Cfo Independent Contractor Agreement
Talk to your tax and legal advisors to decide whether workers should be classified as employees or contractors. This is an important decision that can have significant consequences if it is mishanded. In addition, there is a historical precedent for classifying these types of workers as self-employed contractors: what should you do if your company has properly classified workers as self-employed contractors and if a worker runs on an SS-8 form, indicating otherwise? You can continue to treat the workforce as a contractor, regardless of what is written in the IRS destination letter. However, if you are asserting yourself, be prepared for an employment tax review. Your tax and legal advisors can help you, as well as other issues related to independent contractors. On the other hand, the status of an independent contractor is attractive because you don`t have to worry about employment tax and you don`t have to offer expensive ancillary benefits such as health insurance, old age insurance and paid leave. If you pay $600 or more to an independent contractor during the year, you must issue a Form 1099-MISC to report what you paid. This is usually the extent of your bureaucratic responsibility. The IRCs and IRS apply an “economic reality test” to determine the classification of the workforce (see “Worker Classification Choice Factors” on the right). But determination traditionally boils down to this: a worker is an independent contractor, if you have little or no control over how that person does the job.
If you offer complete daily supervision, the work force is probably an employee. Companies are now given a greater incentive to classify new hires as independent contractors: they are downsizing to meet the ACA and thereby reduce their health insurance costs and reporting obligations. Anyone who enters a British business partnership will know, here`s the catch: if you misrecontract an employee who is actually an employee as an independent contractor, your company could charge taxes on unpaid wages, plus interest and penalties. They could also be held liable for employee benefits that should have been granted, but not, including significant penalties under federal law. You can also submit form IRS SS-8, “Determining the Status of Workers for Federal Labour Tax and Withholding Income Tax.” Then, the IRS dictates how a work force is classified. Note, however, that in the past, the IRS has reflexively characterized workers as workers and not as self-employed contractors. A worker seeking to determine his or her status as an employee or self-employed contractor may also submit the SS-8 form. Angry former workers are particularly likely to submit the form to show that a company unduly refuses workers` benefits by classifying it as an independent contractor.
It will certainly help your independent contractor argument if the work is done from your premises with worker`s appliances. But these facts are not a panacea, especially if you are treating another worker in circumstances that are substantially the same as a worker`s.