September 9, 2015

Question:

Jennifer,

I'm reading some things about possible exposure for having independent contractors.  For tax purposes I want to keep my employees as independent.  What do you think?

Thanks,

Dr. K

Answer:

Careful here. Worker classification is a hot area of audit right now. Whether or not workers qualify as an independent contractor or an employee is governed entirely by guidelines established by the IRS and relate to actual control over job functions and scope of autonomy, and has very little to do with whether you take withholdings.   Failing to classify correctly can create tremendous exposure for your practice.  

If you originally classified based on advice by your accountant, you may want to revisit this issue. Proof of bad advice will not stop an audit or exposure.  

To discuss your independent contractors and their status, contact Erica or me directly.  


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