Difficult Times Call for a New Hiring Strategy

Here’s a strategy for eliminating payroll taxes, workers compensation insurance, minimum wage requirements, overtime and owner’s payroll administrative costs

Let’s face it, Employers today must save as much as possible when hiring workers for their businesses. The current business climate requires that we take a fresh look at requiring a potential new hire (“NH”) to establish their own legal entity, a Corporation or a LLC, and then having your business enter into an Independent Contractors Agreement with the NH Corporation or LLC. The idea is that within the Independent Contractors Agreement it will spell out the duties and responsibilities NH Corporation or LLC is to provide NH obligations to your business. But wait, there are numerous advantages to this arrangement. Please read on.

Employer Advantages:

1. Your business will not pay ANY social security, disability or unemployment taxes on any money paid to NH Corporation or LLC because none are required.

2. Your business will not be required to provide any workers compensation insurance for NH Corporation or LLC because none is required. In some states, NH Corporation or LLC will have to take steps to become exempt from workers compensation insurance or obtain its own workers compensation insurance.

3. Your business will never have to pay NH Corporation or LLC any overtime over 40 hours because none is required. It’s just what your business and NH Corporation or LLC agree.

4. Your business will not be required to pay NH Corporation or LLC any fringe benefits. It’s just what your business agrees to pay NH Corporation or LLC.

5. There are no local, state or federal minimum wage requirements. This can be very advantageous for both your business and NH Corporation or LLC because NH Corporation or LLC can agree to complete a job for a flat sum and your business will not be concerned about whether that flat sum, when factored against the amount of time it takes to complete the job, otherwise meets minimum wage requirements.

6. Your business payroll administrative costs are all but eliminated, all your business has to do now is write one check to NH Corporation or LLC for the agreed sum. No deductions are required.

7. The most important concept that always has to be taken into consideration in this arrangement is that your business must never pay the individual directly but rather only pay NH Corporation or LLC after your business is presented with an invoice.

8. As an aside, if the Obama administration has its way and there’s mandatory health care required to be provided by employers in the future in the United States, this arrangement will create a loop hole for your business to avoid providing employees with mandatory health insurance.

Employee Advantages:

What Are New Hire Corporation or LLC Advantages – Tax Deductions
NH will work towards converting what would otherwise be personal non-deductible expenses into legitimate tax deductible business expenses.

By forming a new Corporation or LLC, NH is now in business with his/her own entity. That entity has immediate cash flow. Just think of how long it takes a new business generally to establish cash flow but here NH’s entity already has a cash stream. By being in business NH Corporation or LLC will immediately be able to take many business related tax deductions not available to individuals. As a matter of fact, each day NH Corporation or LLC will strive to convert what would otherwise be non-deductible personal expenses into legitimate business expenses which will qualify for a tax deduction for NH new Corporation or LLC.

You Now Have a Plan – Work Your Plan!

Visit Spiegel & Utrera, P.A. Lawyer’s official website at www.amerilawyer.com for much more valuable information about saving money through strategic business advice and different legal strategies available to your business.

You Now Have a Plan - Work Your Plan!

Visit Spiegel & Utrera, P.A., Lawyer's official website at www.AmeriLawyer.com for much more valuable information about forming your new corporation or LLC today.

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