IRS Classifications

Do you pay individuals to provide services for your business?  If so, it’s good to know the IRS’s point of view (IRS Classifications) so you can assess the situation.  Even if your contractors are only working a few hours a week or month, or are seasonal there is a good chance you have not classified them correctly.

There are many online resources on this topic but here are few quick requirements:

Employee Classification

  • Do you instruct the worker about when, where and how to work?  – EMPLOYEE
  • Do you train the worker?  – EMPLOYEE
  • Do you provide tools or equipment? – EMPLOYEE
  • Does he/she do the work on your premises? – EMPLOYEE

Contractor Classification

  • The worker is free to work when and for whom they choose – CONTRACTOR
  • The worker hires, supervises and pays their assistants – CONTRACTOR
  • The worker makes their services available to the general public – CONTRACTOR
  • The worker provides their own tools, equipment or facilities to provide the service – CONTRACTOR

Do you need to re-classify someone as an employee or set-up payroll?  Do you need to collect the appropriate forms for hiring and paying Independent Contractors or need to file 1099’s?

Tiger Accounting & Bookkeeping Services can assist with these needs!