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Contractor or Employee? Knowing the difference is important
Too many small businesses have been taxed and penalized for having independent contractors that the IRS believes should be employees. This is even more critical given the requirement to have health insurance. Is a worker an independent contractor or an employee? This seemingly simple question is often the contentious subject of numerous IRS audits. As an employer, getting this wrong could cost you plenty in the way of Social Security, Medicare taxes, and other employment related taxes. Here is what you need to know. The basics As the worker. If you are the worker and you are not considered an