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Something I've been wondering for a while

Hitman

Registered Member
I went to school for accounting and in my CPA review class we just started talking about taxation. This reminded me of a question I had regarding the employment status of wrestlers. Under tax laws, even if you are not officially under an exclusive contract with a company, you are considered an employee of that company if you work for only them for a period of time (I think it's at least 6 months). So that got me wondering how does WWE get away with calling the wrestlers independent contractors? The wrestlers are usually under exclusive contracts to WWE and are legally considered WWE employees. I know there has to be some legal loophole but I really want to find out what it is.

If you think about it, calling the wrestlers independent contractors really helps WWE, but hurts the wrestlers. WWE has less payroll tax to pay and it's not responsible for giving wrestlers benefits like healthcare. It hurts the wrestlers because they now have to pay self-employment tax because they are considered to be running their own business in a legal sense.

I got stuck in a situation like that once. I worked for a guy exclusively on a per hour basis for 9 months. I didn't have a contract but had a verbal agreement. I thought I was on his books because he always paid me by check. So since I only made like $4,000, I figured I didn't have to file my taxes (If you make less than $9,000 you don't have to file). Anyway, a few months go by and I find out that the whole time, he had me listed as an independent contractor. So now, not only did I owe like $700 in self-employment tax, but I also had to pay the resulting penalties and fines for late payment. After it was all said and done, I was out about $1,000 when I wouldn't have paid anything if I was listed as an employee of the company.
 
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