How the IRS Determines Worker Classification – Business Tax Relief Tips
Tax Relief FAQ: What Is Worker Mis-classification And How Does The IRS Determine It In Business Audits?
As a business owner, there are two types of workers you will deal with: employees and independent contractors. When it comes to tax and the IRS, the difference between the two is crucial. For each employee, it is the business owner's responsibility to withhold and pay Social Security and Medicare taxes, income taxes and pay unemployment taxes on wages paid. However, when employing an independent contractor, as a general rule, the owner is not responsible for any of these taxes.
Fees There are countless horror stories of people who've been duped into paying over hundreds, even thousands of dollars to a tax relief company, only to not get a sufficient level of service or in some cases, no service at all. To avoid this, you must look carefully at the fees policy of any company you engage.
Avoid Hefty Upfront Fees Tax relief specialists are not inherently cheap, but they aren't overtly expensive either. How much you pay is always going to hinge on your circumstances and the complexity of your case.
Most scam firms like to charge hefty upfront fees before they even look at your case. It is important therefore that you avoid these firms and only engage the ones that seem open to giving you a free consultation.
Avoid Poor Communication & Unresponsiveness One of the things that will become apparent very quickly is how responsive the potential firm is at dealing with your queries. The IRS claims process is very communication intensive.
Another point to note is that workers who believe they have been misclassified by their employer as independent contractors can report their share of uncollected Social Security and Medicare taxes due.
Provided you follow the 3 top guidelines above, there is absolutely no reason you shouldn't find a decent tax professional to help you solve your IRS problems. An even better course of action is to source your tax relief specialist online. Online specialists are usually cheaper (they have less overhead) and you are less likely to run unto the problems outlined above.
Harris Smith is a personal finance writer interested in home equity line of credit Don't Miss Out!
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