From the Richmond Times-Dispatch: Learning Center —
The question of who is an independent contractor seems to be a constant source of confusion among many small businesses. One popular notion is that if an individual signs an independent contract agreement, the general contractor or employer has nothing to fear from the Internal Revenue Service.
Such an agreement is not worth the paper it is written on, unless it meets certain IRS criteria.
In determining whether the person providing the service is an employee or independent contractor, all information that provides evidence of the degree of control over the individual or subcontractor must be considered. If you incorrectly classify an employee as an independent contractor, you can be held liable for his or her employment taxes, plus a penalty.
Who is an independent contractor? The general rule is that you, the payer or general contractor, have the right to control or direct only the result of the work done by the individual or subcontractor, but not the means and methods of accomplishing the result…
Read the full story at ASK Score: Independent contractor or employee?
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