The Internal Revenue Overhaul considers van salespeople to be common-law employees and not independent contractors. Although motorcar salesmen and saleswomen are, in a thought, running their own miniature dodge within the motorcar dealerships, the genuine to dominion the details surrounding the position are held by the dealerships, which, in turn, makes salespeople employees rather than independent contractors.
Defining an Independent Contractor
An independent contractor is a crackerjack or subcontractor who has his own livelihood and offers services to the common. Independent contractors may assignment as Individual proprietors or arrange their concern as a resident liability partnership or company. Independent contractors are identified as such sole provided the male for whom the advantage is completed has curb over single the foot consequence of the exertion and not how the exertion is accomplished.
Defining a Common-Law Employee
A common-law Worker is an lone who performs services for a biz; in this condition, a machine dealership. In the event a car salesperson is improperly classified as an independent contractor, the dealership would not be required to get health insurance or taxes for the contractor, making the salesperson solely responsible for the full cost of his own taxes and benefits. If an employee is willingly misclassified as an independent contractor by a company, the business could be liable for paying employment taxes for the contractor in question.
Social Security Implications
In the event of common-law employees, the Director controls what is done by the Worker and how said goals are reached. Yet if the employee has some freedom in her position, such as in a car dealership, she is a common-law employee because the dealership can control the details of how the job is completed.
Misclassification
Although the rules defining car salespeople as common-law employees are laid out by the Internal Revenue Service, it is possible for an employee to be misclassified.Salespeople classified as independent contractors do not have Social Security or Medicare taxes withheld from their paychecks. Additionally, in the case of independent contractors, the business is not required to contribute toward the employee's outstanding Social Security and Medicare taxes. If an independent contractor is actually an employee, which would be the case with a car salesperson, the worker can report the amount of the uncollected taxes that results from the misclassification to the IRS.
