common tax concerns
As the company grows, you'll probably need to hire employees. Some of the most common tax concerns about tax issues of employees. When you hire employees, you must file tax returns and timely pay the filing fee required.
payroll taxes are three types of taxes:
Income tax - must be refused the right amount of income tax the employee for the entire payroll of anyyear.
Social Security and Medicare or FICA - Need to retain employees from the FICA tax from each paycheck and must match that amount.
The unemployment rate or the federal tax on Fouta This fee goes to the unemployment insurance and is paid by the employer. The employee fails to pay part of the Fouta.
Always pay taxes on wages in full and on time. If not, the IRS adds to the interest andfines. Interest and penalties can quickly grow if you do not pay immediately. These costs can be enormous and can cause businesses to fail if they can not afford to pay.
Another common problem is tax misclassifying workers. Workers are usually classified as regular employees or independent contractors. Business owners have anticipated the social contributions and requirements for all their employees, but companiesowners did not deny or make social security contributions for true independent contractors.
Calling someone an independent contractor can save a lot of time observing the IRS reporting requirements. It also saves money, you do not have to share the FICA contributions of employers and not have to pay unemployment compensation. It costs a company 20 percent to 40 percent more per employee to treat them as employees. Although it may be tempted to useindependent contractors rather than employees, the IRS is well aware of the benefits of misclassifying an employee as an independent contractor and impose severe penalties for those violating the rule.
If you plan to use independent contractors and not employees, the IRS test, which lists 20 factors to determine whether a worker is an employee or contractor.
The following table provides some examples of when workers must be considered as employees or independentContracting:
Employees
Worker is trained by the employer to provide services in a particular
Worker must devote much time to the employer
Worker fixed working hours
The work is done at business premises
The company has the right to dismiss the worker and the worker has the right to leave at will.
Independent contractors
service workers are available to the general public
Workers working for different companiestime
Worker is free to work when and for whom he or she wants
The work conducted on the premises of the worker
The employee can not be terminated early, except for breach of contract.