P.A.C.E. Solo W-2™ Is The Future of Employment

The IRS and Client Companies Favor W-2 Status

• Companies Are Wary of Independent Contractors
  
  
  • For a variety of valid reasons, including pressure from the IRS and other government agencies, companies want independent professionals to be employed by an employer of record, especially if they work onsite, side-by-side with company employees, where the company controls how the work is to be done. But going through an ordinary staffing vendor:
    
    
    • Disfranchises you from the tax advantages of self-employment;
      
      
    • Disfranchises you from the ability to set your own billing rates;
      
      
    • Limits you to mediocre health and retirement benefits; and
      
      
    • Seriously reduces your potential earnings.
      
      
  • This process converts independent contractors into contract employees who are then required to work through a staffing vendor in order to qualify for contract assignments at client companies.
    
    
  • Advantage to you: Employment by the unique P.A.C.E. Solo W-2™ business model makes you highly attractive to IRS-wary clients, while giving you
    
    
    • The tax advantages enjoyed by independent contractors;
      
      
    • Full control over the rates you charge and the money you earn;
      
      
    • The best group benefits package available to any independent professional anywhere in the USA;
      
      
    • The best 401(k) retirement savings plan in the USA with IRS maximum tax-deferred contributions up to $45,000 in 2007 ($50,000 if age 50+) and
      
      
    • Much higher total compensation per given billing rate than agency temps and consulting firm employees receive.

     

• Entitlements and Workplace Issues
  
  
  • Government agencies, including the Internal Revenue Service (IRS), U.S. Department of Labor (DOL), U. S. Citizenship and Immigration Service (USCIS), State Departments of Employment, Workers Compensation Commissions, State Labor Departments, the U. S. Equal Employment Opportunity Commission (EEOC), and the Occupational Safety and Health Administration (OSHA) make it their business to ensure that all workers are properly registered for public entitlements and that they are protected by rules and regulations governing the workplace. These regulations apply to regular employees. They do not, for the most part, apply to independent contractors.
    
    
  • Consequently, the IRS and other government agencies have an overriding bias that every worker in the United States should be someone’s employee.
    
    
  • Advantage to you: As an employee of P.A.C.E. you are covered by all of the entitlements, rules, and regulations that protect regular employees, but which generally do not apply to independent contractors.

 

• P.A.C.E. Division Managers Are Regular Employees
  
  
• As a P.A.C.E. Division Manager, you are a regular employee of P.A.C.E. Your earnings are reported on IRS Form W-2 just like an employee of any other company. To ensure absolute compliance with state and federal employment regulations P.A.C.E. uses the services of Automatic Data Processing, Inc. (ADP).
  
  
• ADP is the world's largest provider of payroll services and human resource information systems, offering a comprehensive range of benefits, payroll and business tax deposit and reporting, time and attendance, 401(k) recordkeeping and unemployment compensation management services to 450,000 employers worldwide. ADP pays more than 29 million wage earners worldwide each payday and issues over 40 million W-2s to U.S. employees each year.
  
  
• Advantage to you: Your payroll is processed fast and efficiently with direct deposit. Also, ADP gives you online access to your pay stubs and annual W-2 statements.

 

• Payroll and Income Tax Withholdings
  
  
• Many federal, state, and local agencies assess payroll taxes and income taxes. It is easier and far more reliable to collect payroll taxes and income tax withholdings from fewer, larger, experienced employers than from a much greater number of independent contractors. Most independent contractors are one-person operations that spend their productive time selling their services. They are not particularly adept at bookkeeping and calculating taxes.
  
  
• Thus, there is a strong bias in favor of having taxes collected by major employers. Another name for employer might as well be “tax collector” because collecting and paying taxes on your behalf is what makes someone who pays you an employer and not a client. In fact, one might argue that employers are tax collectors first, and businesses second in the eyes of most government agencies.
  
  
• Advantage to you: P.A.C.E. withholds and pays all applicable payroll taxes and income taxes, thus reducing by a factor of ten your chances of an IRS tax audit compared with you being an independent contractor.

 

• IRS Form W-2
  
  
• P.A.C.E. reports total wages and withheld taxes to the IRS on IRS Form W-2, Wage and Tax Statement. P.A.C.E. transmits this form to the IRS at the end of the year, and gives you a copy.
  
  
• You then file your copy of IRS Form W-2 with your local, state and federal income tax returns.
  
  
• Advantage to you: Filing your taxes is greatly simplified compared with filing as a self-employed independent contractor -- So simple, in fact, some P.A.C.E. Division Managers report that they are able to file their personal taxes using IRS Form 1040EZ.

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• Contact P.A.C.E. today:
  
  
  • Phone: (925) 680-0200
    
    
  • E-mail: information@pacepros.com, or
    
    
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