Tax Penalty of Compan Y Employee Versus Contract Worker

Employers misclassifying players could be subject to large penalties [APA shop]: The American Payroll Associations (APA) ordinal Annual Congress included a virtual store called Employee or Independent ContractorHow to Determine a Workers Status. The shop was conducted by Steve Hodgson, CPP, who is APAs Director of Payroll Training. Hodgson noted that employers that misclassify employees as nonemployees or independent contractors leave alone face substantial financial penalties as the result of not withholding income tax, flunk to withhold and lolly employment taxes, and failing to bill the correct reports and returns with the IRS, Social surety Administration (SSA), and state government agencies. The IRS penalization for unintentionally failing to withhold national income tax is 1.5% of the wages paid. This assessment is divalent to 3% if the employer failed to file an information return (Form 1099-MISC) for the worker with the IRS. The IRS penalisation for unintenti onally not withholding the employees share of Social hostage measure and Medicare taxes is 20% of the employees share of the tax. The penalty is doubled to 40% if the employer failed to file an information return for the worker with the IRS.

If an employer intentionally misclassifies the worker as an independent contractor, even after determining that an employer-employee alliance exists, the in a higher place penalties do not apply, and the employer is liable for the full amount of federal income tax that should confirm been withheld, and 100% of the employees and employers share of Social security department and Medicare taxes. An employer misclassifying workers will also be subject to state penalties. ex conduct facto emp! loyment benefits. An employer that misclassified workers as independent contractors may have to retroactively pay employment benefits in addition to employment taxes. In 1996, a federal appeals court held that Microsoft Corporation, which had agreed to reclassify freelancers as employees after an IRS employment...If you want to get a full essay, range it on our website: OrderEssay.net

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