So you’ve made all your employees independent service providers as opposed to staff members to conserve pay-roll tax obligations you’ve been paying. It seemed like a wonderful concept.
The New Voluntary Classification Settlement Program In late September 2011, the Internal Revenue Service IRS released a brand-new tax obligation alleviation program that might aid you settle your previous employee category concerns and also come tidy at a reasonably inexpensive to you [News 2011-64] This becomes part of a bigger Fresh Start campaign to assist company taxpayers clear up their tax obligation financial debts from the misclassification of employees called the brand-new Voluntary Classification Settlement Program VCSP. Under the program, qualified companies can acquire remedy for previous government pay-roll tax obligations if they deal with employees as staff members moving forward.
That is qualified? To be qualified, you have to:
– Consistently have actually dealt with employees in the past as non-employees
– Filed all called for Forms 1099 for the employees for the previous 3 years
– Not presently be under IRS audit
– Not presently be under audit by the Department of Labor or state firm worrying the category of employees
What will the tax obligation alleviation program price you? Companies approved right into the New Voluntary Classification Settlement Program will certainly pay approximately one percent of the incomes paid to the reclassified employees for the previous year. What are the advantages of the tax obligation alleviation program? The advantages are substantial. You’ll pay no irs tax relief programs charges. And also you will certainly not be examined on pay-roll tax obligations connected to these employees for previous years. Pay-roll tax obligation charges are massive as well as can conserve you thousands. What else will the tax obligation alleviation program expense you? For the very first 4 years under the program, you will certainly go through an unique 6 year law of restrictions, instead of the common 3 years that relates to pay-roll tax obligations.