Hiring Medical Staff, Employees As Independent Contractors
In Construction Hiring Independent Contractors – Can get very expensive very fast!
Every Construction Company Owner – Is doing whatever they can to survive and thrive in these tough economic times in 2012 and we here to support and hopefully help you stay out of trouble where we can.
The Badly Misguided Idea – That you can save roughly thirty percent (30%) on your payroll costs in payroll taxes by hiring construction workers as independent contractors is one of the worst ideas every conceived.
A Lot Of Bad Ideas – Are circulated at the Business Round Table, the little round table at the tavern with a pitcher of beer and several glasses being held by contractors, curbstone lawyers and Bad Bookkeepers who like to hold “Kings Court” and pass out bad advice on how to run construction businesses.
Unfortunately Nobody In – These meetings seem to realize that opinions from experts cost money and that is why anyone with any real knowledge rarely ever attends these meetings.
In Most Cases Free Advice – Is worth what you pay for it, nothing. Except in the case of the Business Round Table, this is the one place where the advice carries a heavy and painful price.
One Common Method – Discussed at the Business Round Table is for the contractor to require that anyone who wants to work at their construction company to get a business license in the city or county where the contractor’s business headquarters is located. The contractor tells the worker “Since you will not have any taxes taken out I can pay you less and you will still make more money than anywhere else”
Leverage Is Great – Until the stick breaks!
In Washington State – There have been a number of cases where this practice has cost the contractor in fines, penalties, legal fees and lost time from work many times what they saved in payroll taxes. It is the same in all states, it simply does not pay!
One Way Contractors – That are treating employees as independent contractors are discovered is quite by accident, literally. In Washington State when the “independent contractor” sustains a job related injury and requires medical attention. It does not matter if the need is immediate and life threatening or something that can wait and be checked out after work.
When The “Independent Contractor” – Is faced with paying for their medical expenses out of pocket they are often encouraged by the clinics and hospitals to contact The Department of Labor and Industries and “suddenly discover” the Big Bad Contractor forced them into becoming an “Independent Contractor”.
Medical Clinics And Hospitals – Prefer to deal with government agencies because they know there is a better chance of being paid. So naturally it is in their best interest to shift the burden of medical costs to the contractor and ultimately to the Department of Labor and Industries wherever possible.
And So It Begins – The contractor has a lot of explaining to do, there are potential fines, penalties, back taxes, interest and possible investigations by The Department of Labor and Industries, The Employment Security Department, U.S. Department of Labor, local and state agencies and The IRS. This is because everybody smells blood in the water and they are all looking for back taxes and your money, bank accounts, homes, trucks, cars and equipment if that is what is deemed appropriate.
In Addition – It could eventually trigger an IRS audit where the IRS demands a copy of your QuickBooks file! And then things could get Un-Bear-Able!
In Some Cases – The IRS has made business owners have been forced to pay ALL OF THE EMPLOYEE AND EMPLOYER PAYROLL TAXES PLUS PENALTIES AND INTEREST!
The Answer Is Simple – Play it straight in everything you do! Play the construction game to win! Play by the rules, pay your taxes, give to Caesar what is Caesar’s (Tax Agencies), live easy and breathe the air of freedom.
For The Contractors That – May have fallen into the trap of hiring Independent Contractors there is an answer:
- Make a decision to set thing straight and get on the winning side of the construction game.
- It will be clearly understood that our job is to help you come clean with the tax agencies and get your business turned around. In most cases the tax agencies are very workable in these situations and they want to help.
- We will do everything we can to help you get straightened out and we will start with reviewing and cleaning up your bookkeeping files no matter what you have, QuickBooks, Peachtree, Excel, Shoeboxes, File Boxes, Dashboard of your truck or any other software.
- With Expert Xero Bookkeeper Sydney CBD, you will be kept fully informed every step of the way.
When You Become A Client – Then we can tap into our resources of knowledge and strategy banks. We use the reports hidden in your QuickBooks in order to diagnose and understand your construction business and develop plans and help you implement a path to success for you and you alone because every contractor has unique Strengths, Weaknesses, Opportunities and Threats (S.W.O.T. Analysis) that when understood can lead to a Strategic Roadmap which cannot help but make a lot of money.