The following is a list I have created inside my coaching group. It is a great reference guide that will really help put some major facts out there for you if you are considering independent contractors or employees. It is something that every business should read. This isn’t my opinion. It is based on actual data that is out there. I just gathered it all in one place for you.
I highly encourage you to contact me with your questions and I can help lead you in the right direction to get your answers.
In the first half of 2014 numerous pet sitting companies allowed me a look into their business to help show the world what going through their audit was like. The following is a list for your quick reference. Below are more articles full of more valuable articles so you can’t say you didn’t know! 🙂
Audits Do Happen.
http://jumpconsulting.net/case-study-audit-60k-mistake-rattled-pet-sitting-businesses-structure/
—–> This case study shows how a “small” pet sitting company who was audited ended up costing her $60K that shook up her whole world. She had to switch from ICs to Employees and the damage was personal, business, and emotional. NOTE: That the same people who “advised” her on how to structure her ICs had no say in the matter when the State audited her. Nor, did they pay her penalties, fines, and back taxes.
How Having A Good CPA Can Help You Pass An Audit:
http://jumpconsulting.net/2014/04/21/case-study-pet-sitting-audit-team-helped-business-pass-flying-colors/
—–> This case study shows how a team of experts (CPA) helped this business owner pass her audit with flying colors. She had employees and her CPA took care of the rest. She did have to pay her CPA to speak and defend the company to the Auditors.
ICc Should Have a Workmans Compensation Policy On Themselves According To This Audit:
http://jumpconsulting.net/2014/04/03/case-study-pet-sitter-audit-independent-contractors-compliance/
—–> This case study the business’ ICs were found not to be in compliance because the individual ICs did not have a Workman’s Compensation policy on themselves. The fine was tiny, as the yearly business revenue was under $50K but had it been a bigger business, it could have been worse. They did change to employees.
If You Are Audited Once, Chances Are, You Will Be Audited Again.
Another Double Audit:
—–> This pet sitter was also audited twice by the State. The first time, she did everything they said to do. The second time, they faulted her for the changes that they told her to make. Crazy, huh? The pet sitter cites the federal administration that was in power at the time. This pet sitter did a LOT of research. Knew everything inside and out. But still, was slammed by the State. Be sure to read the ending of this study where she shows how her classification helped save her business! It will make you think!http://jumpconsulting.net/2014/03/27/case-study-pet-sitting-business-audit/
Audit Costing Over $25k!
How The Money Is Collected Lead To ReClassification Here:
Did You Know?
The IRS program that will let you switch your ICs to Employees without the threat of an Audit EVER!
Hi Bella!
Hope you are doing well. I just hired my first employee. Yay me! I will be sitting down with my lawyer to get a few more questions answered and to make sure I am doing things right. I did have a phone consult earlier. However, I am confused about what I need to compensate my employee for. My inclination was to pay her per job, but I recently read that employees need to be compensated for time traveled between jobs. This is a state and federal law. I live in MD. I was curious if this is the practice you follow with your employees or is there some loophole that applies here in our particular field?