For some companies, this arrangement works out well, but for others, there comes a time when bringing on additional people becomes a necessity.
Traditionally, small business hiring has meant that hired workers would be classified as employees for tax purposes.
These days, more options to partner with professionals exist largely due to the Internet, and business owners are utilizing independent contractors in place of hiring full-time employees more and more.
This can sometimes cause confusion among workers as well as business owners regarding the classification of someone who does work for a place of business.
How Hiring Choice Affects Worker Classification
Employee classification, at least on paper, comes down to the agreement you have with your workers and the tax documents you file.
A person whom your business hires as an employee is considered a W2 employee since your business will need to provide a tax form W2 to each of these types of workers at the end of the year.
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