WELCOME
WELCOME BACK. WHEN IT COMES TO EMPLOYOEES VERSUS 4@INDEPENDENT
CONTRACTORS WHAT IS THE
DIFFERENCE. THERE MAY BE MORE 4@
MUCH MORE THAN YOU REALIZE.
CHRIS HARPER AN INSTRUCTOR AT
GRAND VALLEY STATE UNIVERSITY
AND SENIOR MANAGER WITH
HUNGERFORD NICHOLS IS 4@HERE TO
EXPLAIN EMPLOYEE VERSUS
INDEPENDENT CONTRACTOR. SO
WE'RE TALKING ABOUT YO4@UR TAXE
RIGHT. WE ARE ALTHOUGH REALLY
IT COULD EXTEND BEYOND TAXES 4@@
SOMETIMES YOU MAY NOT REALIZE
WHETHER YOU'RE CLASSIFIED AS AN
EMPLOYEE OR A CONTRACTOR UNTIL
YOU GET 4@HIT WITH A BIG TAX
BILL. OR MAYBE YOU TRY TO FILE
FOR WORKER'S COMPENSATION
BENEFITS OR UNEMPLOYMENT
BENEFITS AND THEN IS THE POINT
WHER4@E YOU REALIZE I WAS NOT 4@
EMPLOYEE. SO WHAT TYPE OF. NOW
GIVE ME AN EXAMPLE OF WHAT JOB @
YOU MIGHT HAVE TO WHERE THERE'D
BE SOME CONFUSION WITH THAT.
WELL I'LL TELL YOU WHAT'S BEEN
POPULAR LATELY AND I WAS JUST
TALKING WITH PRODUCER DENISE
GETTING HER GROCERIES DELIVERED
OR MY SISTER DOES THIS GROCERY
DELIVERY 4@SHIPPED RIGHT. OK. S
SHE IS AN INDEPENDENT
CONTRACTOR OR LET'S SAY YOU ARE
UBER OR LYFT DRIVER RIGHT.
HOOOWEEE WOULDN'T YOU KNOW THAT
THOUGH YOU'RE NOT OR SHOULDN'T
YOU KNOW THAT YOU WOULD HOPE 4@
YOU'RE NOT AN EMPLOYEE OF UBER
OR LEFT YOU'RE AN INDEPENDENT
CONTRACTOR RIGHT. AND THAT'S
WHY I THINK A GOOD BEST
PRACTICES 4@TO CONFIRM AT THE
BEGINNING OF ANY EMPL4@OYMENT
RELATIONSHIP. 4@HOW WILL I BE
CLASSIFIED? OK? A GOOD CLUE IS
IF YOU FILE A FORM W FOR 4@THAT
IS GOING TO BE INDICATIVE IN AN
CLASSIFIED? OK? A GOOD CLUE IS IF YOU FILE A FORM W FOR 4@THAT IS GOING TO BE INDICATIVE IN AN@
EMPLOYMENT RELATIONSHIP W NINE
THEY'RE TREATING YOU AS AN
INDE4@PENDENT CONTRACTOR. SO WH
IF YOU'RE WORKING FOR A MOM AND
POP? LET'S SAY I'M GOING TO
MAKE THIS UP? SAY YOU'RE
WORKING FOR A MOM AND POP A
BOOKSTORE. OK. AND WHAT IF THEY
GIVE YOU THE OPTION TO BE AN
EMPLOYEE OR AN INDEPENDENT
CONTRACTOR 4@HAVE AT THE
BOOKSTORE. WHAT ARE THE PROS
AND CONS NIMA. I 4@WANT TO. WE
DID DISCUSS THIS BEFORE I THROW
YOU OFF ARE THERE ARE THERE
PROS AND CONS TO BOTH? WELL
SURE? AND YOU KNOW MOM AND POP
BOOKSTORE YOU KNOW THEY MIGHT
PREFER TO HAVE YOU TREATED AS
AN INDEPENDENT CONTRACTOR 4@THE
PERSPECTIVE BECAUSE THEY DON'T
HAVE TO WORRY ABOUT
UNEMPLOYMENT TAXES. 4@THEY'RE
HALF OF THE SALLOT SEAT SO
SECURITY MEDICARE TAX 4@IS REAL
HALF PAID BY THE EMPLOYER
HTTPWWW BY THE EMPLOYEE. OK 4@S
THEY MIGHT WANT TO PUSH THAT
ONTO YOU. SO ONE OF THE
DISADVANTAGES OF BEING AN
INDEPENDENT CONTRACTOR FROM
YOUR PERSPECTIVE RIGHT IS YOU
GET TO PAY BOTH TH4@E EMPLOYEE
AND THE EMPLOYER'S PORTION. SO
FROM MY 4@PERSPECTIVE IT'S BETT
FOR ME TO BE AN EMPLOYEE IN
THAT SITUATION. YEAH. THAT'S
ONE FACTOR. NOW OF COURSE ONCE
YOU'RE AN INDEPENDENT
CONTRACTOR YOU'RE REALLY
RUNNING YOUR OWN BUSINESS. SO
EXPENSES THAT WO4@ULD OTHERWISE
CONTRACTOR YOU'RE REALLY RUNNING YOUR OWN BUSINESS. SO EXPENSES THAT WO4@ULD OTHERWISE@
BE NON DEDUCTIBLE AND YOU COULD
TRY TO DEDUCT THOSE ON YOUR
INCOME TAX RETURN. 4@SO 4@HOW D
YOU MAKE? HOW DO YOU MAKE THE
RIGHT DECISION? YOU YEAH. 4@AND
THE IRS HAS A NICE LIST OF YOU.
THERE IS NO ONE BLACK AND WHITE
ANSWER YOU KNOW IT'S FACTS AND
CIRCUMSTANCES. THINGS LIKE DO
THEY CONTROL WHEN DO YOU WORK
AND HOW ARE YOU GOING TO
ACCOMPLISH YOUR WORK? DO THEY
PROVIDE TOOLS OR FACILITIES 4@
THERE. AND HOW BIG DOES YOUR
HOME OFFICE HAVE TO BE TO 4@WRI
OFF YOUR MORTGAGE. RIGHT.
BECAUSE I'VE HEARD THAT'S A BIG
DEAL. HOME OFFICE CAN BE A
LUCRATIVE DEDUCTION IF YOU
QUALIFY FOR IT. BECAUSE IT HAS
TO BE A CERTAIN SIZE 4@FDAS. IT
HAS TO BE SIMPLY USED FOR YOUR @
EXCLUSIVELY CAN'T BE THEY CAN'T
BE THIS END OF YOUR COUCH OR
THAT CORNER KITCHEN TABLE. YES
IT'S A SEPARA4@TE AREA OF YOUR @
HOME. YOU KNOW ONE THING I WANT
TO MAKE SURE PEOPLE UNDERSTAND
THOUGH IS THIS IF YOU ARE AN
INDEPENDENT CONTRACTOR YOU
REALLY NEED TO DO TAX
PROJECTIONS AN4@D CONSIDER THE
NEED FOR 4@QUARTERLY ESTIMATED
PAYMENTS. OTHERWISE YOU CAN
HAVE A HUGE BAD SO YOU DON'T
WANT TO WAIT TILL THE END OF
THE YEAR YOU WANT TO BE
THINKING ABOUT THIS EVERY
QUARTER EVERY QUARTER BECAUSE
YOU KNOW IT'S ONE 4@THING TO OW
WITH YOUR TAX RETURN. BUT IF
YOU HAVE NOT PAID ENOUGH 4@DURI
THE YEAR YOU COULD HAVE
UNDERPAYMENT PENALTIES. 4@THE
GENERAL RULE IS YOU WANT TO PAY
100 PERCENT OF THE PREVIOUS
YEAR'S 4@TAX OR 90 PERCENT OF T
CURRENT YEAR'S TAX BUT IF YOUR
INCOMES ABOVE ONE HUNDRED AND
FIFTY THOUSAND A YEAR THAT
HUNDRED PERCENT BECOMES 110
WHICH IS ALL THE REASON TO HIRE
A CPA TO HELP YOU. ABSOLUTELY.
OK. WE'RE RUNNING OUT OF TIME
CO4@MPANY.4@ WE CAN TALK ABOUT @
ALL THE TIME. IT'S JUST
FASCINATING. YOU HAVE SO MUCH
KNOWLEDGE TO SHARE. WE
APPRECIATE IT. REMEMBER THESE
ARE JUST GENERAL TIPS AND
ADVICE IF YOU HAVE QUESTIONS
ABOUT YOUR SPECIFIC SITUATION
PLEASE CONTACT YOUR FINANCIAL
ADVISER AND YOU CAN FIND ALL OF
THESE TIPS ON OUR WEB SITE 13