Independent Contractor Vs Employee

Are you an independent contractor or an employee?

For federal tax purposes, this distinguishing between an independent contractor and an employee is important. Worker classification affects how you pay your federal income tax, social security and Medicare taxes, and how you file your tax return.

Classification affects your eligibility for employer and social security and Medicare benefits and your tax responsibilities. If you aren't sure of your work status, you should find out now.

Determine if you are in independent contractor or an employee

The courts have considered many facts in deciding whether a worker is an independent contractor or an employee. These relevant facts fall into three main categories:

• behavioral control;
• financial control; and
• relationship of the parties.

In each case, it is very important to consider all the facts - no single fact provides the answer. Carefully review the following definitions.

BEHAVIORAL CONTROL

These facts show whether there is a right to direct or control how the worker does the work. A worker is an employee when the business has the right to direct and control the worker. The business does not have to actually direct or control the way the work is done - as long as the employer has the right to direct and control the work.

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