Employee vs. Independent Contractor – Seven Tips for Business Owners

FROM http://www.danielstoica.com/:

Employee vs. Independent Contractor – Seven Tips for Business Owners

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 seven 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.

2.  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.
3.  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.
4.  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.
5.  Workers can avoid higher tax bills and lost benefits if they know their proper status.
6.  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.
7.    You can learn more about the critical determination of a worker’s status as an Independent Contractor or Employee at IRS.gov by selecting the Small Business link.  Additional resources include IRS Publication 15-A, Employer’s Supplemental Tax Guide, Publication 1779, Independent Contractor or Employee, and Publication 1976, Do You Qualify for Relief under Section 530? These publications and Form SS-8 are available on the IRS website or by calling the IRS at 800-829-3676 (800-TAX-FORM).

Eight Tips To Lowering Real Estate Tax

FROM http://www.danielstoica.com/

Real estate and property taxes are different in each state and city. Nearly three-fourths of our country’s home owners pay over half of their mortgage payments to real estate taxes every year. In several states, the taxes on property and real estate make up for the fact that the state does not charge income taxes. Other states have high property taxes simply because they can take advantage of the taxpayers, at least, that is what the residents of those states claim. A real estate broker will hire someone to determine if a home has been over appraised by taking into account the number of bathrooms and bedrooms a home has, the age of the home, the quality of construction on the home, the square footage, and if there are any up-scale amenities nearby.
Many home owners overpay for their homes. Now is the time to learn about lowering real estate taxes. If you look at the American Homeowner’s Association, you will find an abundance of information about your home, such as, the number of bedrooms and bathrooms your home has, the lot size, your home’s square footage, and so much more. Following is a list of things you can do to help lower your property taxes.
1. Go to your tax assessor’s office and request a copy of your real estate tax rate card. This card will have information regarding your home and will show what improvements have been made to your property. Make sure there are no errors. If there are, get them corrected right away.
2. Don’t make any improvements on your home just before it is assessed, especially if you will need permits. Improving on your home will increase your property value, which will increase your taxes.
3. Make sure you know what home improvements will cost you in taxes. Call the tax assessor’s office to find out how much more your taxes will be if you make home improvements.
4. A beautiful and well maintained home will raise the value of your home. Try not to “beautify” your landscape too much, as it will also raise your taxes.
5. Find out how much your neighbours pay in taxes. If your home is assessed much higher than theirs, ask the assessor’s office why. You can also ask for your home to be re-assessed.
6. If the assessor comes to your home and needs to look around, let him or her. They will always use the highest rate if they cannot properly assess your property. If you have made improvements and they find out about it later, you could be penalized with higher taxes anyway.
7. When the assessor does come to your home, point out what work needs to be done. They generally take into account the improvements that have already been completed and base their rates on those. They won’t look at a cracked foundation or a roof that needs repairs. If they are able to look at the things that still need work, your taxes may be less.
8. If you still believe your property taxes are too high, ask the assessor’s office how to challenge the assessment, or ask for your home to be re-assessed. There is a formal process to appealing the assessment.