This Simple Difference Could Cost You Thousands in Taxes…

What’s the difference between an employee and a subcontractor?

Entrepreneur Network partner Mark J. Kohler understands why business owners hate asking this question: It’s tedious. Rather than properly examine the difference, many business owners choose instead to take a shortcut and simply label everyone in question a subcontractor, giving them a 1099 tax form and washing their hands of the whole situation.

However, being sloppy on state and federal tax forms can be dangerous. If your subcontractors turn out to be employeees instead, you could be on the hook for a lot more money than you realize.

Click play to learn about how you can tell the difference between an employee and a subcontractor and save yourself the time, energy and money that cutting corners could cost in the long run.

Related: Should You Invest in a Self-Employed Pension?

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Mark J. Kohler

MARK J. KOHLER is the author of The Business Owner’s Guide to Financial Freedom (Entrepreneur Press 2017), as well as The Tax and Legal Playbook and What Your CPA Isn’t Telling You from Entrepreneur P…

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