How do I determine whether someone is an employee or an independent contractor?
Law & Taxation mentor Barbara Weltman responds to the following question from an inc.com user:
My company is trying to figure out questions related to the distinction between independent contractors and employees. Can you point me to any worthwhile articles or books on the subject?
Barbara Weltman's response:
Whether to treat workers as employees or independent contractors is a vital decision for any business. The stakes are high because of the high cost of employment taxes if employee classification is used and because of the high level of IRS scrutiny in this area.
To determine how to classify workers, you should review IRS Publication 15-A, Employer's Supplemental Tax Guide and Training Materials for IRS Examiners on Worker Classification. They can be found at the IRS Web site at www.irs.gov.
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