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HR Snapshot: Can an employee submit a new W-4 at any time?

October 23, 2017 at 6:51 pm

That’s a good question. And the answer is yes!

An employee may submit a new W-4 anytime they have changes. Often, they’ll submit a new form when they know they’ll be changing exemptions, adjustments, deductions, or credits on their return.

For example, an employee may want to increase their withholding by decreasing the number of dependents they claim. Or they might want to add dependents to decrease the amount withheld. Life events such as marriage, divorce, and childbirth are common reasons to update a W-4, but employees can generally change their withholding allowances at any time and for any reason.

According to the IRS, employees who are making changes due to a divorce (if they’ve been claiming married status) or for any event that decreases the number of withholding allowances they can claim should submit a new W-4 within 10 days.

After a W-4 is received, the new withholding amount should be put into effect no later than the start of the first payroll period ending on or after the 30th day from when the employee submitted the replacement Form W-4.

Categories: Uncategorized.

IRS outlines ways employees can also serve as contractors

October 13, 2017 at 1:36 pm

From the latest HR Snapshot:

Q:  Can the same person be both an employee and an independent contractor?

A: According to IRS guidelines, it is possible to have a W-2 employee who also performs work as a 1099 independent contractor so long as the individual is performing completely different duties that would qualify them as an independent contractor.

Some legitimate examples that we have seen of this circumstance are:

  • A Receptionist also owns a cleaning service business with their spouse. The company contracts with the team to perform janitorial services after hours for the office.
  • A Sales Manager also performs graphic design work for several local businesses after hours. The company contracts with the individual to create a new logo for the company.
  • A Maintenance Technician also owns a fabricating business of their own. The company contracts with the individual to fabricate equipment for the company.

An employee owning their own business is not a requirement, but rather one of the factors to consider when determining if someone may be properly classified as an independent contractor. If you feel confident in the IRS criteria on the whole, you may classify their separate work as independent contractor work. But, be sure! It is widely believed among tax professionals that having a worker receive both a W-2 and 1099 increases the likelihood of an IRS audit.

If you’d like to learn more about the IRS test for independent contractor classification, you can watch our 2-Minute HR Training on the topic or check out the Independent Contractor Classification Guide on the HR Support Center.

Categories: Uncategorized.

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