|
  |
|
|
Defining Independent Contractors Versus Employees
The IRS defines an employee as someone you hire to perform work. You specify when, where, how much work, what they get paid. You supply the place of work, all the tools, and everything relevant to the job. The employee just shows up. An independent contractor, on the other hand, works for nobody but themself. They are responsible for getting new business, for negotiating a contract with a willing business owner (hence the use of the word "contractor"), supplying their own tools, materials and transport in the discharge of the services of that contract. In essence, they are simply a business-to-business relationship. The gray areas crop up when part-time work is involved. If someone works at an employers premises 50 hours per week, 5 days per week, all year, and not for any other business, they are almost always going to be classified by the IRS as an employee. It would be hard to justify otherwise. If someone works only sporadically, and brings their own tools or equipment to bear on the project, and has other "clients" they serve, then they have a strong case of being independent, and being classified that way. What's the difference? It's a big one. An employee carries all the overhead and regulatory baggage of payroll taxes, workman's compensation, benefits such as medical, vacation, sick pay, etc. An independent contractor? None of that. An employee has to be treated with kid gloves if considering termination. An independent contractor? Nope. An employee may be entitled to participate in the company 401k retirement program. More expense to the business. An independent contractor? Sorry. When in doubt, seek counsel. At least from your accounting professional, if not an attorney. And GET EVERYTHING IN WRITING. The more you document, the less likely you are to run into trouble down the road when the IRS comes calling.
|
Free Tax Guide
No reactions yet.
Please login or sign up to rate this intel.
Please login or sign up to add a comment.
The copyright for this content entitled "Defining Independent Contractors Versus Employees" has been specified by the contributor as:
All Rights Reserved
This content may not be copied, distributed or adapted by anyone under any circumstances.
|
 |
May, 2012
2008
January, February, March, April, May, June, July, August, September, October, November, December
2009
January, February, March, April, May, June, July, August, September, October, November, December
2010
January, February, March, April, May, June, July, August, September, October, November, December
2011
January, February, March, April, May, June, July, August, September, October, November, December
2012
January, February, March, April, May
|
|
Not a member yet?
Qondio is a powerful network for making it online. If you have a website to
promote, we can help.
Sign up and get in on the action.
|
|
Welcome to Qondio! Discover the awesome power this network can deliver by going to our About page. Or you could skip straight to the Sign Up form.
|
|
