The IRS targets worker classification – Employees vs Independant Contractors | | Bay Business Group LLC
If you have people working for your business, you may have to decide how to classify them. Are they employees or independent contractors? Classifying your workers as independent contractors generally saves you money. That's because you avoid paying employment taxes and benefits on their behalf. In most instances, however, very few of your workers actually qualify as independent contractors. If the IRS determines that you misclassified your employees as contractors, you could end up paying back all of the employment taxes and benefits that should have been paid over the years. Depending on the size of your workforce, the cost to you could be substantial, potentially bankrupting your business. How can you ensure that you properly classify your workers? Start with the factors listed by the IRS to determine a worker's classification. If you maintain control over your workers through hiring, training and supervision, scheduling the work to be done, and by providing them with tools and