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Nicholas
P. DiNatale, CPA - Business Resources - FAQ Who can I consider an "independent contractor"? This question
has been on the minds of both IRS agents and employers for years, and
after so much wrangling there are still no hard and fast rules in either
direction. Finding an answer to this question will take some analysis,
and may further depend on industry practices in your area. The answer
will depend mostly on control: you have the right to direct what is worked
on, the manner in which that work is performed, and the end result of
that work. If you manage these attributes, or simply have the right to
do so, your hire is most likely an employee. If your person in question
funds their own operations, does not work exclusively for you and otherwise
operates independently of your direction, this person is likely an independent
contractor. The idea of control is key here, but often the line between
the two is blurry. You should consult your tax advisor before making a
choice in this area. The cost of an error is high as is evidenced by the
recent actions against Microsoft, Inc.
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