The Importance of Correctly Classifying Independent Contractors
If you misclassify your workers, you can get into legal trouble with the IRS, state taxing authorities, and the misclassified worker.
The IRS is interested in how you classify your workers for one reason: revenue. Since companies don’t have to pay for workers’ compensation and FICA taxes when using the services of an independent contractor, the IRS misses out on revenue.
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