Employee,Independent,Contracto business, insurance Employee vs Independent Contractor
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Employee vs Independent Contractor rules are becoming more important with each passing year. We have a Federal Government that is broke and a social security system beyond repair. Stated simply, they need the money. The rules didn't change. They simply started enforcing the rules that have been in existence for years.The overall rule is that if there is any doubt whatsoever, the worker is considered an employee. If there is any control whatsoever, and the payee is an individual rather than an entity, they are probably considered an employee under Federal & State law. As such, the employer is probably responsible for taking out the applicable employee taxes. The easiest way for the IRS to put you out of business is for you to treat your employees like independent contractors. Handling this properly will only cost you in raw tax another eight to ten cents on the dollar. Handling this improperly will subject you to the amount of tax that was supposed to be withheld along with interest and penalty. This amount can easily start at another fifty percent and continue to increase over time.Many clients make the mistake of thinking that an Independent Contractor Agreement signed by the worker will protect them. Please don't make this mistake. You could have an agreement the size of the Old Testament, prepared by the most influential law firm in the state, that makes whatever allegations, and says whatever it says. But at the end of the day, The IRS probably won't even look at it in making it's determination. The IRS will look at the nature of the relationship in trying to determine if you are liable.If you are having problems with your Employee vs Independent Contractor rules or have issues with your accounting in general, we would love to help. I love hearing from my readers, and can be contacted [email protected] Accounting Articles and information on my firm can be found atwww.AccountingSolutionsLtd.com Article Tags: Independent Contractor
Employee,Independent,Contracto