Q: Employee vs. Independent Contractor
If you are a business owner, whether you hire people as independent contractors or as employees will impac how much taxes you pay and the amount of taxes you withhold from their paychecks. Here are something every business owner should know about hiring people as independent contractors vs. hiring them as employees.

Three characteristics are used by the IRS to determine the relationship between businesses and workers: Behavioral Contral, Financial Control, and the Type of Relationship. Behavioral Control covers facts that show whether the business has a right to direct or control how the work is done through instructions, training or other means. Financial Control covers facts that show whether the business has a right to direct or control the financial and business aspects of the worker's job. The Type of Relationship factor relates to how the workers and the business owner perceive their relationship.



08/21/2009 14:41:49

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