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Business Preparation Employees
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Whether you hire employees or not to help you in your mobile car wash and detailing business is ultimately dependent on your resource needs to achieve the level of growth you desire. By having employees you, as the employer, also have a new set of responsibilities to withhold.
In addition to providing employee pay and benefits, as an employer you will also be required by state and federal laws to withhold certain deductions for each employee you have on staff. These withholding amounts can add up. Many employers choose to hire independent contractors instead.
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Unfortunately, simply outsourcing all of your labor to independent contractors can cause problems down the road. If, in the eyes of the IRS, these independent contractors should have actually been treated as employees, you, as the employer, will likely face stiff fines, interest penalties and back-taxes.
If you need temporary work to satisfy a short-term surge in customer demand, going the route of independent contractors (“temporary help”) is probably a safe bet. However, if your independent contractors are doing your wash and detailing work in a long-term relationship, you may have a problem since the IRS will most likely consider these employees.
If your business is at the point where you need help getting the work done, we suggest setting up a meeting with your accountant to discuss employee options. Getting started on the right foot with the IRS, your employees, and independent contractors will help you avoid hassles down the road.
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