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Bank account recs
Posted on 4/27/15 at 10:56 pm
Posted on 4/27/15 at 10:56 pm
(no message)
This post was edited on 5/2/15 at 12:55 am
3
Posted on 4/27/15 at 11:56 pm to UFownstSECsince1950
LINK
This may be helpful from the IRS. When in doubt, I'd recommend you hire all employees and withhold their taxes + pay the 7.65% freight in employer SS/Medicare. If you have a tax advisor, they'd probably tell you the same thing.
If you are going to classify as independent contractors, do your homework in what the IRS looks for in the event of a payroll audit.
This may be helpful from the IRS. When in doubt, I'd recommend you hire all employees and withhold their taxes + pay the 7.65% freight in employer SS/Medicare. If you have a tax advisor, they'd probably tell you the same thing.
If you are going to classify as independent contractors, do your homework in what the IRS looks for in the event of a payroll audit.
Posted on 4/28/15 at 12:16 am to Boh
(no message)
This post was edited on 5/2/15 at 12:55 am
Posted on 4/28/15 at 12:23 am to UFownstSECsince1950
That sounds reasonable but I only know the broad strokes of the subject. Perhaps someone else on the board has more insight.
If you are providing all the materials for the activities and games, then an argument can be made the other way to say they are employees.
The couple of people I know that deal with this make it sound like a real gray area. I'm all for small business owners to keep costs as low as possible, but paying an extra $765 on $10k of payroll to eliminate the risk of penalties + interest down the road is an easy choice for me. But by all means, do your research like you said and go for it if you have a good handle on the subject.
If you are providing all the materials for the activities and games, then an argument can be made the other way to say they are employees.
The couple of people I know that deal with this make it sound like a real gray area. I'm all for small business owners to keep costs as low as possible, but paying an extra $765 on $10k of payroll to eliminate the risk of penalties + interest down the road is an easy choice for me. But by all means, do your research like you said and go for it if you have a good handle on the subject.
Posted on 4/28/15 at 12:52 am to Boh
(no message)
This post was edited on 5/2/15 at 12:55 am
Posted on 4/28/15 at 6:33 am to UFownstSECsince1950
I just know the basics on the difference between 1099 and W-2. If you have W-2 employees, you have to pay payroll taxes on them which is an additional 9% outside of witholding their state and federal taxes. You can do this on your own, but I would hire an accountant to handle this (another incremental cost). 1099 Indy Contractors are much easier as you basically just cut them a check at the end of each month, get them to fill out a W-9 for your records, and then issue 1099s come tax season.
LINK
LINK
Posted on 4/28/15 at 7:55 am to UFownstSECsince1950
quote:
So if I hire my staff and tell them to make it a fun summer for the kids, then they are ICs, correct? They are determining the themes each week. They are determining the activities, games, etc on a daily basis. They are also controlling their own hours and days as well.
Is this how you want to run a camp?
Posted on 4/28/15 at 8:45 am to UFownstSECsince1950
You had best consider them employees. What happens if one of the workers gets injured on the job? Do you want your insurance to have to cover that person's entire damages, or would you like to limit their claim to workers' compensation coverage? If one of your hired help complains that he was an employee rather than an independent contractor, and it is determined that he was an employee, who do you think will be on the hook for all of the unpaid payroll taxes and penalties for failure to withhold properly?
Pretending workers are independent contractors can save a little money in the short run, but it can be seriously more expensive in the long run if it is determined that your workers were misclassified. The civil fines for misclassifying workers can be up to $25,000 per event.
Pretending workers are independent contractors can save a little money in the short run, but it can be seriously more expensive in the long run if it is determined that your workers were misclassified. The civil fines for misclassifying workers can be up to $25,000 per event.
Posted on 4/28/15 at 9:26 am to UFownstSECsince1950
If you have to ask... they should be classed as employees.
(Note: The vast majority of ICs really should be employees, and if the IRS ever got really serious about it, they could have a field day).
Think of it this way: an independent contractor is someone who is in business for themselves, who provide services to customers. Do you really think some teenagers or college kids are in business for themselves?
(Note: The vast majority of ICs really should be employees, and if the IRS ever got really serious about it, they could have a field day).
Think of it this way: an independent contractor is someone who is in business for themselves, who provide services to customers. Do you really think some teenagers or college kids are in business for themselves?
Posted on 4/28/15 at 6:13 pm to LSUFanHouston
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.
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.
This post was edited on 4/28/15 at 6:27 pm
Posted on 4/29/15 at 12:30 am to GFunk
If you are going to pay them as ICs I'd make sure you pay them things like mileage reimbursements and make them submit invoices for whatever work they performed.
I'd probably just make them employees, do the withholding and not offer them benefits if they are seasonal workers.
I'd probably just make them employees, do the withholding and not offer them benefits if they are seasonal workers.
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