Your company has just won a major contract and you are anticipating
the need for some short term employees to get you through the crunch period. Since
these employees can work out of their home and set their own hours, you decide to pay them
as contract laborers instead of placing them on the payroll.
Good
idea? Maybe not. With the downsizing that took place over
the last few years, the
IRS has seen an explosion of people being paid as outside contractors instead of
employees.
Determining the
classification between an employee and an independent contractor is not always easy, but
the IRS often uses the following tests in deciding cases:
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