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Employee Or Independent Contractor/Consultant?

Employee or Contractor: What’s the Difference?

The United States notes distinct differences between employees and independent contractors. Much of these differences are in place to help employers understand the tax implications of contracting a gig worker versus hiring someone as an employee.

According to the Internal Revenue Service (IRS), three main categories of rules apply when making the distinction: financial, behavioral, and type of relationship.

If an individual, for example, gets reimbursed for expenses by the payer, is controlled by the payer as to how, or when, he works, or provides long-term work and has paid benefits, that individual is considered an employee.

As a general rule, an independent contractor then has control over his or her hours and how the work is performed, has no benefits from the payer, and does not have an ongoing business relationship with the payer.

Unfortunately, these distinctions become very muddled in the case of gig workers, who often do perform long-term work for others or fall into some other “employee” designation, but not all of them.

**Before you are coerced into selling ANYTHING, research EVERYTHING!!

~Boss Sparks Mentoring~

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