The IRS & Independent Contractors – BEWARE!

No doubt you’re fully aware of the need to hire only certain types of companies as Independent Contractors for tax reporting purposes rather than employees.

You might also be aware that if the IRS reviews the facts regarding the worker’s status, the employer can be held liability for all Federal employee taxes including: federal income tax which should have been withheld, FICA and Medicare, both employee and employer portion.

However, the most recent newsletter from the AIPB (American Institute of Professional Bookkeepers) says that “if the employer failed to send a 1099 to a worker it used as an IC (independent contractor) its liability for the employee’s taxes double.”

If in the past you have been somewhat cavalier about capturing every trade contractors W-9 information, DON’T BE. Clean up your act this year and produce 1099s for EVERYONE who is not an employee or incorporated.

Don’t put it off till January 30th – do it now!

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