Get IRS Business Help with IRS Tax & IRS Payroll Tax
IRS Tax Help: If you are just starting your Small Business, things are still shaky. Having IRS Business Help early on is a good way to prevent IRS Tax problems, like IRS Payroll Tax issues. IRS Payroll Tax issues is the number one reason why a small business will get into trouble with the IRS and need IRS Business Help. Get IRS Business Help early to prevent serious issues with the IRS.
IRS Business Help, Which one for IRS Payroll Tax? Should you classify your workers Employees or independent contractors on your IRS Payroll Tax? Your business cannot treat employees as independent contractors. Why? Because that would mean you could avoid tax reporting, bookkeeping, and withholding taxes from paychecks. And the IRS does not take that lightly.
Penalties, Fines, & Interest from IRS Payroll Tax: The IRS Tax penalties imposed for misclassifying workers on IRS Payroll Tax is severe. You may have to pay up to 35% of what you paid to the wrongly classified worker, plus interest. That's on top of the payroll taxes that are still due.
IRS Business Help- Classifying Workers: Form 22-8 "Determination of Employee Work Status for Purposes of Federal Income Tax Withholding" includes the following for classifying workers.
Common Factors Showing The Worker is an Employee:
-They have set hours of work
-You trained the worker to perform in a particular manner
-The worker has the right to quit at will and you have the right to fire them
-You provide significant tools and equipment for the worker
-the worker's services are part of your business operations
-Your worker cannot hire others to do their work
Common Factors Showing the Worker in an independent contractor:
-The worker is free to work for anyone they choose.
- The worker hires, supervises, and pays for assistants
-The worker can't be fired as long as they meet the terms in the contract
-The worker works at their own office/shop
-The worker is paid by the job or is paid commission
Priority: The IRS checks the classification of workers very carefully. It is actually a priority if your business is being audited. Take these lessons with you. Make sure to classify your workers correctly if you want to avoid huge IRS debt.