Landmark Tax Group

Worker Classification Relief in Los Angeles


What to Know About Worker Classification in Los Angeles

What is worker classification? The IRS may impose serious tax consequences upon business taxpayers that fail to properly classify its workers. By ensuring each worker is correctly classified as an employee or independent contractor, business owners will have a better understanding as to which tax rules they are required to follow. Proper worker classification will determine how a business files reporting documents, pays payroll taxes, reports wages, and much more.

How can I tell if my workers are employees or independent contractors?

Since the IRS considers classification a serious matter, employers who misclassify their workers may be assessed penalties and held liable for unpaid employment taxes. The IRS encourages employers to examine the business relationship that exists between the business and each worker to determine if the worker is an independent contractor or statutory employee. Generally, the more authority and control an employer has over a worker, the more likely it is that a worker should be classified as an employee. For help in distinguishing between independent contractors and employees, click here and select play for a free IRS tutorial.

What else do I need to know about worker classification issues?

Employers in need of assistance with worker classification matters can ask for help from the IRS. To get assistance from the IRS, employers can request a determination letter by submitting a completed Form SS-8 to the agency. Workers that are unsure of their classification status with a company can also request an IRS determination by utilizing the same IRS form and mailing it to the IRS address listed in the form’s instructions.

See: 6 Ways to Reduce Your Chance of an IRS Audit

If you need help with worker classification matters or preparation of Form SS-8 in Los Angeles, contact us today at 1-714-382-6780 for a free, private consultation with knowledgeable Los Angeles CPAs, enrolled agents, and tax attorneys.

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