Classifying those workers as independent contractors instead of as employees seemed like a good idea at the time. This tax tip explains that, in general, the degree of control you exercise over the worker determines whether the worker is an employee or independent contractor. Find out what you can do to put the issue of classification to rest once and for all. An employee generally relies on a business's instructions about when, where and how to work. An employee receives specific training, while independent contractors use their own methods.
Independent contractors are more likely to have unreimbursed expenses.
An independent contractor often has a significant investment in the facilities used in performing services for someone else. Employees receive payments at designated times. An independent contractor is usually paid by the job. An independent contractor can make a profit or take a loss. Training a worker occurs by requiring an experienced employee to work with the worker, by corresponding with the worker, by requiring the worker to attend meetings or by using other methods.