Many businesses utilize individuals who classify themselves - or are classified by the business owner - as an independent contractor. This may seem to be an efficient and effective solution for many situations. However, there are stiff penalties and fees if an individual is incorrectly classified as a contractor rather than an employee.
For a review of factors that will help you determine how to properly classify your workers, check out this article: IRS Rules for Classifying Workers.
This general information should not be acted upon without first determining its application to your specific situation. Please contact your CPA or tax advisor for additional details.
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