The end of January is here and by now taxpayers should receive their income tax information (W-2’s and 1099’s) for correct tax filing. I am sure for the small business owner, “information returns” had to be one of your many priorities for the first month. It is important that workers are properly classified when preparing W-2 and 1099’s to ensure that the small business is in compliance with IRS regulations. The IRS looks at 3 areas to determine if a worker is an employee or independent contractor.
1. Behavioral control – the right to direct the performance of specific tasks
2. Financial control – the right to direct the financial opportunities of the worker
3. Relationships – Actions and agreements between the two parties
Be sure to review these areas before submitting your information returns in the coming months. The next deadlines will be here before you know it.
Keeping Your Business N Synergy