Keep on the good side of the IRS — Make sure you classify workers properly

Description

Abstract: There are tax and other advantages for a business that retains independent contractors (ICs). If, however, the IRS determines that an employee has been misclassified as an IC, the employer could be subject to back taxes and penalties not only for the taxes it should have paid but didn’t, but also for the taxes it should have withheld. That’s why knowing the difference between an employee and an IC is critical to a business’s bottom line. This article discusses the factors that determine this difference and how to establish procedures for determining worker classification.