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Can I hire employees as independent contractors to save money on taxes in Missouri? What are the requirements?

Hiring Employees as Independent Contractors in Missouri

In Missouri, it is illegal to misclassify employees as independent contractors to avoid paying taxes and other benefits [1.1]. Employers who hire independent contractors must ensure that the workers meet the requirements for independent contractor status.

To determine whether a worker is an independent contractor, the Missouri Department of Labor and Industrial Relations considers the following factors [1.1]:

  • The extent of control the employer has over the worker’s work
  • Whether the worker is engaged in a distinct occupation or business
  • The degree of skill required for the work
  • Whether the worker supplies the tools and equipment necessary to perform the work
  • The length of time the worker is employed
  • The method of payment, whether by time or by the job
  • Whether the work is part of the employer’s regular business
  • Whether the parties believe they are creating an employer-employee relationship

If the worker is determined to be an employee, the employer must withhold taxes from the employee’s wages and pay the employer’s share of Social Security and Medicare taxes [2.4].

Conclusion

It is illegal to misclassify employees as independent contractors in Missouri. Employers must ensure that workers meet the requirements for independent contractor status. If the worker is determined to be an employee, the employer must withhold taxes from the employee’s wages and pay the employer’s share of Social Security and Medicare taxes.

Therefore, you cannot hire employees as independent contractors to save money on taxes in Missouri.

Source(s):
Jurisdiction

Missouri