The IRS issued a fact sheet this summer to remind employers to correctly classify workers as either independent contractors or employees. (IRS FS-2006-21) The main factor: control.
The more control you have over the "when, where and how" that workers perform their jobs, the more likely that they'll be common-law employees for which you must withhold and pay federal taxes. Misclassification can lead to big-time back taxes and penalties ...
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