Contractor Vs. Employee: The IRS Tests You MUST Know to Avoid Penalties

Описание: If you pay anyone to help in your business — even one-off projects — you must understand the difference between a contractor and an employee. Misclassifying workers is one of the most common (and expensive) compliance mistakes business owners make, and the IRS loves to crack down on it.

In this video, Andrew (CPA & Partner at Ledgerly) breaks down the real IRS rules behind worker classification, why simply “calling someone a contractor” doesn’t make them one, and how the financial, behavioral, and relationship tests determine whether a worker is truly independent.

You’ll learn:
-Why business owners can’t just choose contractor status
-The three IRS control categories: financial, behavioral, and relationship
-Why giving contractors employee-like treatment destroys your position
-How missing documentation (W-9, scope of work, proof of other clients) puts you at risk
-Real examples showing when a worker MUST be an employee
-How to protect your business from payroll audits, back withholdings, and penalties

If you’re hiring VAs, editors, admin help, laborers, or project-based workers — this applies to you. Understanding the classification rules now will save you from expensive corrections and IRS scrutiny later.

📲 If you need help determining worker status or want contractor compliance systems built for your business, book a call with us — and make sure to subscribe for more weekly tax game!

#TaxTips #TaxSavings #TaxPlanning #TaxStrategy #TaxAdvisor #TaxAdvisory #ContractorVsEmployee #WorkerClassification #SmallBusinessCompliance #PayrollTaxes