Have a Tax Question? Ask a Tax Expert
Classifying someone as an independent contractor versus an employee has tax advantages to you because you will not have to pay the employer portion of social security and medicare taxes which is currently 7.65% combined for the employer. You would also have no expenses for things such as unemployment insurance or workman's comp insurance which must be paid on behalf of an employee. However, you cannot just classify someone as an independent contractor based on the advantage it has to you.
The IRS has set guidelines which help define whether or not someone can and should be classified as an independent contractor. The key factor which determines whether a worker is an independent contractor is who has the right to control the worker as to how work is accomplished? I am giving you a link to a website that outlines some of the other factors that the IRS looks at in determining this classification.
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