Are your workers independent contractors or employees?
Tax Tip of the Week
May 20, 2013
Are your workers independent contractors or employees?
Do you hire independent contractors to help with business tasks? Are you sure those workers are independent contractors — or should you be treating them as employees?
As expanded employer responsibilities take effect under health care laws, correctly answering the question of whether your workers are employees or independent contractors is becoming more urgent.
How do you know the proper classification? While the IRS provides twenty factors to use as an analytical tool in making the decision, the final answer depends on the facts and circumstances specific to your situation.
Here's where to start: Evaluate your right to control both the end result expected of the person performing the service for your business and the means of achieving that result. More control — such as providing an office, materials, or equipment — can indicate employee status.
If you determine your workers have been misclassified, you can choose to begin treating them as employees. The current Voluntary Classification Settlement Program, in effect through June 30, 2013, provides partial relief from back taxes and penalties.
Please call if you have questions about worker classification. We'll review your business relationships with consultants, contractors, teleworkers, and freelancers; identify areas of risk; and offer suggestions for proactive solutions.
"Tax Tips" are published weekly to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
© MC 2013
May 20, 2013
Are your workers independent contractors or employees?
Do you hire independent contractors to help with business tasks? Are you sure those workers are independent contractors — or should you be treating them as employees?
As expanded employer responsibilities take effect under health care laws, correctly answering the question of whether your workers are employees or independent contractors is becoming more urgent.
How do you know the proper classification? While the IRS provides twenty factors to use as an analytical tool in making the decision, the final answer depends on the facts and circumstances specific to your situation.
Here's where to start: Evaluate your right to control both the end result expected of the person performing the service for your business and the means of achieving that result. More control — such as providing an office, materials, or equipment — can indicate employee status.
If you determine your workers have been misclassified, you can choose to begin treating them as employees. The current Voluntary Classification Settlement Program, in effect through June 30, 2013, provides partial relief from back taxes and penalties.
Please call if you have questions about worker classification. We'll review your business relationships with consultants, contractors, teleworkers, and freelancers; identify areas of risk; and offer suggestions for proactive solutions.
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
© MC 2013
