Tax Strategies for the Small Business Owner: Reduce Your Taxes and Fatten Your Profits

Employees, Payroll Taxes, and Benefit Plans

When you hire staff, have you hired an employee or an independent contractor? There’s a huge difference in how each is treated for taxes. Chapter 12 looks at employees and independent contractors, and how each is reported. This chapter also covers the required compensation for an S-corporation shareholder-employee. Payroll taxes are covered in Chapter 13 (both employer and employee taxes). I examine medical expenses and retirement plans in the final two chapters of Part III.