No Result
View All Result
  • Home
  • Business
  • Marketing
  • Finance
  • Home and Garden
  • Education and Career
  • Fashion and Beauty
  • Health
  • Tech
  • Home
  • Business
  • Marketing
  • Finance
  • Home and Garden
  • Education and Career
  • Fashion and Beauty
  • Health
  • Tech
No Result
View All Result
No Result
View All Result
Home Finance

Why Misclassified Contractors Pay More in Taxes

by Wilfred Shah
in Finance
0
0
SHARES
58
VIEWS
Share on FacebookShare on Twitter

Misclassified contractors often do not even know that they have been misclassified. You might not have heard any of this terminology before you got hired, and you need to be aware of how businesses can skirt tax rules and save money by calling you a “contractor” instead of an “employee”. You might be shocked by how much the company saves and how much you need to pay because of this simple change in classification.

The Employer Avoids Several Different Taxes Related to Your Employment

When you are misclassified by your employer as a “contractor” instead of an “employee”, they do not need to pay several different taxes. The business is not on the hook for payroll taxes, Social Security taxes, Medicare taxes, and unemployment taxes. Once you stop paying those taxes as an employer, you can save 40-60% on each employee. This is why contractors should ask for more money to make up for the difference.

Employees Do Not Get the Full Hourly Rate

Full “employees” do not get their full hourly rate because taxes are withheld from their paychecks. While this might sound like a problem, the “employee” does not need to worry about paying taxes at the end of the year. This difference is where some people decide they do not want to work as an independent contractor.

But Contractors Do Not Have Taxes Withheld

Contractors do not have taxes withheld, and their employers do not pay a portion of their payroll taxes. You need to save up for all the taxes that were not withheld during the year, and you are not getting help from anyone. At best, you need to take more deductions during the year because you might work from home, claim other expenses, and keep records of everything you spent for work.

You Report Income for Taxes Even if You are Paid in Cash

Even if you are paid in cash as a contractor, you must report your income. Your employer might not report your income if you are a contractor, but that income should be accounted for either way. This is another burden that contractors have that “employees” do not.

You May Need to Contact the IRS

Contact the IRS if you believe you have been maliciously misclassified. This is very important because you do not want your employer to get away with this if you thought they were helping pay your taxes during the year. At the very least, have an employment lawyer read over your contract before you sign.

Be Careful When You Take A New Job

You should be careful when taking a new job. You need to know if you are classified as an “employee” or a “contractor”. Some people love being a contractor because they can set their own hours and manage quarterly tax payments. Others need to be on a W-2 so that their employer will help them with taxes during the year, they have job security, and they get closer to a refund at the end of the year.

Previous Post

5 Essential Marketing Techniques for Academic Institutions

Next Post

6 Things to Know When You Are New to Nursing

Wilfred Shah

Wilfred Shah

Senior Editor

Next Post
6 Things to Know When You Are New to Nursing

6 Things to Know When You Are New to Nursing

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Recommended

The Special Touches That Can Make You Feel At Home In A Care Home

The Special Touches That Can Make You Feel At Home In A Care Home

12 hours ago
Real Talk About Finding a Home in the Algarve, Portugal

Real Talk About Finding a Home in the Algarve, Portugal

1 day ago
Pain Induced Insomnia Can Impact Overall Recovery Time

Pain Induced Insomnia Can Impact Overall Recovery Time

3 days ago
Why Lagos Is One of the Algarve’s Most Captivating Places to Find Your Next Home

Why Lagos Is One of the Algarve’s Most Captivating Places to Find Your Next Home

3 days ago
My Journey Through Moncarapacho, Olhão, and the Algarve Rental Scene

My Journey Through Moncarapacho, Olhão, and the Algarve Rental Scene

3 days ago
The Strategic Role of Quality Assurance in Software Development

The Strategic Role of Quality Assurance in Software Development

1 week ago
Boosting Structural Integrity in Architecture through Expert Masonry Services

Boosting Structural Integrity in Architecture through Expert Masonry Services

1 week ago
Learn How To Buy House In OAE Without Law Issues and get OAE loans for it

Learn How To Buy House In OAE Without Law Issues and get OAE loans for it

4 years ago

Get Blogo is a web magazine platform. Our aim is to provide trending information. So that, our readers get benefited from this website. Our team is here to provide the latest news and information on different topics.

Category

  • Animals
  • Apps & Software
  • Automotive
  • Biography
  • Business
  • Celebrity
  • Education and Career
  • Electronic & Gadgets
  • Entertainment
  • Fashion and Beauty
  • Finance
  • Fitness
  • Food and Recipes
  • Gaming
  • Health
  • Home and Garden
  • Instagram
  • Jobs and Services
  • Law
  • Lifestyle
  • Love and Relationship
  • Marketing
  • Miscellaneous
  • News & Politics
  • Nursing
  • Outdoor
  • Parents and Children
  • Politics
  • Real Estate
  • Reddit
  • Social Media
  • Sports
  • Tech
  • Tips and Tricks
  • Travel
  • TV Shows
  • Writing
  • Trending
  • Comments
  • Latest
Drew Pritchard Wikipedia – Wife, Divorce and Antique

Drew Pritchard Wikipedia – Wife, Divorce and Antique

March 7, 2023
Catherine Southon Wikipedia, Cancer, Husband and Children

Catherine Southon Wikipedia, Cancer, Husband and Children

July 15, 2024
Catherine Southon Wikipedia, Cancer, Husband and Children

Catherine Southon Wikipedia, Cancer, Husband and Children

0
Drew Pritchard Wikipedia – Wife, Divorce and Antique

Drew Pritchard Wikipedia – Wife, Divorce and Antique

0
The Special Touches That Can Make You Feel At Home In A Care Home

The Special Touches That Can Make You Feel At Home In A Care Home

May 21, 2025
Real Talk About Finding a Home in the Algarve, Portugal

Real Talk About Finding a Home in the Algarve, Portugal

May 20, 2025
  • About
  • Team
  • Privacy Policy
  • Editorial Policy
  • Terms & Conditions
  • Contact

Copyright © 2025, Get Blogo

No Result
View All Result
  • About
  • Contact Us
  • Disclaimer
  • Editorial Policy
  • Get Blogo – Web Magazine
  • Home 4
  • Home 5
  • Privacy Policy
  • Team
  • Terms And Conditions

Copyright © 2025, Get Blogo