Why is the distinction between being an Independent Contractor and an employee so important?

Why is the distinction between being an Independent Contractor and an employee so important?

Whether you qualify as an employee or Independent Contractor is important both to you and the firms that hire you because an Employer-employee relationship is very different from the relationship between a hiring firm and an Independent Contractor. Employees have a special legal status.

Employers owe duties and responsibilities toward employees that do not exist when they hire Independent Contractors.

Moreover, the tax treatment of employees is very different from that of Independent Contractors.

Are you an employee or independent contractor? Here’s what the IRS says (http://www.irs.ustreas.gov/prod/forms_pubs/pubs/p15a01.htm).

Adapted from Wage Slave No More: Law & Taxes for the Self-Employed, by Stephen Fishman.

Learn more about Independent Contracting – Common Questions

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