1099 independent contractor vs W2 employee

D

DelJo63

Seems to be much confusion today on this subject. As a consultant, it is very important to understand the IRS rules which clarify this issue. An important factor is that the company for which you might work DOES NOT make this determination -- the IRS does and you have to meet these conditions

There are strict IRS guidelines as to what can be considered a self-employed contractor, and these are:

  • The company cannot control how the worker performs their job.
  • The company cannot control financial details related to the job.
  • The company cannot offer the worker benefits, such as paid vacations, a retirement plan, or health insurance.

comes down to whether a company can exert behavioral, financial, or relational control over the worker.
  • Does the worker determine their schedule and work location?
  • Does the worker receive training from the employer?
  • Does the worker have employees?
  • Does the worker determine the sequence of the service they give?
  • Does the worker determine the reporting they will give the company?
  • Does the worker submit invoices?
  • Does the worker pay for their own travel and business expenses?
  • Does the worker provide their own materials and tools?
  • Does the worker run their own business?
  • Does the worker run advertising for themselves?
  • Does the worker have multiple clients?
  • Does the worker provide their own insurance?
  • Does the worker have a temporary or open-ended relationship with the company?
 
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