USA Accounting firm employee and Self employed?


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Hi,
If you work in an accounting firm as an employee AND have your own accounting business as a self-employed or LLC owner and so on,

You don't tell your boss in the firm about your own business? You secretly conduct the business?
or
You disclose your business with the firm and sometimes they give some projects to you as a contractor? In this case my question is can you be an employee and a contractor for a same employer?

Thanks in advance!!
 
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Hello Nancy M

For the first question about keeping a secret - not advisable. It always gets revealed then you look bad and could get let go.

For the second, yes, you can be an employee and a contractor for the same firm. but if the work is similar the tax authorities could have a problem with your employer, thinking employer is evading payroll taxes. If not similar - like you work as a w2 accountant and a 1099 wall painter - much less of a problem.

Kat
 
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Werner Reisacher

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Totally agree with Kat. She actually puts it very mildly.
Most Accounting firms have employees sign, as an integrated part of the employment agreement, an NDA (non-disclosure agreement), and a non-compete agreement. Company policies and procedure manuals must include a clause about ethical conduct. Confidentiality treatment, ethical conduct, and privacy law protection are all issues covered in those manuals. In addition, the IRS publishes its rules and regulations that are binding legal obligations for tax filers regarding their handling of customer's confidentiality and privacy information. Tax files must be kept under lock and key at all times.
If I would find out that any of my employees run secretly their own business - possibly even competing with me - I would fire him/her for cause immediately. It does not get any more unethical and is in total breach of any confidence I can have in that person.
Everybody is free to make his own decision. Either you are an employee or you are an employer. Nobody is physically and/or mentally able to be both simultaneously - without cheating.
As Kat mentioned, L/I would probably be another issue that prevents this situation in the first place, depending on the State's jurisdiction under which you are operating. In my State, no company can hire somebody who's services are identical to the core business of the employer as a Contractor. No painting firm can hire painters as contractors, they are working in the same line of business and are consequently employees.
 

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