by Sunburst Software Solutions, Inc.
Archives by Month

IRS & State Auditors Crack Down on Independent Contractors

Print Friendly, PDF & Email

While looking for a way to increase tax revenues, the IRS and many state governments are cracking down on how companies classify their workers.  If your business uses independent contractors you should get ready for new scrutiny!

You may wonder – “What’s the big deal, so what if I use independent contractors”?

Well, it’s like this…….when a you as a business owner report payments made to independent contractors – you report those wages using a 1099 form.  When payments are reported using a 1099 form, you as the business owner aren’t required to pay unemployment insurance, worker’s compensation insurance OR PAYROLL TAXES on that money.

Hiring independent contractors isn’t against the law, however, there are very strict rules about WHO/WHAT an independent contractor is and often times what you may feel is an independent contractor the IRS, the State Unemployment Department or the Worker’s Compensation Insurance people feel is an employee.

For additional information, including examples of just how serious the Auditors are about this, read this article from C N N Money.com Small Business

2 Responses to IRS & State Auditors Crack Down on Independent Contractors

Leave a Reply

About Your Host:

Nancy Smyth, Certified QuickBooks ProAdvisor

Nancy Smyth, Sunburst Software Solutions, Inc.
QuickBooks Construction & Payroll Expert


I've been using and supporting QuickBooks products since the early 1990's. I've worked with thousands of contractors, assisting them with QuickBooks setup, Certified Payroll Reporting requirements, AIA Billing and Weighted-Average Overtime.


QuickBooks is a powerful product, but learning how to use it in your construction business can be difficult. I hope you find resources available here to be helpful.

Search our site
Stay updated!

Sign up to receive our latest QuickBooks Tips, Tricks & News via email:


Enter your email address:

Delivered by FeedBurner


We promise NOT to sell, rent, or otherwise distribute your name and email address!

FREE 30-Day Trials

Request FREE 30-day Trials of QuickBooks add-ons for Certified Payroll, AIA Billing & Payroll Wage Management. Save time and increase accuracy on time-consuming error prone tasks; so you get paid on time!

Free 30 day trials of QuickBooks integrated add-ons for certified payroll, aia billing and weighted-average overtime

Certified Payroll Training:
Learn how to complete a Certified Payroll (Prevailing Wage) Report and fulfill your reporting requirements - 2 hour recorded webinar - $99.99. Click here for more info.

certified payroll requirements webinar
QuickBooks Training

Frustrated with QuickBooks?

QuickBooks Premier ContractorLearn how to get the MAXIMUM possible results from QuickBooks in your construction business! Visit our new QuickBooks training website, Learn to use QuickBooks in your construction business.

QuickBooks Time Tracking

Save 10%/FREE 14-day trial!


QuickBooks Time Tracker