Hi all –
This newsletter is to clarify and give guidance on a subject that has been a topic of much importance with many of our clients in years past and will continue to be moving forward.
Many business owners need guidance on who is and is not an EMPLOYEE (on payroll) vs. INDEPENDENT CONTRACTOR (on 1099). Every taxing agency has a slightly different definition of both. So that you can see how “unclear” and/or gray the rules may be, we’ve included a checklist that the IRS uses to determine whether someone is an employee or independent contractor. There is no specific rule that says if you meet a certain number of these that your folks are employees or subcontractors.
We’ve decided to establish our own guidelines to help you define who should be classified as an employee vs. independent contractor:
- Does the individual work on your site with your tools and/or equipment?
- Do you determine the individual’s hours they will work?
- Do you provide rules for the individual to complete tasks assigned to them?
- Does the individual work more than 20 hours per week consistently for you?
- Can you confirm that the employee does not provide the same service to other businesses for more than 50% of their time?
If you can answer YES to all 5 of these questions, then the individual should be put on payroll. If you answer NO to one or more of these questions, the individuals may still need to be put on payroll, but it may require further questions to determine the best answer.
Payroll Services can easily be provided to all clients, and we would be happy to provide you with a quote for any services you may need. Please email Leslie Zarlengo from White Glove Payroll at [email protected] for more information.
If you want us to prepare your 2024 1099s, please fill out this form OR reply to this email and we will provide you with a document to fill out and send back to us.
Thank you for your continued support! Please contact us with any questions.