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Resources:

  


Independent Contactor - The rules of using an Independent Contactor


Being incorporated does not necessarily qualify you as an Independent
Contractor. About 90 percent of the investigations made by the IRS prove
that the individual did not properly qualify for Independent Contractor status.

The IRS uses 20 common law factors to determine whether workers are
"Employees" or "Independent Contractors" (See IRS Manual 4600 Employ-
ment Tax Procedure, Exhibit 4640-1).

Workers are generally Employees, and not Independent Contractors, if they:

1. Must comply with employer's instructions about work.
2. Receive training from, or at the direction of, the employer.
3. Provide services that are integrated into the business.
4. Provide services that must be rendered personally.
5. Hire, supervise, and pay assistants for the employer.
6. Have a continuing working relationship with the employer.
7. Must follow set hours.
8. Work full-time for an employer.
9. Do their work on the employer's premises.
10. Must do their work in a sequence set by the employer.
11. Must submit regular reports to the employer.
12. Receive payments of regular amounts at set intervals.
13. Receive payments for business and or traveling expenses.
14. Rely on the employer to furnish tools and materials.
15. Lack a major investment in facilities used to perform service.
16. Cannot make a profit or suffer a loss from their services.
17. Work for one employer at a time.
18. Do not offer their services to the public.
19. Can be fired by the employer.
20. May quit work at any time without incurring liability.

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