December 19, 2017

Worker Classification: Is your worker an employee or an independent contractor?

Here is a tax topic that can be vexing to both business owners and workers alike:

Is a worker an employee or an independent contractor?

Good question, particularly with the growth in today's gig economy.  The Internal Revenue Service and the Department of Labor take slightly different approaches in answering this question.  However, the general rule of thumb involves the following "means and method" test:
If an employer has the right to control the worker's work - and the results of such work - as well as the manner and means in which the work is performed, the worker is considered an employee, and not an independent contractor.
For more detailed information, the IRS uses a 20 Factor Test when classifying an employer/worker relationship.  Click here to download the 20 Factor Test and additional worker determination information.

About Mary Rae Fouts, EA

Mary Rae Fouts, EA provides tax, insurance consulting, and expert witness services to clients who have technical or complex concerns.  For more information visit

Mary Rae Fouts

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