1099 vs W2 | IRS Cracks Down on Employee vs Contractor Rules

1099 vs W2 | IRS Cracks Down on Employee vs Contractor Rules

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The IRS made a recent announcement on the factors that determine if a worker is an employee or contractor.

The reason being is that a lot of businesses are misclassifying their employees as contractors in order to avoid payroll tax obligations.

Doing so, could land your business in major trouble with the IRS, including paying hefty fines.

In this video, I breakdown what makes a worker an employee and what makes a worker a contractor.

I'll also go over the tax reporting requirements of both and how you can stay out of IRS trouble.

Watch to learn more.

Outline
Intro: (0:00)
Categories to consider when deciphering between 1099 vs W2: (1:18)
Consideration #1: (1:34)
Consideration #2: (2:59)
Consideration #3: (4:40)
Tax implications: (7:21)
Employee tax responsibilities: (7:30)
Contractor tax responsibilites: (8:47)
How to reclass contractors as employees: (9:45)

Suggested video to watch next: How to Pay Your Employees in a Small Business https://youtu.be/kkdZcoUzPrI

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Disclaimer: The information provided in this video is for informational purposes only and is not meant to take the place of professional legal, accounting, or financial advice. If you have any legal questions about this video or the subjects discussed, or any other legal matter, you should consult with an attorney or tax professional in your jurisdiction (i.e. where you live).