Many businesses would
rather pay independent contractors than employees to avoid paying payroll
taxes and fringe benefits. In fact, many people would rather be independent
contractors in order to take advantage of some tax advantages. It can be win-win.
But be careful since the
IRS look closely at who is and who is not an independent contractor. There
are 20 factors that must be considered to determine independent contractor
status. No special weight is given to any one of the factors.
- Few instructions are
given about how, when and where the work is accomplished.
- Little training is provided.
- Services are not integrated
with the company's operations.
- You are not required
to perform the services personally.
- You hire, supervise,
and pay assistants.
- Your relationship with
the company is not continuing.
- You set your own working
hours.
- You do not work full-time
for the company.
- You do not work at the
company's location.
- You set the steps in
which the work will be done.
- You are not required
to submit written or oral reports.
- You are paid by the
job rather than by the week or month.
- You are not reimbursed
for business or traveling expenses.
- You provide your own
equipment and supplies.
- You invest in the facilities
you use for doing the work.
- You can realize a profit
or suffer a loss as a result of your services.
- You work for many different
companies at the same time.
- Your services are available
to the general public on a regular basis.
- You cannot be fired
as long as you produce the requested work.
- You cannot terminate
your relationship with the company until your work is complete.
