Employee or Independent Contractor?

If you need additional hands to help run your business, here are several things to consider before you hire.

*The IRS uses three characteristics to determine the relationship between businesses and workers: Behavioral Control (whether the business has a right to direct or control how the work is done through instructions, training or other means); Financial Control (whether the business has a right to direct or control the financial and business aspects of the worker's job); and Type of Relationship (how the workers and the business owner perceive their relationship).

*If you have the right to control or direct not only what is to be done, but also how it is to be done, then your workers are most likely employees.

*If you can direct or control only the result of the work done -- and not the means and methods of accomplishing the result -- then your workers are probably independent contractors.

*Employers who misclassify workers as independent contractors can end up with substantial tax bills. Additionally, they can face penalties for failing to pay employment taxes and for failing to file required tax forms.

*Both employers and workers can ask the IRS to make a determination on whether a specific individual is an independent contractor or an employee by filing a Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, with the IRS.

You can learn more about the critical determination of a worker’s status as an Independent Contractor or Employee at IRS.gov by selecting the Small Business link. Additional resources include IRS Publication 15-A, Employer's Supplemental Tax Guide, Publication 1779, Independent Contractor or Employee, and Publication 1976, Do You Qualify for Relief under Section 530? You may also request these forms and publications by calling the IRS at 800-829-3676 (800-TAX-FORM).

Green Equivalents

For this month's "green living" post, I found some interesting tidbits that show how effective green living can be.

*Every house in the US that changes all their light bulbs to CFLs = taking 1 car off the roads

*Turning off you computer at night (rather than using Sleep mode) = about $0.04 a day (about $15.00 a year)

*Showers use about 1/2 the amount of water as baths. Every 1 minute you shorten your shower = about 5 gallons of water saved

*Every house in the US paying their bills online = 18 million trees saved every year

*Thermostat adjustment: Every 1 degree lower in the winter or higher in the summer = about 10% annual savings on your energy bill

If you keep your car tires properly inflated, your car will travel more miles on less gas.

Going to a car wash uses less water than washing your car at home (and it takes less time & personal energy!!)

Together, we CAN make a difference!