Tuesday, October 17, 2017

Employee or Independent Contractor? Is it Worth the Risk!

By Ben Kinsey, CPA
Courtesy of Army.mil

Are you willing to gamble with the IRS on Contractors versus Employees, it can be a business killer if you Lose?  When should you hire an Employee versus a Contractor?  “Do You Know the Rules that determine and Independent Contractor?

Are they an Employee or Independent Contractor? Know the Rules the IRS encourages all businesses and business owners to know the rules when it comes to classifying a worker as an employee or an independent contractor. An employer must withhold income taxes and pay Social Security, Medicare taxes and unemployment tax on wages paid to an employee. Employers normally do not have to withhold or pay any taxes on payments to independent contractors. Here are two key points for small business owners to keep in mind when it comes to classifying workers: