Business

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If you are an eligible employer (defined below), you may be eligible for a 35% tax credit for health insurance premiums paid on behalf of your employees.

 

An eligible employer is an employer who:

 

>>> Covers at least 50% of the cost of health care coverage for some of its workers based on the single rate

 

>>> Has less than the equivalent of 10 full-time workers; partial credit is given for employers with between 10 and 25 full-time equivalent workers

 

The internal Revenue Service has released a new form that will help employers claim the special payroll tax exemption that applies to many newly-hired workers during 2010, created by the Hiring Incentives to Restore Employmnet (HIRE) Act signed by President Obama on March 18.

 

If you are a small business owner, whether you hire people as independent contractors or as employees will impact how much taxes you pay and the amount of taxes you withhold from their paychecks. Additionally, it will affect how much additional cost your business must bear, what documents and information they must provide to you, and what tax documents you must give to them.

 

Here are the top ten things every business owner should know about hiring people as independent contractors versus hiring them as employees.