Got milk ... (delivery drivers) ?
Here at Numbers in Boxes we’re studying up on the tax code and it’s pretty funny. No, really! Take for example the section on who is and who not considered an employee when payments are made in exchange for services.
First, you have your independent contractors. These are folks who are self-employed and offer their services to the public. As helpful examples, the IRS lists lawyers, doctors, dentists, and auctioneers. Oh, good. I’ve definitely been kept up late at night worrying about auctioneers and their taxes and now I finally have clarity. Thanks, IRS!
But it gets better. An individual is an independent contractor if the person for whom the individual performs the services has the right to control only the result of the work, not the means and methods. If the right to control result, means and methods is in play, then…tada!…you have yourself a “common-law employee.” Independent contractors do not have taxes withheld, whereas common law employees generally have income, medicare and social security tax withheld.
Here’s the fun part. There is yet a third category of peeps who perform services who are not considered common-law employees under the prior definition (the whole results/means/methods bit) — and as such do not have federal income tax withheld - but they are considered employees for social security / medicare / federal unemployment tax purposes. Why? How? Because they’re statutory employees, and this is applicable in very precise circumstances such as:
a full-time life insurance agent who sells primarily for one life-insurance company
a home worker who works by guidelines for the person for whom the work is done
a full-time traveling or city salesperson (with various limitations)
and, our all time favorite:
a delivery driver who delivers food, laundry, dry cleaning and beverages. But not milk.
This always makes me think of the fantastic “Blessed are the Cheesemakers” scene from Life of Brian (you’ve all seen it, right?) where someone incredulously asks what’s so special about the cheesemakers and the reply is, “Well obviously it’s not meant to be taken literally, it refers to any manufacturers of dairy products.” This random bit of tax code is just like that scene from the film, except (a) the IRS likes to be taken very, very literally so here we really are just talking about the milkman, and (b) the tax code isn’t trying to be funny. But it sure is succeeding!
Seriously, if anyone knows how the milk lobby wormed their way into the statutory employee convo, can you let us know? Also, does anyone still get their milk delivered? We’d like to know that, too!
