Internal Revenue Service
Small Business and Self-Employed
Taxpayer Education and Communication
Tax Information for Small
Businesses
Consider it Done
Internal Revenue Service
Small Business and Self-Employed
Taxpayer Education and Communication
Construction
Independent Contractor
or
Employee?
Internal Revenue Service
Small Business and Self-Employed
Taxpayer Education and Communication
Worker Classification
(Who are employees?)
Internal Revenue Service
Small Business and Self-Employed
Taxpayer Education and Communication
4 Classification of Workers
•
Independent Contractors
• Common-law Employees
• Statutory Employees
• Statutory Nonemployees
Internal Revenue Service
Small Business and Self-Employed
Taxpayer Education and Communication
Common-Law Employees
• An individual who performs services for you
who is subject to your control regarding what
will be done AND how it will be done.
•
It does not matter that you give the employee
freedom of action; what matters is that you
have the RIGHT TO CONTROL the details
of how the services are performed.
Internal Revenue Service
Small Business and Self-Employed
Taxpayer Education and Communication
Corporate Officers
• Generally, considered employees of the
corporation
• Not considered an employee if:
1. The officer does not perform any services or performs
only minor services.
2. The officer is not entitled to receive, directly or indirectly,
any remuneration.
Internal Revenue Service
Small Business and Self-Employed
Taxpayer Education and Communication
Independent Contractor
• An individual who performs
services for you but is NOT
under your DIRECT control.
• You the contractor have the right
to control and direct ONLY the
result of the work and not the
means and methods of
accomplishing the result.
Internal Revenue Service
Small Business and Self-Employed
Taxpayer Education and Communication
Statutory Employees
•
Independent contractors under common law,
which are treated as employees by statute for
Soci