
Episode #22
The 3-Part IRS Test for Every Contractor on Your Team
A signed contractor agreement only protects you if the way you work with that person matches it. The IRS has a clear test for this, and it's better to run it now than to find out during an audit. In this episode of CEO Numbers Network, I walk through the IRS three-part test for deciding whether someone on your team is a contractor or an employee. The three factors are behavioral control, financial control, and the working relationship. Getting the classification wrong can mean back payroll taxes and back benefits, plus penalties and interest. Since we're heading into the fourth quarter, this is also the time to plan for moving team members onto payroll as of January 1. You will learn how to test each working relationship against the three factors and how payroll taxes change for you and your team when a contractor moves onto payroll. If you have ever wondered whether someone on your team should be a contractor or an employee, this episode gives you a clear way to decide before year-end. Discover how our bookkeeping services can help you make team decisions with confidence: here Key Takeaways 0:00 Intro 2:21 The Three-Part IRS Test 4:31 The Auditor Test and Next Steps 7:35 Tax Impacts and Payroll Changes 9:02 Recap and Final Advice Resources Book a strategy call with Danielle's team at Kickstart: here Check your books here Visit the Kickstart website Follow us on Instagram Listen next Why Your Contractor's W-9 Can't Wait Until January 3 Questions That Separate a CEO From a Business Owner

