If you are a business owner wondering whether to treat an individual working within your business as an employee or an independent contractor, here is what you should consider:<\/p>\n
1.\u00a0 Does your company have the right to control what the worker does and how they do it?\u00a0 Are they allowed to work for other companies as well?\u00a0(Behavorial Control)<\/p>\n
2.\u00a0 Do you control how the personal is paid?\u00a0Do you\u00a0reimburse them for expenses?\u00a0 Do you provide the tools and equipment or do they?\u00a0(Financial Control)<\/p>\n
3.\u00a0 Are there written contracts or employee type benefits? (Type of Relationship)<\/p>\n
Once you consider these three factors, (behavior, financial, and relationship) then you can start to determine whether or not your worker should be an employee.\u00a0 If the worker only works for you, you provide them with all needed equipment, and you offer them health insurance or a retirement plan, then most likely this worker should be treated as an employee.\u00a0 If you allow the worker to work for other companies, do not provide them with necessary equipment, and offer them no benefits, then it is possible that they could be treated as an indepedent contractor.\u00a0 Remember that when you have an employee it is your job to withhold income tax, and pay social security and medicare tax on that employee.\u00a0 An independent contractor is simply paid for their work and issued a 1099 at year end.\u00a0<\/p>\n
If you classify an employee as an independent contractor and have no reasonable basis for doing so, then it is possible that you can be held liable for paying employment taxes on that individual.\u00a0 If you have any questions on how your worker should be classified (employee vs. independent contractor) then it is always a good idea with contact your tax professional.<\/p>\n
\u00a0<\/p>\n
If you are a business owner wondering whether to treat an individual working within your business as an employee or an independent contractor, here is what you should consider: 1.\u00a0 Does your company have the right to control what the worker does and how they do it?\u00a0 Are they allowed to work for other companies […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[19],"tags":[],"class_list":{"0":"post-2883","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-small-business","7":"entry"},"_links":{"self":[{"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/posts\/2883","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/comments?post=2883"}],"version-history":[{"count":0,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/posts\/2883\/revisions"}],"wp:attachment":[{"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/media?parent=2883"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/categories?post=2883"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/tags?post=2883"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}