Ask a CPA

Dollar cost averaging is a systematic method of investing the same amount of money regularly over an extended period of time. For example, by investing $100 a month for five years in a mutual fund, an investor will be buying the fund at various price levels. The investor should not be concerned with the day to day fluctuations of the investment, but rather the general long term trend since he will be buying the fund on the dips as well as the upward fluctuations. All mutual funds provide for a method whereby investors can have a fixed monthly amount taken out of their bank or checking account automatically to implement dollar cost averaging. Speak to a CPA in your area to set this up.

From the employer's point of view, it is always better for the worker to be treated as an independent contractor.
The employer can save Social Security taxes, Medicare taxes, workers compensation insurance, disability insurance and unemployment taxes which are all mandatory payroll related expenses.
Employers which have pension and medical benefit insurance plans cannot discriminate and must include virtually all full time employees that meet certain requirements.
For this reason it usually pays to be an employee.
However the truth is, the status of whether one can be properly treated as an independent contractor is not so clear cut.
There is a 20 factor test used to determine ones status.
Please contact a CPA in your area to ascertain how these rules apply to your situation

Yes. The federal penalties are steep.
If an owner treated the worker as an independent contractor but did not file 1099s, the IRS can levy severe penalties against you, including a 3 percent penalty for failure to withhold income tax.
You would also owe the full employer portion of Social Security and Medicare taxes plus 40 percent of the employee's portion, which comes to 8.68 percent for Social Security and 2.03 percent for Medicare.
Please consult with a CPA in your state to determine any state penalties which could be assessed.

You only have to pay Worker's Compensation for independent contractors who do not have their own coverage of Workers Compensation insurance. They should provide a certificate of insurance to the "employer" to show evidence of their own coverage. Workers Compensation laws vary from state to state, but generally speaking these laws protect the employer as well as the worker. Anyone injured on the job will be covered and the employer is generally protected from lawsuits arising from injury on the job by an employee.

Yes. Section 530 of the Internal Revenue Code provides an exclusion that pertains to a worker who is not treated as an employee.
The exclusion mandates that: that the employer never treated the worker as an employee; did not hold out any other worker holding a similar position as an employee; filed form 1099 in a timely fashion for that worker; and had a reasonable basis for treating the worker as an independent contractor.

The only tax advantage to being treated as an independent contractor is that your business expenses are not subject to a 2% limitation of your adjusted gross income. The self-employment taxes you pay are net of any business expenses. Independent Contractors who are sole proprietors must file Schedule C.

Although you should have received a Form 1099, there is no excuse for not reporting income you earned during the year.
The burden of reporting is your responsibility, whether you receive a Form 1099 or not.
The penalties for failure to report income can be severe and can be deemed criminal in the worst of cases. Always report all income earned.

There are three safe harbor provisions: judicial precedent, failure of the IRS to question the status in a prior audit, and industry practice.
To qualify for Safe Harbor protection, you must satisfy just three requirements: you must have filed all required 1099-MISC forms reporting to the IRS your payments to the workers in question you consistently treated the workers involved and others doing substantially similar work as ICs, and you had a reasonable basis--that is, a good reason--for treating the workers as Independent contractors.

Weight-loss programs are not deductible unless related to a specific medical condition and recommended by your doctor.

Long-term capital gains are generally taxed at lower tax rates than those on wages and other ordinary income.
In general, if you are in the 15% tax bracket, the long-term capital gains tax rate is 0% (tax free).
If you are in tax brackets exceeding the 15% bracket, the long-term capital gains tax rate is 15%.