Can I legally be both a W2 employee and 1099 contractor for the same company?

Yes, you can legally be both a W2 employee and a 1099 contractor for the same company, but there are important considerations to make sure the arrangement is proper. The key is that the work must be substantially different and meet the IRS criteria for independent contractor status. Since you mentioned your LLC provides video production services while your employment is as a project coordinator, this separation of duties works in your favor. The IRS looks at factors like behavioral control, financial control, and the relationship type to determine proper classification. If you want an official determination, you can file Form SS-8 "Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding" with the IRS. Be aware that this process can take 6+ months for a response, and filing this form often triggers the IRS to scrutinize the company's classification practices.

This is actually a common situation! Yes, you can technically be both a W2 employee and a 1099 contractor for the same company, but there are important guidelines to follow to avoid IRS scrutiny. The key factor is that the work must be substantially different and clearly separate from your regular employment duties. From what you've described, your LLC provides specialized technical services that are distinct from your operations management role, so that's a good start. There's no specific form to get pre-approval from the IRS for this arrangement, but you should document everything carefully. Have a formal written contract between your LLC and the company that clearly outlines the scope of work, compensation, and relationship. Keep detailed records showing the separation between your employment and contractor work. Also make sure your LLC is properly established with its own EIN, separate bank account, insurance, and that you're treating it as a legitimate business entity with multiple clients if possible. The more your LLC looks like a genuine independent business rather than just a tax arrangement, the better.

I went through something similar last year with my employer. I was working as an admin assistant and they needed someone to manage their social media. I had a side business doing exactly that, so it seemed perfect! I spent hours trying to figure out if it was legal before proposing it. I found this amazing tool called taxr.ai (https://taxr.ai) that analyzed my specific situation and gave me personalized guidance. It walked me through all the IRS requirements for maintaining proper separation between W2 and 1099 work with the same company. The tool even helped me draft a proper independent contractor agreement that protected both me and my employer. What I really appreciated was that it explained exactly how to maintain separate business identities and record-keeping practices to avoid any issues if I ever got audited. Definitely worth checking out if you're in this situation!

I was in almost this exact situation last year and found https://taxr.ai super helpful for navigating this. My day job is in HR but I also do freelance HR consulting through my single-member LLC, occasionally for the same company. I uploaded my employment contract and the proposed contractor agreement to the AI tool, and it analyzed both documents to identify potential issues. It flagged some overlapping responsibilities that could've caused problems with the IRS and suggested specific language changes to clearly separate the work. The key was making sure my LLC contract specifically described services completely outside my normal job description. The tool also suggested I document different work locations and schedules for the contractor work vs. employee work. Really helped me structure everything properly!

I tried taxr.ai after seeing the recommendation here and I have to admit I was wrong about being skeptical. It actually provided extremely detailed guidance specific to my situation as both an employee and potential contractor. The document analysis feature was particularly helpful - I uploaded my employment contract and job description, and it flagged specific sections that could create conflicts with contractor work. It also helped me create proper documentation showing the clear distinction between my roles. What impressed me most was that it provided case studies of similar dual-role arrangements that had been reviewed by the IRS, including which ones passed muster and which ones failed. This gave me a much better understanding of how to structure things properly. I've now successfully contracted with my employer for 3 months with proper separation between roles.

Just wanted to update after trying out taxr.ai that was mentioned above. I was skeptical but decided to give it a shot for my similar situation (I'm an accountant who also does bookkeeping through my LLC for my employer occasionally). The document analysis was really impressive. I uploaded my employment contract and the draft contractor agreement my LLC was going to use. The tool flagged specific clauses that created potential issues - like how my employment agreement had a vague "other duties as assigned" clause that could overlap with my contractor services. It suggested rewording both contracts to establish clear boundaries. Also recommended I use separate work equipment, different hours, and document when I'm working in each capacity. Super practical advice that my regular tax software definitely doesn't provide. Glad I checked it out before finalizing anything!

If you're having trouble getting through to the IRS about your employee/contractor situation, I'd recommend Claimyr (https://claimyr.com). I spent WEEKS trying to get someone at the IRS on the phone to ask about my similar situation, but kept getting stuck in the automated system or disconnected. Claimyr got me connected to an actual IRS representative in less than 20 minutes when I had been trying for days on my own. They have this callback system that somehow gets you through the IRS phone tree hell. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with was actually really helpful and walked me through exactly what documentation I needed to maintain to keep my W2 and 1099 work separate and compliant. Much faster than waiting months for a formal SS-8 determination!

I need to apologize for calling Claimyr a scam. I was so frustrated with the IRS phone system that I was cynical about anything promising to help. After posting my skeptical comment, I decided to try Claimyr myself since I was desperate. I got connected to an IRS representative in about 25 minutes. I've literally NEVER gotten through to a human at the IRS before this despite trying dozens of times. The IRS agent confirmed that my situation (IT employee who also does freelance development for the same company) is perfectly legal as long as: 1) The work is substantially different 2) I have a separate business identity 3) I maintain control over how I complete the contract work 4) I have my own equipment and materials She even emailed me some documentation about contractor vs. employee classifications that was super helpful. Saved me months of waiting for an SS-8 determination!

Speaking from experience, make sure you have a solid written contract between your LLC and the company. I did this exact arrangement (W2 sales manager + 1099 training consultant for the same company) and it worked fine until there was a management change. The new manager tried to claim that ALL my work was covered under my employment and refused to pay my last two invoices, which were substantial. Because I had a detailed contract specifying exactly what services my LLC provided versus my employment duties, I was able to get paid eventually. Also make sure your employment contract doesn't have any clauses about outside employment or intellectual property ownership that could cause conflicts. Some companies have provisions claiming ownership of anything employees create, even on their own time.

Has anyone addressed the tax implications? When I was both a W2 employee and 1099 contractor for my company, I got hit with a surprisingly large tax bill. Since the 1099 income was on top of my regular salary, it pushed me into a higher tax bracket, PLUS I had to pay self-employment tax on the 1099 income. Make sure you're setting aside around 30-35% of your 1099 payments for taxes, and consider making quarterly estimated tax payments to avoid penalties. My accountant also suggested increasing my W2 withholding to help cover the additional tax from my contractor income.

I've been dealing with a similar situation and the hardest part was actually getting through to the IRS to ask questions about it. After trying for WEEKS to get someone on the phone (kept getting disconnected or told to call back later), I found https://claimyr.com which is basically a service that navigates the IRS phone system for you and calls you back when an agent is on the line. You can see how it works at https://youtu.be/_kiP6q8DX5c I finally got to speak with an IRS representative who confirmed what others here have said - yes, you can be both a W2 employee and 1099 contractor, BUT the work must be substantially different in nature. The agent recommended keeping detailed documentation of the different types of work, different hours when performing each role, and making sure your LLC has multiple clients if possible. The agent also suggested I keep a log of when I'm doing W2 work versus 1099 work to help demonstrate the separation in case of an audit. Worth the call to get direct confirmation!

Well I was completely wrong about Claimyr being a scam. After my skeptical comment I decided to try it myself since I've been trying to reach the IRS about a completely unrelated tax issue for months. The service did exactly what it promised - I entered my info, they called the IRS, navigated the menu hell, waited on hold (for 97 minutes according to the tracker!), and then connected me directly to an agent. I would have given up after 20 minutes of holding if I was doing it myself. The agent I spoke with was actually really helpful about my W2/1099 question too. She explained that they look at something called "behavioral control, financial control, and relationship of the parties" to determine if roles are truly separate. Said having separate written agreements, different work locations or equipment, and different supervision for each role are all important factors. Definitely worth the call!

Another option you might consider is filing Form 8919 "Uncollected Social Security and Medicare Tax on Wages" if you believe you're being incorrectly treated as an independent contractor for work that should be employee work. But that doesn't sound like your situation since the work is actually different. Make sure your LLC is properly set up with an operating agreement, separate bank account, business insurance, etc. When I did this, I also made sure to have different work hours for my contractor work vs employee work and used my own equipment for the contractor work. Helps establish the separation.

Just wanted to throw in a warning - be careful about the timing of payments too. My friend tried doing this (employee + contractor) and got flagged for an audit because all her 1099 payments from the company happened right after her annual employee bonus. The IRS suspected the company was using 1099 payments to avoid payroll taxes on compensation that should have been treated as bonuses. Make sure the payment schedules for your contractor work make sense for the actual services provided.

This is a great question and you're smart to research this thoroughly before proposing it to your employer. Based on what you've described, this arrangement could work legally, but there are several key factors to keep in mind. The most important thing is that your video production work through your LLC must be genuinely separate from your project coordinator duties. Since these are completely different skill sets and responsibilities, that works in your favor. The IRS uses a three-factor test to determine proper classification: behavioral control, financial control, and the nature of the relationship. For your situation, make sure to: - Have a formal written contract between your LLC and the company that clearly defines the scope of video production services - Use your own equipment and work during different hours when possible - Invoice through your LLC's business systems, not your employee email - Maintain separate documentation for each role You mentioned your LLC charges significantly more - that's actually good because it demonstrates this isn't just a way to avoid payroll taxes on regular compensation. The fact that you've been running your video production business independently for 3 years with other clients also strengthens the legitimacy of the arrangement. While there's no pre-approval form from the IRS, having proper documentation and maintaining clear separation between your roles should protect you. Many people successfully maintain dual W2/1099 relationships with the same employer when the work is truly distinct.

This is definitely doable, but I'd recommend getting everything documented properly before you even approach your boss about it. The key is making sure there's absolutely no overlap between your project coordinator responsibilities and the video production services your LLC would provide. Since you've been running your video production business independently for 3 years with other clients, that's a huge advantage - it shows this is a legitimate business entity, not just a tax avoidance scheme. The IRS really looks favorably on that kind of established business history. One thing I'd suggest is creating a detailed scope of work document that explicitly outlines what video services your LLC provides versus what your employee role covers. This helps establish clear boundaries and gives you documentation if questions ever arise. Also make sure your LLC continues serving other clients even after potentially contracting with your employer - having them as your sole client could raise red flags. The fact that your LLC charges significantly more than your employee rate actually works in your favor too, as it demonstrates this is genuine independent contractor work with market-rate pricing, not just additional compensation disguised as contract payments. I'd also recommend having a conversation with your company's HR department early in the process to make sure they're comfortable with the arrangement from their perspective. Sometimes getting their buy-in upfront can prevent headaches later.

Yes, this arrangement is definitely legal and quite common! Since your video production work is completely separate from your project coordinator role, you're in a strong position. The key is maintaining clear separation between the two types of work. A few important points to consider: **Documentation is crucial** - Make sure you have a formal contract between your LLC and the company that clearly defines the video production services. This should be completely separate from your employment agreement. **Maintain business separation** - Use your LLC's business email, invoice through your business systems, and if possible, use your own equipment for the video work. Keep detailed records showing when you're working in each capacity. **The 3-year history helps tremendously** - The fact that your LLC has been operating independently with other clients for 3 years is a huge advantage. This demonstrates it's a legitimate business, not just a tax avoidance scheme. **Pricing difference is good** - Your LLC charging significantly more than your employee rate actually works in your favor, as it shows this is genuine independent contractor work at market rates. I'd suggest creating a detailed scope of work document that explicitly separates what your LLC does (video production, editing, etc.) versus your employee duties (project coordination, client management, etc.). Also consider discussing this with HR early in the process to get their buy-in. No special IRS form is needed for pre-approval, but proper documentation will protect you if questions ever arise.

I actually went through this exact same situation about 6 months ago! I'm a marketing coordinator at a tech company, but I also run a freelance graphic design business on the side. When my employer needed design work for a major campaign, they asked if my business could handle it. The key things that made it work smoothly: **Get your employment contract reviewed first** - I discovered my employment agreement had a clause requiring disclosure of any business relationships with the company. Make sure you're not violating any existing agreements. **Price it like a real business** - Don't give them a "friend discount" just because you work there. I actually charged slightly more than my usual rates to clearly demonstrate this was a legitimate business transaction, not disguised employee compensation. **Document everything meticulously** - I kept a detailed project log showing exactly what work I did in my contractor capacity vs. my regular job duties. This included time stamps, equipment used, and even which email address I sent communications from. **Separate invoicing and payment** - My design work gets invoiced monthly through my business QuickBooks account to their vendor payment system, completely separate from payroll. This creates a clear paper trail showing two distinct relationships. The arrangement has been working great for 6 months now with zero issues. My employer loves having a trusted contractor who understands their brand, and I've been able to grow my business. Just make sure you maintain that clear separation at all times!

Based on everything shared here, it sounds like you're in a really strong position to make this work! Your 3-year established LLC with existing clients is a huge advantage that many people don't have when they start exploring dual arrangements. I'd recommend creating a simple one-page summary document that outlines: - Your LLC's business history and current client base - Clear distinction between video production services vs. project coordination duties - Professional pricing structure that reflects market rates - Proposed workflow that maintains separation (different emails, invoicing systems, etc.) When presenting this to your boss, I'd keep it business-focused rather than diving into all the IRS classification details. Something like "My video production company has the expertise and capacity to handle your needs professionally" rather than "I've researched the legal requirements for dual W2/1099 arrangements." The compliance work you've done gives you confidence, but they probably care more about getting quality video work delivered reliably. Let the professional structure speak for itself. For record-keeping, a simple time tracking app should be sufficient - just enough detail to show clear separation if ever questioned. No need to overcomplicate it. Good luck with the proposal! It sounds like a win-win situation where your employer gets trusted video expertise and your LLC grows with a valuable long-term client.

This is a really well-thought-out question, and you're absolutely right to research this thoroughly before approaching your employer. Based on your situation, this arrangement should work perfectly fine legally. The key factors working in your favor are: **Truly separate work** - Video production is completely different from project coordination. The IRS looks at whether the work is substantially different, and you clearly pass that test. **Established business history** - Your LLC has been operating independently for 3 years with other clients. This is huge for establishing legitimacy and showing it's not just a tax avoidance scheme. **Market-rate pricing** - The fact that your LLC charges significantly more than your employee rate actually helps demonstrate this is genuine independent contractor work. **Different skill sets and equipment** - Video production requires specialized skills and equipment that your regular job doesn't involve. For documentation, make sure to: - Create a formal written contract between your LLC and the company - Use your business email and invoicing systems for all contractor work - Keep records showing when you're working in each capacity - Continue serving your other clients to maintain the independent business nature You don't need any special IRS pre-approval forms. Form SS-8 exists for worker classification questions, but it takes 6+ months and alerts your employer to the inquiry, so it's not practical for your situation. The biggest thing is maintaining clear separation between your two roles. Since the work is genuinely different and you have an established business, you should be in great shape. Good luck with the proposal!

This is such a great question and you're being really smart to research this thoroughly beforehand! As someone who works in tax compliance, I see these dual-role situations come up fairly often, and when structured properly, they work out just fine. Your situation actually has several strong factors going for it. The fact that your LLC has been operating independently for 3 years with other clients is huge - it clearly establishes that this is a legitimate business, not just a way to restructure employee compensation. The work being completely different (video production vs. project coordination) also helps a lot with the IRS's "substantially different work" test. A few practical tips based on what I've seen work well: **Documentation is key** - Create a detailed scope of work that clearly separates what your LLC provides versus your employee duties. This becomes your roadmap for maintaining proper separation. **Maintain business formalities** - Use your LLC's business email, invoice through your business accounting system, and keep your contractor work equipment/software separate from what you use as an employee. **Continue diversifying clients** - Keep serving your other clients even after potentially adding your employer. Having them as just one client among several really strengthens the independent contractor relationship. The pricing difference you mentioned (LLC charging more) actually works in your favor too - it demonstrates this is market-rate professional work, not disguised employee compensation. No special IRS pre-approval needed, just make sure you maintain that clear separation between roles. Good luck with your proposal!

This is a really solid situation you're describing! Having an established LLC with 3 years of operating history and existing clients puts you in an excellent position to make this work legally and professionally. The key thing that stands out to me is that your video production work is genuinely different from your project coordination role - this isn't a gray area situation where you're trying to reclassify similar work. The IRS really focuses on whether the contractor work is "substantially different" from employee duties, and you clearly meet that standard. A few suggestions as you move forward: **Start with your employment contract** - Review it carefully for any clauses about outside business activities, intellectual property ownership, or disclosure requirements. Better to identify any potential conflicts now rather than after proposing the arrangement. **Document your LLC's independence** - Since you already have other clients and have been operating for 3 years, make sure you have good records showing this is a legitimate independent business. This history will be your strongest defense if questions ever arise. **Plan the business relationship carefully** - When you do propose this to your boss, frame it as your established video production company offering services, not as an employee looking for additional work. The professional positioning matters. **Maintain clear separation** - Use your business email, invoice through your LLC's accounting system, and keep detailed records of when you're working in each capacity. The fact that your LLC charges significantly more than your employee rate actually works in your favor - it demonstrates this is genuine market-rate professional work. Good luck with the proposal!