Is the person working for you an employee or independent contractor?  This question comes up often. Typically start-up businesses will want to treat as many workers as possible as independent contractors, so they don’t have to deal with payroll taxes, and other fringe benefits. However, is this approach correct?  The IRS would rather has every worker treated as an employee as they would receive more payroll taxes which include social security and medicare. Also the employer is required to withhold federal and state income taxes and remit them to the government.  Well this topic has been discussed often.  For a starting point, review the IRS website at http://www.irs.gov/businesses/small/article/0,,id=99921,00.html.  This will provide you with a brief understanding of the issue and links to other related areas. Continue reading →