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Are You An Independent Contractor Or An Employee?


I am asked this very often, if it is better to be an independent contractor or an employee. My answer like all accountants is always, "It Depends!". On the other hand, for a small business owner (SBO), the question mostly is, how to determine the business relationship that exists between the person providing the services & the SBO; and if that relationship is that of an independent contractor or an employee. 

 So how is that determination made? 

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  1. UnknownSeptember 30, 2013 at 5:55 PM

    Spotting employees disguised as independent contractors is almost as difficult as sexing chickens (yes, that's a thing). This is one of those tax subjects with only general standards -- even in a quality Enrolled Agent exam course like http://fastforwardacademy.com/enrolled-agent-exam-prep.htm. It falls within the same level of hard to define matters like “reasonable compensation” for S corporation shareholders. Enrolled Agent tax experts just know from experience when mandatory treatment of an employee arrangement exists.

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    1. Manasa Nadig, The Buzz About TaxesSeptember 30, 2013 at 7:38 PM

      That's one top reason to hire a knowledgeable Enrolled Agent to help in this process.

      Delete

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