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Do you have an independent contractor or an employee?I have found some Business Owners are like Pinocchio, they will “obtain” someone to do the work and pay them via 1099. Why not? It is easier and they avoid the additional payroll taxes.

This can be a COSTLY “easy” way out!

Federal and State Governments are watching Small Businesses for this infraction. In the past, Small Businesses have slid under the radar, but recently there has been an increase in small business audits and this trend is going to continue.

In many cases, business owners are paying like they have an independent contractor…

but in reality they have an employee.

Why would the government take the time to find me – a small business?

1. They are losing money
2. Federal taxes fund Social Security and Medicare
3. State taxes fund Disability, Family Leave and Educational programs


Employee paid $15/hr for 30 hour week = $450
Total taxes collected (apx 22%) =              $101           $5,252/yr
Total Employer portion of above tax =         $52             $2,704/yr
These calculations are for informational purposes and based on New Employer State Rates.

Would you rather pay the ER portion of taxes based on payroll or pay 3X (or more) in Penalties and Interest PLUS pay the back taxes?

Note: if you hire a true Independent Contractor they will pay Self Employment Tax.


Common Sense distinction says: if you direct the worker on how, where, when and what work is being done – they are an employee.

An Independent Contractor An Employee
• receives compensation for services without withholding taxes

• is liable to report compensation and pay taxes based on the Form 1099 they will receive in January

• receives pay for time worked and taxes are withheld; business submits taxes on their behalf

• the business is also liable for a portion of Federal and State taxes

• this person will receive a Form W2 in January

The business legally and directly controls only what must be done The business will direct and control what must be done and how it is done

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Today the concern is “when they find me do I have the right paperwork to qualify my decision?”

I urge you to contact your Accountant, Payroll Company or Systematic Office Solutions for more information. Do not take this lightly, it is a viable situation that may cost you thousands of dollars.

If you call our office, we will supply a checklist to help determine if your worker is classified as an Employee or Independent Contractor. We will also provide the necessary paperwork to record this decision.

This is a great time to celebrate, BUT . . .


Are you ready?

…don’t forget about tax season looming in the near future.

Deadlines for certain tax information arrive quicker than you think. Some of them are in January!

Here are a few things that you need to think about IN DECEMBER to prepare for the year end.

Read more »

Work/Life IMbalance??Do you find that you planned an activity for your family but when the day comes, nothing is ready?  Do you blame it on too much work?

Do you find that a project deadline is next week and you haven’t worked on it yet?  Do you find yourself saying I’m too busy or I’m only one person?

Most people feel that they can’t keep up with both Home and Business, especially those who are Solopreneur.

Following these simple steps in both “worlds” will help you to manage your tasks (time) and be more efficient with your work and home life. Read more »

As an entrepreneur, you were excited about starting your own business – all the personal time you were going to have with your family – able to work on your own schedule.  Then reality hit you in the face.  Starting and running a business is not easy, as you know it takes TIME and DEDICATION to keep you motivated.  Sometimes when I’m talking to clients and friends, I picture in High School when you selected a certain class because it was the “easy A” or “slide through class”.  Some entrepreneurs have this same feeling about starting a business.  Don’t get me wrong, part of the joy of working for yourself is that you don’t have to clock in and work someone else’s schedule.  You are the business owner – you can design your business to be what you want.
biz-plan

Design a business?

YES!  What vision do you have for your business?  What are your goals for your business?  Creating a Business Plan is the best way to construct or design your business.  Would you build a house without a plan?  Would you take a road trip without GPS?

I know that creating a Business Plan is arduous, but when you take the time, you will learn more about your marketplace and possible risks.  Planning will keep you from wandering blindly and relying on luck.  Planning will keep you efficient with your money and staff.  Ultimately, if you need to seek financing from your bank or other venture, you will need to present a business plan.  Read more »


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