COSTA MESA WORKER CLASSIFICATION AND TAX RELIEF
What to Know About Worker Classification in Costa Mesa
What is worker classification? Business taxpayers that fail to properly classify its workers can be faced with serious tax consequences. By ensuring each worker is accurately classified as an independent contractor or employee, businesses will know which tax laws they are required to follow. Proper worker classification will determine how a business pays payroll taxes, files reporting documents, reports wages, and much more.
How can I tell if my workers are employees or independent contractors?
Since the IRS takes classification of workers very seriously, employers who misclassify their workers may be held liable for employment taxes and possible penalties. The IRS encourages employers to examine the business relationship that exists between the business and the worker who provides the service in order to determine if the worker is an employee or independent contractor. In general, the more control and authority a business has over a worker, the more likely it is that a worker should be classified as an employee. For a free IRS tutorial on how to distinguish between employees and independent contractors, click here and select play.
What else do I need to know about worker classification issues?
Businesses that are unsure of how to classify their workers can get help from the IRS. To request assistance from the IRS, businesses can submit a completed Form SS-8 to the agency requesting a determination letter. Workers can also request a determination to be made by submitting the same form to the IRS address listed in the Form’s instructions.
If you need help with worker classification matters or preparation of Form SS-8 in Costa Mesa, contact us today at 1-714-382-6780 for a free, confidential consultation with experienced Costa Mesa CPAs, enrolled agents, and tax attorneys.
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