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To: drewh
At some point businesses will start hiring minimum wage earners as independent contractors. Then they will issue them 1099 forms, and they will have to pay their own tax's.
26 posted on 09/12/2012 7:48:44 PM PDT by political1 (Love your neighbors)
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To: political1
The IRS purposely sets a really high bar in determining whether a person is an independent contractor or an employee.

It's not that easy to do:

Common Law Rules

Facts that provide evidence of the degree of control and independence fall into three categories:

1.Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?

2.Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)

3.Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?

Businesses must weigh all these factors when determining whether a worker is an employee or independent contractor. Some factors may indicate that the worker is an employee, while other factors indicate that the worker is an independent contractor. There is no “magic” or set number of factors that “makes” the worker an employee or an independent contractor, and no one factor stands alone in making this determination. Also, factors which are relevant in one situation may not be relevant in another.

The keys are to look at the entire relationship, consider the degree or extent of the right to direct and control, and finally, to document each of the factors used in coming up with the determination.

Independent Contractor or Employee

39 posted on 09/13/2012 4:29:25 AM PDT by Madame Dufarge
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