As a small business owner you may hire people as independent contractors or as employees. There are rules that will help you determine how to classify the people you hire. This will affect how much you pay in taxes, whether you need to withhold from your workers paychecks and what tax documents you need to file.
Here are some things every business owner should know about hiring people as independent contractors versus hiring them as employees:
1. The IRS uses three characteristics to determine the relationship between businesses and workers:
" Behavioral Control covers facts that show whether the business has a right to direct or control how the work is done through instructions, training or other means.
" Financial Control covers facts that show whether the business has a right to direct or control the financial and business aspects of the worker's job.
" Type of Relationship factor relates to how the workers and the business owner perceive their relationship.
If you have the right to control or direct not only what is to be done, but also how it is to be done, then your workers are most likely employees.
2. If you can direct or control only the result of the work done -- and not the means and methods of accomplishing the result -- then your workers are probably independent contractors.
3. Employers who misclassify workers as independent contractors can end up with substantial tax bills. Additionally, they can face penalties for failing to pay employment taxes and for failing to file required tax forms.
4. Workers can avoid higher tax bills and lost benefits if they know their proper status.
5. Both employers and workers can ask the IRS to make a determination on whether a specific individual is an independent contractor or an employee by filing a Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, with the IRS.
New Mexico Contract with Veterinarian Assistant as Independent Contractor with Provisions for Termination with or without Cause Keywords: New Mexico, contract, veterinarian assistant, independent contractor, termination, without cause Description: A New Mexico Contract with Veterinarian Assistant as Independent Contractor with Provisions for Termination with or without Cause is a legally binding agreement between a veterinarian clinic or hospital and a veterinarian assistant who will work as an independent contractor in the state of New Mexico. This contract outlines the terms and conditions of the working relationship, including the rights and responsibilities of both parties involved. Under this contract, the veterinarian assistant agrees to provide services such as assisting with veterinary procedures, animal care, and administrative tasks, as required by the clinic. As an independent contractor, the assistant is responsible for managing their own schedule, taxes, and liability insurance. Provisions for termination are an important aspect of this agreement. The contract should clearly state the conditions under which either party can terminate the contract with or without cause. Termination with cause typically involves situations such as breach of contract, misconduct, or failure to fulfill obligations outlined in the agreement. Termination without cause refers to the ability of either party to end the contract without specifying any reason. Different types of New Mexico Contracts with Veterinarian Assistant as Independent Contractor with Provisions for Termination with or without Cause may include the following: 1. Standard Termination Clause: This type of contract includes a provision for termination with or without cause, allowing either party to end the agreement by providing written notice within a specified time frame (e.g., 30 days). Both parties have the right to terminate the contract for any reason or without any reason, subject to the notice period. 2. Termination for Cause Only: Some contracts may include provisions for termination only with cause. This means that the contract can only be terminated if there is a valid reason, such as a breach of contract or misconduct by either party. Both parties must provide written notice of the cause and follow the procedures outlined in the contract for termination. 3. Termination for Convenience: This type of contract allows either party to terminate the agreement without cause and without specifying a reason. However, a specific notice period and any associated penalties or fees may be outlined in the contract. It is crucial to consult with an attorney specializing in employment law to ensure that the contract terms comply with New Mexico state laws and regulations. Additionally, the contract should clearly define the scope of work, compensation structure, confidentiality requirements, non-compete clauses, and any other relevant provisions to protect the rights and interests of both parties involved in the agreement.
