Article Side

Online Article Directory!

Hello Guest! Login or Register to submit articles!

Tax Differences Between Contractors and Employees in New Jersey

By Kevin Thorn Subscribe to RSS | January 2nd 2012 | Views:
loading
 
  



Many businesses pay two different kinds of workers: contractors and regular employees. Come tax time, many businesses face worker classification law questions. How do they know how employees are classified for tax purposes? How do these classifications affect which taxes the employer pays?

A New Jersey tax lawyer can answer such questions and take away the guesswork for you.

Independent contractors can include dentists, accountants, freelance writers and NJ tax lawyers. In general, the person who pays the independent contractor is allowed to dictate the results of the work (i.e., the person paying a freelance writer may demand a 1,000-word article on cat taxidermy) but not the process of the work (i.e. the person paying a freelance writer has no say in whether the article is written at 3 a.m. while listening to Lady Gaga). In general, independent contractors are subject to self-employment tax.

An employee, on the other hand, is anyone who performs services for you if you have say in what work will be done and how and when it will be done. The key tax difference is, for an employee, you must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment taxes.

There also exist statutory employees and nonemployees. Direct sellers and real estate agents are always treated as self-employed for federal, tax-related purposes. On the other hand, other workers – including drivers who deliver food products or laundry (if they are your agent or paid on commission), full-time life insurance agents, pieceworkers and full-time traveling salesmen -- are always treated as employees. For Social Security and Medicare purposes, the statutory employee is considered an employee if:

● The contract states or implies that the person is the primary provider of services;

● They do not have a substantial investment in supplies to complete the job; and

● The services are performed on a continuing basis for the same payer.

Whether a statutory employee or nonemployee, follow the tax rules of the independent contractor or the employee.

If you treat a worker as an independent contractor when they are actually an employee, you may be held liable for the employment taxes of that worker as part of your New Jersey business taxes. However, if you have a reasonable basis for not treating an employee as an employee, you may be able to get relief. Consult your NJ tax lawyer. Misclassified workers may file a form to report the Social Security and Medicare taxes uncollected because of their employer; this may even result in a civil tax audit.

Kevin Thorn - About Author:
Thorn Law Group, which was founded by tax attorney Kevin E. Thorn, is an experienced law firm whose mission is to successfully represent you in sensitive tax controversies. Thorn Law Group assists clients all over the U.S. and internationally.

Share on Facebook Tweet It Stumbleupon this post This post is delicious !

Article Source:
http://www.articleside.com/business-articles/tax-differences-between-contractors-and-employees-in-new-jersey.htm

Related Business Articles Subscribe to RSS

Zadroga attorney is a life savior for the 9/11 attack victims
Published by Jennifer Weinstein on December 12th 2011 | Business
Zadroga Attorney plays a very important role in helping the sufferers of 9/11 attack in getting a re...
 
Personal injury attorney Nebraska services
Published by Mchenry1 on June 13th 2012 | Business
Being offended could be an extremely worrying thing to carry on with, particularly if you endeavor t...
 
Contact social security disability attorney to avail disability benefits
Published by Safinajones on January 12th 2012 | Business
Disability is a curse for people when it cripples life and stops working capacity. In case of emerge...
 
Learn how to choose a bankruptcy lawyer
Published by Saratremellaw on December 16th 2011 | Business
When bankruptcy stares at you, you may need legal advice to steer out of many troubles. Choosing the...
 
Why You Should Keep an attorney Tyler, TX Number on Hand
Published by Evans Baliol on November 25th 2011 | Business
You may not need an attorney Tyler, TX right now, but it’s a good idea to have the number of a goo...
 
What Comes First for Your divorce attorney, Northfield, NJ
Published by on November 28th 2011 | Business
When going through a divorce, the first thing you need to do is contact a divorce attorney, Northfie...
 
Win the case in your favor by hiring an expert Zadroga lawyer
Published by Jennifer Weinstein on January 15th 2012 | Business
The Zadroga lawyer are considered to be the best legal friend for the victims, as they have complete...
 
DWI attorney New York-justifies your stand in law suit
Published by Paxton on January 18th 2012 | Business
The levied charges are based on how much alcohol is consumed and how impaired that person appears to...
 
How to hire an affordable lawyer
Published by Govindsingh on June 21st 2012 | Business
When you talk about achieving orderliness in the society, you certainly have a lawyer in mind becaus...
 
Hire Zadroga attorney to get Zadroga claim
Published by Carl Schmidt on December 22nd 2011 | Business
In order to get your Zadroga claim in a systematic and hassle-free manner, it is best to engage the ...
 
Seek the best Personal injury lawyer NY for claiming damages & compensations
Published by Paxton on February 13th 2012 | Business
If you suffer from any form of injury (whether physical or psychological) owing to the fault of othe...
 
How to get the best divorce lawyer
Published by Parramattacitylegal on December 12th 2011 | Business
There are varied specializations in the field of law like migration lawyers, tax lawyers etc. but th...
 
Experience Dedicated services of Personal injury attorney Nebraska
Published by Mchenry1 on March 21st 2012 | Business
In such busy life, if you experience any physical injury in some sort of mishappening like accident ...
 
Zadroga lawyer is an expert in dealing with matters related to Zadroga Act
Published by Jennifer Weinstein on January 10th 2012 | Business
Without the assistance and help of an efficient Zadroga lawyer, it would be extremely difficult for ...
 
What You Need in a divorce attorney, Northfield, NJ
Published by on November 28th 2011 | Business
When looking for a divorce attorney, Northfield, NJ is a competitive market. There are a lot of lawy...
 
Learn more about Chapter 13 bankruptcy lawyer
Published by Saratremellaw on January 3rd 2012 | Business
There are two forms of personal bankruptcy as recognized by law. Chapter 13 bankruptcy is one of the...
 
Steps a Criminal defense lawyer Follow
Published by Dimitri Kontou on December 23rd 2011 | Business
A criminal defence lawyer is an authorized representative who specializes in the area of criminal la...
 
Find the best aggressive Pennsylvania DUI lawyer
Published by Abhay on March 27th 2012 | Business
Simply put, A Pennsylvania DUI lawyer is your best ally and friend when you have to answer criminal ...
 
Take the help of a social security attorney to apply for social security disability benefits
Published by Safinajones on January 6th 2012 | Business
Social security disability benefits is a scheme that is designed to help individuals with disabiliti...
 
Why do you hire a patent attorney?
Published by Adli Law on April 5th 2012 | Business
If you have realized the imperativeness of the patent attorney, have one of them in your side in ord...