Many business owners make the mistake of believing that they can simply choose who to classify as a subcontractor and who as an employee.
This is not true!
There are very specific IRS rules that govern this decision. When in doubt, the specific attributes of any person you are paying for services should be be filtered through these IRS rules.
What is your exposure if you misclassify someone?
The IRS could look for the payroll taxes that you failed to withhold.
NJ could do the same, but also they can reclassify amounts paid to subcontractors as wages so they can charge you for the unemployment and disability that you failed to withhold. NJ has an extremely strong UI and Disability auditing department.
Are you in a situation where you are not 100% sure how to classify someone you are paying?
Are you paying people as subcontractors with the false belief you can simply choose to pay them that way instead of as an employee? Call me immediately. 732-673-0510.
Click here to ask me any question you may have.
Please reach out to me without hesitation with any tax, business or accounting question, and to schedule a consultation.
Tax Laws are complex.
It is very easy to make mistakes that can incur penalties.
Do you have a Tax, Accounting or Business Question?
Call Me Immediately. (732) 673-0510.
Is your CPA or Attorney
ignoring your Phone Calls and Emails?
Call Me Immediately. (732) 673-0510.
Remember,
“If We Aren’t Working For You, Then You Aren’t Working At Your Best”
Chris Whalen, CPA
(732) 673-0510
79 Oak Hill Road
Red Bank, NJ 07701
www.chriswhalencpa.com
