Ending Soon! Save 33% on All Access

This Simple Difference Could Cost You Thousands in Taxes Take the time to clearly define your employees and subcontractors.

By Mark J. Kohler

Opinions expressed by Entrepreneur contributors are their own.

What's the difference between an employee and a subcontractor?

Entrepreneur Network partner Mark J. Kohler understands why business owners hate asking this question: It's tedious. Rather than properly examine the difference, many business owners choose instead to take a shortcut and simply label everyone in question a subcontractor, giving them a 1099 tax form and washing their hands of the whole situation.

However, being sloppy on state and federal tax forms can be dangerous. If your subcontractors turn out to be employeees instead, you could be on the hook for a lot more money than you realize.

Click play to learn about how you can tell the difference between an employee and a subcontractor and save yourself the time, energy and money that cutting corners could cost in the long run.

Related: Should You Invest in a Self-Employed Pension?

Entrepreneur Network is a premium video network providing entertainment, education and inspiration from successful entrepreneurs and thought leaders. We provide expertise and opportunities to accelerate brand growth and effectively monetize video and audio content distributed across all digital platforms for the business genre.

EN is partnered with hundreds of top YouTube channels in the business vertical. Watch video from our network partners on demand on Amazon Fire, Roku, Apple TV and the Entrepreneur App available on iOS and Android devices.

Click here to become a part of this growing video network.

Mark J. Kohler

Entrepreneur Leadership Network® VIP

Author, Attorney and CPA

Mark Kohler, M.PR.A., C.P.A., J.D., is a highly respected Founding and Senior Partner at KKOS Lawyers, specializing in tax, legal, wealth, estate, and asset protection planning. With a reputation as a YouTube personality, best-selling author, and national speaker, Kohler is dedicated to guiding clients through complex legal and financial landscapes to achieve their American Dream. He also serves as the co-founder and Board Member of the Directed IRA Trust Company and has launched the Main Street Certified Tax Advisor Program to train CPAs and Enrolled Agents nationwide. As the co-host of The Main Street Business Podcast and The Directed IRA Podcast, he simplifies intricate topics like legal and tax strategy, asset protection, retirement, investing, and wealth growth. Mark Kohler's commitment to helping entrepreneurs and small business owners attain success and financial security has made him a trusted expert in the field, benefiting countless individuals and businesses in navigating the financial and business world with confidence.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

More from Business Taxes with Mark Kohler

The 12 Tax Days of Christmas: Day 12

The 12 Tax Days of Christmas: Day 11

The 12 Tax Days of Christmas: Day 10

The 12 Tax Days of Christmas: Day 9

Business News

TikTok Reportedly Laid Off a 'Large Percentage' of Employees as the App's Fate in the U.S. Remains Unclear

Laid-off TikTok employees were notified Wednesday night through Thursday morning.

Business News

More People Are Exploring Entrepreneurship Because of This Unexpected Reason

More new business applications were filed in 2023 than in any other year so far.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Personal Finance

This Investment Bundle Includes a Trading Course and Stock Screener Tool for $150

Approach the stock market with an increased understanding.

Leadership

8 Subtle Hints that People Don't Respect You — and How to Fix Them

While you have to earn respect, you don't have to deal with disrespect in the meantime.