The Statutory Employee provisions in the Code have not changed as a result of TCJA, so loan originators still do not meet those definitions.

- There is such a thing as a misclassified W-2 worker. See BUTTS CASE [Butts v Commissioner, TC Memo 1993-478 affr 49 F.3d 713(11th Cir)]. Also see WICKUM CASE (Wesley C Wickum v Commr, T.C. Memo, 1998-270) and HATHAWAY CASE (Paul E Hathaway v Commr, T.C. Memo 1996-389). In these cases, the worker got a W-2 and was allowed an above-the-line deduction for their expenses. I presume only the expenses were listed on the Sch C and presume the W-2 was listed as usual on the Form 1040. As a side note, it is common and normal for "day-traders" to report their expenses (computers, internet etc) on Sch C and their income on Sch D - just an FYI to show how others report their business expenses above-the-line.

- An employer provided salary reduction plan that funds a spending account is one solution.

- Having the worker form an LLC or corporation and becoming its only employee, and having the entity contract with the entity for services would allow the worker to deduct their expenses through their entity and report their income as guaranteed payment for services-subject to SESS. However, look into the personal service corporation Code provisions.

- By the way, the Dept of Labor, in mid-November, 2020, issued new guidance related to employee vs. independent contractor. Under their provisions, howsoever the employer classifies the worker controls. I think this merely shifts the burden of proof to the worker to prove their status. And I am not sure how this affect the IRS's position.

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