Employee or Independent Contractor?

  • Thread starter GrassRoots Lawn Care
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GrassRoots Lawn Care

I am building my business and can already foresee a need for hired help. A guy to help mow, a guy on trimmer and a guy or two for light landscaping and sod work. The added expense of taxes and worker's Comp. is outrageous. I remember my first job in this feild I worked for someone else and was listed as a Ind. Contractor. I would like to hire on some men as Independent Contractors. I've read that the IRS redflags businesses that list employees as IC's. These are the criteria they use to determine and IC vs. an employee:<p>-An IC has own tools and set own hours.<br>-An employee takes direction from employer.<p>Is there anyway to hire on help as IC's? Suppose they have own tools and are free to set hours? They would still have to take direction from me. What a bunch of mess. Any and all help/advice will be appreciated.<p><p>----------<br>Mike Reynolds,<br>GrassRoots Lawn Care, Florida

Tony S

LawnSite Member
Webster MA
This is a very fine line. Talk to your CPA<p>----------<br>&lt;img src=&quot;http://www.angelfire.com/biz2/procut/index/sign.jpg&quot;&gt;<p><p><font size="1">Edited by: Tony S

bill phagan

Mike,<p>There are numerous primary guidelines set by the IRS for IC's. You are not allowed to give them direction, set their work hours, have them use your tools, pay their insurance as just a few. Afraid you'll have to bite the bullet on this one. You do not want to go through an IRS audit. Believe me.<p>Bill Phagan<br>Green Ind Consulting, Inc.


LawnSite Member
Upstate NY
I am not in the lawn business but I am a small business owner. I have found a good accountant to be incredibly valuable. A good one will keep you out of trouble and save you way more then he charges. A really good one will show you ways to save big money on taxes. <br>There is no way around paying taxes and paying workman comp, SS, ETC for employees but there are a number of legitimate benefits you can give your self and family. For instance, you can give your self (as a employee of your company) health and dental benefits. That means these costs are paid for with pre tax dollars You save about 25%. There are a lot more. <br>Is your truck a company truck? It should be. You then pay no income tax on money you spend to keep it running.


LawnSite Bronze Member
South Bend, IN
Mike:<br>Since you will be biting the employee bullet sometime in the future, get your federal employer I.D. number now. If not yet ready to hire, write &quot;FOR INFORMATION ONLY&quot; on the application. This will get you the number, but you will not have to file reports yet. Then when you do hire your first employee, just call IRS to activate your number. This save one more little hassle when you first hire someone. <p>----------<br>Jim<br>North central Indiana


LawnSite Member
Atlanta, GA area
We tried the IC route on start-up many years ago. Turned out to be an absolute disaster. For 6months we dealt with PA dept of labor, IRS, and Pa dept of revenue. Be smart, bithe the WC bullet if you have to, and stay legal.

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