Employees or Independent Contractors: Are MLMers?
Our economy was booming at this time last year. We heard about bonuses and promotions rather than layoffs and bankruptcy. However, determining whether you earned money as an employee or as an independent contractor has taken on a whole new meaning in Tax Year 2000 and beyond. The combination of workforce layoffs, the exponential growth of home-based businesses, the industry's increasing reliance on temporary and contract workers, and the insecurity of "traditional employees" has resulted in a greater number of us becoming entrepreneurs and contract workers than ever before. While there are many other types of home-based companies, this article concentrates on one of them-multilevel marketing schemes. While considerable attention has been placed on some of these companies' legally dubious marketing tactics, we hear less about a far more significant issue confronting everyone involved in an MLM at tax time—MLM associates' job categorization or "status" whe...