re: Bank account recs

Do they work on your location? Do they identify themselves as working for you or on behalf of your business? Do they answer the phone there as Employer LLC? Or do they answer the phone and say it's your office.

You don't need to worry with the Feds...the state department of Labor will walk in, ask you three questions, ask for copies of their 1099's and you absolutely will get them reclassified and immediately be on the hook for payroll taxes.

Trust me...I'm speaking from experience when I stay it's a gamble you do not want to take. State Workforce Agencies can and do audit folks DAILY for it. It will be your turn. theyll go back as long as you've done it too...

ETA: USDOL has really pushed SWA's to increase audits to uncover many more instances of Misclassified Workers. I'll say it again: the Feds aren't the ones to worry about. The state is and they fill their coffers with taxes and penalties for nailing folks who do this.

The tone you're taking makes it seem as if you want to avoid payroll taxes and honestly-it's something I've heard lots of times from biz owners (that's so expensive! It's so confusing!)...and my response is HTF did you grow a business to the point of 20+ employes and you don't understand how to file quarterly payroll taxes and/or have adequate payroll/accounting systems in place?

My advice: Call your local SWA and ask them for guidance or log onto your State Department of Labor.