit shady.

Ya when I called the boss he said that it saves him money somehow and that the CFI's that work for him actually make more money in the long run as well. Either way the IRS and uncle sam are going to get their fair share and then some when April comes around. I guess I just have to stay on top of things and put some money aside or do the quarterly payment thing. It almost sounds easier to just find a new job where they aren't afraid to call me an employee and cover my butt in an accident. I love the CFI gig but I have honestly only found one problem with it. Liability. And lots of it.

It's bs. His insurance is cheaper, and he doesn't have to make employer contributions. Also, your butt is hanging out there for liability and legal expenses if something bad happens. With this industry and the legal system we have, the risk is very, very big.

Another user posted a very similar question. Please look this over and if it is not on point to your question, feel free to ask with more specificity.

http://www.airlinepilotforums.com/mo...cfi-taxes.html

I found a link to the IRS website that helps a bit. Just Google "contract employee taxes" and the IRS link should be the first one to pop up. It seems that first you have to determine if you are an independent contractor, an employee (common-law), a statutory employee, or a statutory nonemployee.

A few paragraphs down it actually says that an employer can be held liable for "Misclassification of Employees" and therefore may be "held liable for employment taxes for that worker."

The only problem I found is that an instructor can be called a statutory nonemployee if... "Their services are performed under a written contract providing that they will not be treated as employees for Federal tax purposes." And I signed that contract. Lovely.

Yeah... you're getting shafted by your boss.

I had a chance to look up the legal term now that I'm home from work. Google "Right to control and direct". That should get you pointed in the right direction. If the company has the right to "control and direct" then you are not a contractor.

But then again where am I going to get any other job being a standard CFI with around 600 TT and only 2 of those ME. I've heard of paying my dues but this is some shady business if you ask me. Oh boy I'm going to shut up before I say too much haha

Oh well, I do know that at least the uniforms are tax deductible.......