Ask a Lawyer, David L. Leon, Attorney, Dallas, Texas (214) 696-0021 » independent contractor http://leonlaw.com/askalawyer Frequently asked questions about Texas law from David Leon, Attorney, Dallas, Texas, (214) 696-0021 Sat, 02 Jan 2010 03:37:30 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 I’m still confused about this independent contractor vs. employee determination. Can I ask the IRS for a determination? http://leonlaw.com/askalawyer/2009/01/18/im-still-confused-about-this-independent-contractor-vs-employee-determination-can-i-ask-the-irs-for-a-determination/ http://leonlaw.com/askalawyer/2009/01/18/im-still-confused-about-this-independent-contractor-vs-employee-determination-can-i-ask-the-irs-for-a-determination/#comments Mon, 19 Jan 2009 02:47:53 +0000 David Leon http://leonlaw.com/askalawyer/?p=98 Yes! The IRS has  Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding


]]> http://leonlaw.com/askalawyer/2009/01/18/im-still-confused-about-this-independent-contractor-vs-employee-determination-can-i-ask-the-irs-for-a-determination/feed/ 0 What does the IRS consider when determining whether or not a person is an independent contractor? http://leonlaw.com/askalawyer/2009/01/18/what-does-the-irs-consider-when-determining-whether-or-not-a-person-is-an-independent-contractor/ http://leonlaw.com/askalawyer/2009/01/18/what-does-the-irs-consider-when-determining-whether-or-not-a-person-is-an-independent-contractor/#comments Mon, 19 Jan 2009 02:33:53 +0000 David Leon http://leonlaw.com/askalawyer/?p=89 The IRS uses three main criteria when determining whether or not someone is an employee or independent contractor.

From the IRS.gov website:
Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?

Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)

Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?


]]> http://leonlaw.com/askalawyer/2009/01/18/what-does-the-irs-consider-when-determining-whether-or-not-a-person-is-an-independent-contractor/feed/ 0 Is there a magic test to determine if a person is an employee or independent contractor? http://leonlaw.com/askalawyer/2009/01/18/is-there-a-magic-test-to-determine-if-a-person-is-an-employee-or-independent-contractor/ http://leonlaw.com/askalawyer/2009/01/18/is-there-a-magic-test-to-determine-if-a-person-is-an-employee-or-independent-contractor/#comments Mon, 19 Jan 2009 02:32:01 +0000 David Leon http://leonlaw.com/askalawyer/?p=88 No, there is no “bright line” test determine whether or not a person is an employee or an independent contractor. The IRS will look at the entire relationship between the parties.


]]> http://leonlaw.com/askalawyer/2009/01/18/is-there-a-magic-test-to-determine-if-a-person-is-an-employee-or-independent-contractor/feed/ 0 How can I tell if the person I hire is going to be classified as an independent contractor or an employee? Can I just say a person is an independent contractor in a contract? http://leonlaw.com/askalawyer/2009/01/18/how-can-i-tell-if-the-person-i-hire-is-going-to-be-classified-as-an-independent-contractor-or-an-employee-can-i-just-say-a-person-is-an-independent-contractor-in-a-contract/ http://leonlaw.com/askalawyer/2009/01/18/how-can-i-tell-if-the-person-i-hire-is-going-to-be-classified-as-an-independent-contractor-or-an-employee-can-i-just-say-a-person-is-an-independent-contractor-in-a-contract/#comments Mon, 19 Jan 2009 02:29:59 +0000 David Leon http://leonlaw.com/askalawyer/?p=87 No. From the perspective of the IRS, the IRS doesn’t care if you label a person an employee, independent contractor or anything else. The IRS will look at the entire relationship between the parties. If you incorrectly label someone an independent contractor when they are in fact an employee, you could face serious liability. The IRS has its own criteria for determining a person’s status as employee vs. independent contractor.


]]> http://leonlaw.com/askalawyer/2009/01/18/how-can-i-tell-if-the-person-i-hire-is-going-to-be-classified-as-an-independent-contractor-or-an-employee-can-i-just-say-a-person-is-an-independent-contractor-in-a-contract/feed/ 0 I want to hire someone for my small business. Can I hire them as an independent contractor and not have to deal with taxes? http://leonlaw.com/askalawyer/2009/01/18/i-want-to-hire-someone-for-my-small-business-can-i-hire-them-as-an-independent-contractor-and-not-have-to-deal-with-taxes/ http://leonlaw.com/askalawyer/2009/01/18/i-want-to-hire-someone-for-my-small-business-can-i-hire-them-as-an-independent-contractor-and-not-have-to-deal-with-taxes/#comments Mon, 19 Jan 2009 02:22:54 +0000 David Leon http://leonlaw.com/askalawyer/?p=86 This is a common question. Many small business owners want help, but don’t want the added hassle (or taxes) of hiring employees. Many business owners believe that they can just simply classify someone as an independent contractor by contract and be done with it. The problem is that the IRS may not agree with your assessment as to whether a person is an employee or independent contractor (even if your agreement specifically states such.) The IRS has its own criteria for determining a person’s status. The contract is only a factor, but it is not determinative. The IRS will look at the entire relationship. Further, if you incorrectly classify someone as an independent contractor, you can face some serious fines from the IRS.


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