Dear Barb,
I have my recruiters all working on a 1099 and at a recent conference I heard you say that they may not qualify as an independent contractor. Can you explain further?
Stephen Z. New Orleans, LADear Stephen,
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Talk this over with your accountant and go to IRS.gov and print out the various requirements which must be met in order for someone to qualify as a 1099 employee. If they do not meet 100% of the qualifications listed, you need to deduct payroll taxes. Better safe than sorry.
Barbara J. Bruno, CPC, CTS
This question needed more than a 50 word response. This is one of the top concerns for any person who owns a firm. Anyone who has consulted a CPA on this matter will get a different shade of grey every time. And the response “better safe than sorry” isn’t feasible or realistic for many owners without an influx of cash or a substantial line of credit to transition consultants to employees. Peel back the onion- It’s not just the IRS, local state Labor Boards can have a secondary and problematic viewpoint. How about information to protect firm owners and help create ethical and meaningful protocol to abide by the law and safeguard the firm from litigious circumstances?
A fantastic question was asked- Hoping for more follow-up in the future.