The third biggest mistake entrepreneurs make is business owners misclassifying employees as independent contractors. Worker classification is important. If someone doing work for you meets the IRS’ definition of an employee, that means you must withhold income taxes and pay Social Security, Medicare taxes, and unemployment tax on their wages – things you don’t have to do for independent contractors. Trying to avoid these costs by treating an employee as an independent contractor means the government is losing money it is otherwise entitled to, and you could be subject to hefty fines and penalties. As soon as you start hiring, find an attorney who can help you do everything by the book.
Book a Business Development Strategy Session with Reid Council Law Firm to ensure that your employees are properly classified. Visit http://www.reidcouncillaw.com or call (215) 258-4620 today.