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Tax Tip Tuesday: Employee vs. independent contractor

Hey everyone, welcome to another Tax Tip Tuesday. Today, I'm going to be discussing the difference between employees versus independent contractors.

This is a really important topic because if you try to be independent employee and you're actually an employee or... Sorry, I just got that screwed up. If you're trying to be an independent contractor and you're really an employee, then you as the employer could get in big trouble and have to pay a lot of additional penalties and interest and fines basically for misclassifying your actual employee.

There's a lot of employers that try to have everything or have their employees employed as independent contractors just to save on payroll taxes, et cetera. But, I mean, if basically if you are controlling how the worker's paid and the behavior of the employee or the worker, you know, what tools they use, whether you provide equipment, if you're directing when they need to be working and how they're supposed to be doing it, along with if the worker is entitled to any sort of benefits as well. Those are all the sort of things that the IRS looks at when trying to determine.

If you're not sure, it's always better to err on the side of caution and just say that you're an employee. If you believe that you're an employee but you're being treated as an independent contractor, there are steps to take in order to classify you properly.

If you have any additional questions about that, let me know. I hope you found this helpful and please follow us on Facebook and Twitter and LinkedIn, on YouTube channel. If you're interested in having any sort of discussions about your employment status or if you're thinking about even changing from being an employee to an independent contractor and you're not quite sure of those tax consequences, let me know and I can help you out and we'll go from there.

*this is a transcript taken from our Tax Tip Tuesday videos on Youtube.  Watch the full video here.