Many businesses make their bread and butter off of independent contractors. The problem is that there are very distinct differences between independent contractors and regular employees. The main difference is that businesses must pay taxes on employees, while they do not on independent contractors. To this end, there have been quite a few businesses that have gotten themselves into a sticky situation regarding the difference between these two classes of workers-businesses who had been misclassifying employees as independent contractors could face stiff fines.
The good news is that if you happen to be a business owner who has been toeing the wrong side of the line when it comes to the differentiation between these two groups, there is relief on the way. Due to the large amount of businesses that have gotten into trouble regarding misclassifying workers, there is now a relief program that is designed to encourage business owners to get on the straight and narrow when it comes to clearing the slate.
Help For The Honest
In order to take advantage of this program, interested companies would need to file a Form 8952, which explains their situation insofar as misclassified employees are concerned. Assuming that the IRS accepts the form, the company will end up paying a fine that is equivalent to one percent of the wages that were paid to the workers who were misclassified over the previous calendar year. Considering how many businesses have ended up being responsible for thousands, if not millions, of dollars in tax back pay in the past, when it comes to the issue of misclassified workers, this is a deal!
If you happen to be in the position of having misclassified employees on your payroll, you should take the initiative and apply for a Form 8952 immediately. This will help you get out of hot water when it comes to tax back pay with the IRS. If you refuse to take advantage of this opportunity, you could be hit with serious fines in the future. Let this program help you clean the slate with the IRS and get back on the right track with your payments.
For more information regarding the difference between independent contractors and employees, be sure to pick up a free copy of the Employer’s Tax Guide, which provides a comprehensive list defining the two different sorts of workers. You can pick up this guide from the IRS at their website. There is also a supplemental tax guide that can be picked up at the same website and could help further the differentiation between the classes of workers.