Like many other folks, I'm sure, I entered our office NCAA college basketball pool. I guess now that we're down to the Final Four, my picks are the absolute dictionary definition of Busted Brackets. Indiana? Out! Kansas? Out! Gonzaga? Out! Now I'm trying to figure out how to lessen my pain. Is there any way I can deduct my initial "investment" ($50)?
P.T., South Bend
IRS) comes a'calling. And speaking of the IRS, we'll bet they'd love to know who won your office pool!
As a small-business owner, it's very confusing to me when it comes to classifying the people who work for my company part time or only "as needed." Do I treat these individuals as employees or independent contractors?
G.C., via e-mail
This is a tough call for many businesspeople since the misinformation about employee or independent contractor status is abundant, annoying and mostly anecdotal (such as, my brother-in-law knows a guy who ... ). We turned to Jared Weidner, a CPA who is employed by Weidner & Co., CPAs in Plymouth for input. Weidner writes: "There are three main areas the IRS looks at when determining the classification of workers: behavioral control, financial control and the relationship of the parties involved. Questions to ask include 1. Does the business tell the worker how to perform the job? 2. Does the business determine what to pay the worker? 3. What is the worker's investment in the business? No single question or factor determines the classification. All factors must be considered together. Merely stating in a contract that a worker is an independent contractor is not sufficient. The facts and circumstances of each individual case must be analyzed." Continuing, Weidner notes, "With provisions of the Affordable Care Act beginning to take effect, businesses are looking to lower costs. One way this is accomplished is by treating workers as independent contractors to avoid the requirement to provide insurance to employees as well as minimizing payroll taxes. The IRS is aware of this and has greatly increased the number of auditors scrutinizing employment classifications. The penalties for misclassification can be severe. It is advisable to seek proper counsel when determining worker classification." Publication 1779 ( yes, that's an IRS effort in this area, not the year the Cubs last won the World Series) is a two-page read that adds to the excellent response provided by Weidner. It can be found at www. irs.gov.
Note to readers
Still not ready to file? Having trouble getting your stuff together? Panic setting in? Check next week's column for some thoughts on what to do if you can't file by the end of the day on April 15.
Tax Talk is written by Ken Milani, professor of accountancy at the University of Notre Dame, and Claude Renshaw, emeritus professor of business administration at Saint Mary's College. It will appear in the Tribune's Business section on Sundays until April 14. Send your questions via e-mail to email@example.com or firstname.lastname@example.org, or snail mail to The Tribune at 225 W. Colfax Ave., South Bend, 46626. Questions cannot be answered personally, but Tax Talk will try to reply to as many as possible in the column.