Ep. 11 - Employee or Independent Contractor? You may be surprised
Many people I have spoken with think it's up to them to decide if someone doing work for them is an independent contractor or an employee. That is not the case. The IRS created a set of criteria to determine if someone is an employee or an independent contractor. Some of the criteria are strong indicators one way or the other while others may have some gray area, but taken together if your relationship with a company leans one way or the other, the IRS will make the determination for you. If you get it wrong, it can cost you!.
In this episode of the Red Barn Financial Podcast, Sean goes over the 20 factors that are used to determine an empolyee/contractor relationship so you can more easily categorize the business relationships properly and avoid additional taxes and penalties for getting it wrong.
If there are a few you want to hear about, we have bookmarked the time codes for easy reference: They are labeled by number, time stamp and description.
- 2:25 – Level of Instruction Required
- 3:24 – Amount of Training Required
- Degree of business integration
- 4:02 – Personal Services Required
- 4:33 – Control of Assistants
- 5:34 – Continuity of Relationship
- 6:41 – Flexibility of Schedule
- 7:42 – Demands for Full Time Hours
- 8:35 – Need to work on premises
- Control of Sequence of work
- 9:55 – Requirements for Reports/Reporting
- 10:18 – Method of Payment
- 11:10 – Travel and Expenses
- 11:49 - Who Provides Tools and Materials
- 12:22 – Investment in Facilities
- 13:25 – Realization of Profit or Loss
- 14:24 – Ability to Work for Others
- 15:20 – Availability of Services to the Public
- 16:01 – Control of Discharge
- 16:59 - Right of Termination of Relationship
Disclaimer: This podcast is not tax, legal or investment advice. Please contact the appropriate advisor for help in your situation.
If you would like to engage Red Barn Financial, please contact us at 615-619-6919 or visit us on the web at www.redbarnfinancial.com
