1099 vs. W-2: How Independent Contractors and Employees are Different in 2020

An employee typically works on-site at your business or with a designated schedule at another location, works set hours, and is compensated through your payroll system, which deducts contributions for Social Security, Medicare, unemployment, and employee benefits.

It’s important to understand how the IRS and state tax authorities define employee vs. independent contractor status. Otherwise, your company could be at risk of paying unexpected taxes and penalties. It could also face legal liabilities if a regulatory agency rules that a contractor at your business actually qualifies as an employee.

At the conclusion of the webinar, participants will be able to explain the difference between a contractor and an employee, and why it is important to know the difference. We will discuss what happens if the IRS re-classifies a contractor as an employee, and the possible relief available (called “Section 530” relief). We will also discuss the new Form 1099-NEC for reporting contract-labor pay.

Find out how to defuse that ticking bomb by joining renowned payroll expert Vicki M. Lambert, CPP for this information packed webinar! This webinar examines what the requirements are to correctly classify a worker as an independent contractor and also the requirements for when a worker must be classified as an employee.

Session Highlights:

• What classifications of workers are permitted under IRS Rules
  
• Understand the 20-point “common law” test for determining contractor vs. employee
• What are the three factors the IRS uses to determine worker status and how to apply them correctly
• Discuss the reporting implications of employee vs. contractor, such as 1099 vs. W-2, payroll taxes, etc.
• How the FLSA rules differ from the IRS rules and why you must follow both
• How does the state trump both the IRS and the FLSA on determining independent contractor status with the ABC test for SUI
• What are the latest agreements or programs being used by the IRS, DOL and the states to “find” misclassified employees
• Relief under Section 530 for IRS reclassification
• Using the Form SS-8 to your advantage to determine worker status
• Who gets a W-2 and who gets a 1099 and why it should never be the same worker
• Find out how easily a 1099 audit can be triggered and why the chances of getting one are on the rise
• What are the penalties for misclassifying an employee as an independent contractor and who assesses them.  It’s not just the IRS you have to worry about. 
• You found out you have a misclassified employee—now what?