Is it possible to remain an independent 1099 contractor and work with/provide recommendations-directions to employees for an organization?

[NCW20]

Illinois is the location of the business.

Hello all,

I am wondering if it possible to remain an independent contractor while serving in the CEO/Executive Director role for a non profit if not everyone at the organization is labeled as a contractor. The organization is seeking to become a non profit as well.

My question is based off the benefits that come to the individual when filing their individual taxes. The total compensation for the year is under 50,000 if that is a factor.

 

[LdiJ]

Illinois is the location of the business.

Hello all,

I am wondering if it possible to remain an independent contractor while serving in the CEO/Executive Director role for a non profit if not everyone at the organization is labeled as a contractor. The organization is seeking to become a non profit as well.

My question is based off the benefits that come to the individual when filing their individual taxes. The total compensation for the year is under 50,000 if that is a factor.

That would be a clear cut misclassification. There is no way that a CE0/Executive Director could be classified as an independent contractor. The organization is seeking to become a non-profit, they need to do everything on the up and up. No one at the organization should be a contractor. With very few exceptions there should be only employees and volunteers.

 

[Taxing Matters]

Illinois is the location of the business.

Hello all,

I am wondering if it possible to remain an independent contractor while serving in the CEO/Executive Director role for a non profit if not everyone at the organization is labeled as a contractor. The organization is seeking to become a non profit as well.

My question is based off the benefits that come to the individual when filing their individual taxes. The total compensation for the year is under 50,000 if that is a factor.

Certainly the CEO/Executive Director is not an independent contractor. As for anyone else, whether they qualify as an independent contractor depends on what their role is with the organization, the details of the work they do for the organization, how much control the organization has over what they do, and whether they do the same or similar work for other customers. Note that whether the organization is "nonprofit" makes no difference in this at all.

Note that if the organization is planning to qualify as a tax exempt organization (nonprofit and tax exempt are not the same thing) with the IRS then it will have to be careful to ensure that no one benefits from the organization beyond reasonable compensation for the work they actually do for the organization.

No one at the organization should be a contractor.

I disagree. There are certainly situations in which it would be perfectly appropriate and reasonable to hire an independent contractor. What the organization must do, however, is ensure that that the person truly does qualify as an independent contractor.

 

[LdiJ]

Certainly the CEO/Executive Director is not an independent contractor. As for anyone else, whether they qualify as an independent contractor depends on what their role is with the organization, the details of the work they do for the organization, how much control the organization has over what they do, and whether they do the same or similar work for other customers. Note that whether the organization is "nonprofit" makes no difference in this at all.

Note that if the organization is planning to qualify as a tax exempt organization (nonprofit and tax exempt are not the same thing) with the IRS then it will have to be careful to ensure that no one benefits from the organization beyond reasonable compensation for the work they actually do for the organization.


I disagree. There are certainly situations in which it would be perfectly appropriate and reasonable to hire an independent contractor. What the organization must do, however, is ensure that that the person truly does qualify as an independent contractor.

I allowed for that in my response.