WORKER CLASSIFICATION | jeffbtravis.com

WORKER CLASSIFICATION
EMPLOYEE OR INDEPENDENT CONTRACTOR

Worker classification determinations are made on a case by case basis, depending on the specific facts and circumstances. How do you know how to classify? The basic definitions are:

1) Employee-an individual who performs services for a firm who is subject to
their control regarding what work will be done and how it will be done.

2) Independent contractor-an individual who performs services for a firm-but controls only the result of the work.

The categories of evidence are:

1) Behavioral control
2) Financial control
3) Relationship of the parties

Behavioral control is determined by:
1) Type of instruction given
2) Degree of instruction
3) Evaluation systems
4) Training provided by business

Financial control is determined by:
1) Significant investment
2) Unreimbursed expenses
3) Opportunity for profit or loss
4) Method of payment

Relationship of the parties is determined by:
1) Is there a written contract?
2) Are employee-type benefits provided?
3) Permanency of the relationship?
4) Are services provided a key activity of the business?

What if you are still not sure of worker classification? You can file a FORM SS-8 with the IRS and the IRS will determine your classification.

Jeffrey B. Travis, CPA

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Deerfield, IL 60015 | CPA Firms

Deerfield, IL 60015 | CPA Firms
List of Certified Public Accountants in Deerfield, IL 60015

Travis & Warzala, Ltd.;
FGMK, LLC;
Mann, Weitz & Associates LLC;
H.D. Roseth & Associates, Ltd.;
Marcum LLP;
Kessler Orlean Silver & Co. PC;
Miller Cooper & Company

 

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FEDERAL SALES TAX LEGISLATION PROPOSALS

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