employer Archives - Blau Company Accounting & Tax Preparation

Template: Worker Classification/Independent Contract vs. Employee

The question of whether a worker is an independent contractor or employee for federal income and employment tax purposes is a complex one. It is intensely factual, and the stakes can be very high. If a worker is an employee, the company must withhold federal income and payroll taxes, pay the employer's share of FICA taxes on the wages plus FUTA tax, and often provide the worker with fringe benefits it makes available to other employees. There may be state tax obligations as well. These obligations don't apply for a worker who is an independent contractor. The business sends the [...]

Aaron Blau, EA, CPA2013-11-26T21:28:01-07:00November 26th, 2013|Business Tax|Comments Off

Template: Accountable Plans

An accountable plan is one under which you reimburse your employee for employment-related expenses. The employee is requiredto “adequately account” for the expenses. This means you must receive an expense record (account book, diary, expense statement, etc.) along with receipts and other documentation indicating the expense amount, time and place, business purpose, and business relationship to anyone else involved (e.g., a client, supplier, etc.). For the plan to qualify as an accountable plan, it must also require the employee to pay back any excess payments received. For example, say you pay $1,000 under an expense account arrangement and the employee [...]