54 tagged with "Independent Contractor"
Contractor payments, 1099 tracking, and compliance
Section 530 Safe Harbor: How Businesses Survive IRS Worker Reclassification Audits
Section 530 of the Revenue Act of 1978 blocks the IRS from assessing back payroll taxes on reclassified 1099 workers if a business proves reasonable basis, substantive consistency, and reporting consistency. Revenue Procedure 2025-10 now requires examiners to consider the relief first and sets 25% / 10-year thresholds for the industry-practice safe harbor.
Surviving the Workers' Comp Premium Audit: A Small Employer's Field Guide to NCCI Class Codes, Officer Elections, Overtime Carve-Outs, and Subcontractor Traps
Workers' compensation premium is recalculated every year using your actual payroll, and unprepared small employers routinely owe five-figure true-ups. This guide walks through the NCCI premium formula, the standard exception rules, the overtime carve-out math, owner and officer exclusion forms, the subcontractor COI rules that trigger the largest audit hits, and how to dispute a Final Audit Statement.
California AB5 and the ABC Test: Classifying Workers, Using the B2B Exemption, and Surviving an EDD Audit
A working guide to California AB5, the three-prong ABC test, the Borello and business-to-business exemptions, and EDD audit exposure that can reach $25,000 per willful misclassification — plus a practical compliance workflow for small businesses.
DOL Independent Contractor Final Rule: The Six-Factor Economic Realities Test and What Small Businesses Must Document in 2026
The 2024 DOL Independent Contractor Final Rule and its six-factor economic realities test still govern FLSA worker classification in private lawsuits despite the May 2025 enforcement pause. Small businesses that misclassify employees face back wages of two to three years, liquidated damages, civil penalties above $2,300 per violation, and IRS payroll tax exposure—risks that clean bookkeeping and contemporaneous documentation are built to defend against.
The NIL Tax Trap: What College Athletes (and Their Parents) Owe on Endorsement, Collective, and Revenue-Sharing Income
How NIL endorsements, collective payouts, and House v. NCAA revenue sharing are taxed in 2026—Schedule C mechanics, the 15.3% self-employment tax, multi-state jock-tax filings, and the planning moves that keep April manageable for college athletes and their families.
VCSP and Form 8952: Reclassify Contractors as Employees for About 1% of Back Payroll Taxes
The IRS Voluntary Classification Settlement Program lets eligible employers reclassify 1099 workers as W-2 employees for roughly 1.068% of last year's compensation, with no interest, no penalties, and no employment-tax audit of prior years on those workers.
The 24% Backup Withholding Trap: A Small Business Guide to W-9s, CP2100 Notices, and Form 945
Backup withholding forces payers to deduct 24% from contractor payments after a missing W-9, refused TIN, or CP2100 notice — here is the 15-day and 30-day cure clock, Form 945 deposit rules, and the onboarding setup that keeps small businesses out of the trap.
The 1099 Threshold Just Tripled to $2,000: What Small Businesses Should Actually Do About It
The 1099-NEC and 1099-MISC reporting threshold rises from $600 to $2,000 for payments made in 2026 under the One Big Beautiful Bill Act. Backup withholding still kicks in at the same threshold, the 1099-K bar resets to $20,000 plus 200 transactions, and most states have not adopted the federal change—so vendor recordkeeping matters more, not less.
EITC for Self-Employed Workers: Claim Up to $8,046 in 2025
Self-employed filers can claim the federal Earned Income Tax Credit on Schedule C net earnings, with a 2025 maximum of $8,046 for families with three or more children. This guide covers eligibility thresholds, how to compute earned income (including the half-SE-tax adjustment), the documentation that survives an audit, and the pitfalls that disqualify otherwise valid claims.
Section 530 Safe Harbor: How Small Businesses Can Defend Worker Classifications
Section 530 of the Revenue Act of 1978 eliminates back federal employment taxes on misclassified contractors when small businesses pass three tests — reporting consistency, substantive consistency, and reasonable basis. Revenue Procedure 2025-10 updated the rules in January 2025, the first major change in 40 years.
Independent Contractor Misclassification: The 2024 DOL Six-Factor Test and How to Stay Compliant
Total exposure per misclassified worker now commonly lands between $15,000 and $100,000 once federal back taxes, FLSA back wages with liquidated damages, and state penalties stack. Here is what the 2024 DOL final rule changed, how the IRS and state ABC tests differ, and how Section 530 and the VCSP can cap retroactive liability.
Form W-9 Demystified: The 2026 Guide for Freelancers, Contractors, and Small Businesses
Form W-9 collects your taxpayer ID so payers can issue accurate 1099s. The 2026 OBBBA raised the reporting threshold from $600 to $2,000, and the IRS released a revised form. This guide explains the line-by-line mechanics, the single-member LLC mistake that triggers backup withholding, and the recordkeeping habits that keep January boring.