Here is information that you can use to determine whether you likely can qualify as an independent contractor:
A W-2 Employee must be provided workers' compensation coverage, unemployment insurance and you must withhold taxes from their wages. A W-2 employee is an employee that you control, directing their work, the hours that they work and the ultimate quality of their work.
A 1099 employee you don't have to provide workers' compensation coverage or unemployment insurance for, you don’t withhold taxes and you have little control over their work. They are treated as an outside company that you are contracting with to do a project---on their own time and using their own judgment.
There is typically not a choice in how an employer designates an employee, but rather the designation is controlled by law.
A worker is more likely an Employee, than an Independent Contractor, if the worker:
1. Is required to comply with the employer’s instructions about the work.
2. Receives training from the employer.
3. Provides services that are integrated into the business.
4. Provides services that must be rendered personally.
5. Hires, supervises and pays assistants for the employer.
6. Has a continuing relationship with the employer.
7. Follows set hours of work.
8. Works full-time for the employer.
9. Works on the employer’s premises.
10. Does the work in a sequence set by the employer.
11. Submits regular reports to the employer.
12. Receives payments of regular amounts at set intervals.
13. Receives payments for business or traveling expenses.
14. Relies on the employer to furnish tools and materials.
15. Lacks a major investment in facilities used to perform the service.
16. Cannot make a profit or suffer a loss from the services.
17. Works for one employer at a time.
18. Does not offer services to the general public.
19. Can be fired.
20. Can quit at any time without liability.
The IRS looks at 3 primary issues when evaluating whether you are employee or independent:
1. The behavioral control issue: How the employer directs your services provided, and whether the employer has retained the right to control the details of your work.
2. The financial control issue: The IRS looks at whether you can to make a profit from your business---not simply an hourly wage---and whether you can make a profit or take a loss in your business.
3. The nature of the business relationship between the two of you: Is this a strict dealing between the hospital and you-as-a-separate-company. If the employer provided benefits such as vacation, health benefits---normally only give an employee, and whether your services are simply the regular business of the business owner.
Now, if you fall into the independent contractor status under the above guidelines, then you can incorporate and enter into a service agreement with the overseas company.
You may reply back to me using the Reply link and I will be happy to continue to assist you until I am able to address your concerns, to your satisfaction.
Please remember to rate my service to you so that I can be compensated for helping you. Thank you in advance.
I wish you and yours the best in 2016,