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Contractor or employee: What's the difference?

from CBS MoneyWatch

Here’s a warning to small business owners who routinely use contractors. The owner of a home care services agency contracted with 35 workers to provide services to her customers. An IRS audit determined that the workers she paid were actually her employees, not independent contractors. The tax agency then demanded that she pay federal employment taxes, including the employer portion of Social Security taxes and federal unemployment tax. more


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