Employee or Independent Contractor?
This is the question that gets a wrong answer more than any other!
All too often business owners assert that they are hiring an individual for “1099 work,” or as a “1099 employee.” These assertions come with the related inference that by simply making the decision to report a worker’s earning to the federal government using a particular form, a potential employer may unilaterally deem that individual to be an independent contractor. This is not the case and when the Department of Labor disagrees with the treatment, the employer will be subject to fines that are far greater than the costs of employment.
To answer the question correctly, there are three factors to consider:
- Supervision – the service provided is outside the usual course of the business and is not supervised by the hiring entity
- Direction – the contractor sets their own schedule, pays their own expenses, assumes risk
- Control – the individual is engaged in their own established business, with proof of advertising, business cards and offers services to other businesses
If the above factors do not describe the relationship than the individual is an employee and must be compensated based on the established laws.
For many small businesses, hiring employees and managing payroll compliance feels daunting but it really is simple with the appropriate support and guidance.
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some of our clients
“A testimonial? five words.... there is no one better.”
“It is hard to believe we have worked with Carter CPA for over 40 years, originally with the founder, Jerald Elkins, and then with Jodi Carter for the past twenty years. We have had a relatively complicated tax situation stemming from one of us being a salaried employee, the other a business owner and our many ventures into real estate investments, both residential and commercial. Additionally, we have been primary residents of four different States over the years. Despite this and the changing tax laws on real estate and other investment strategies, Carter CPA has maintained the necessary expertise and advice that has allowed us to optimize our tax situation. The transition in technology over the years was extremely smooth and the service has remained at the highest levels. Carter CPA is defined by the word "professionalism.”
“I have been very fortunate to have Carter CPA by my side during the development of my new business. Jodi and her team have guided me through all of the financial and organizational challenges of a start up. Their knowledge and support has been instrumental, and I look forward to growing together. They truly understand my vision, and are proactive in helping me achieve my goals.”
“I am a free-lance medical writer and a children's book author -- now on the edge of retirement. For me, tax preparation was complicated and disorganized. For Jodi Carter, not at all. For many years now she has me orderly, and amused rather than confused about my taxes. Jodi has organized my financial transactions and transitions, shaped up the IRS for me, and has always been responsive to my questions and concerns — even if they are silly. Of all the "services" I have that make my life easier, Carter CPA tops the list.”
“For over 20 years, we have had great confidence in the services we have received from Carter CPA. Most recently, Jodi introduced us to the firm’s Financial Planning Services. She paired us with a Certified Financial Planner that is part of her team and together, they have been instrumental in developing a well balanced financial plan for our retirement. They are quick to respond to all our questions and concerns and most importantly we feel they truly have our best financial interest in mind. They are an impressive team and always a delight to work with.”
“A number of years ago, a close friend referred Jodi Carter to me when I need a good tax advisor. I have continued to work with her as I've found both her accounting and her communication skills to be excellent. More recently, when I needed help with financial planning and estate planning, she made recommendations of people and a process that has worked out extremely well. Spearheaded by Jodi, I now have a coordinated team of top professionals working diligently on my behalf.”
“Jodi is the consummate professional. In more than 20 years of working with her, I've learned to trust her implicitly, and she functions as the CFO for my two businesses. Her work and advice are invariably terrific, her responsiveness is unmatched, and her up-do-date systems enhance my business efficiency. It's exactly what you want in a CPA.”
“As a performer and consultant that I have been a long term “legacy” client working with Carter CPA, LLC for over 20 years. They have prepared my yearly taxes with a high level of expertise, great efficiently, accuracy and speed for so many years my gratitude cannot be overstated.
I would whole heartedly recommend Jodi Carter and the team at Carter CPA LLC to any individual or company for their financial needs."
“Going through a divorce is emotionally and financially exhausting. Jodi and her team were extremely patient and helpful. They advised me about my finances, put together a monthly budget, prepared my taxes, reviewed my interim agreement and tax implications. I am finally on track and able to plan for my future wisely with their guidance.”