Independent Contractor vs Employee: What the IRS Says About It

All Up In Yo' Business with Attorney Aiden Durham

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If you hire somebody to perform a service, they are either an independent contractor or an employee. But how can you tell the difference? And why is it so important to know the difference? This episode explains how the IRS determines who is a contractor and who is an employee.
Don't stop the learning! Check out more All Up In Yo' Business:
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How to Use a DBA: • Doing Business As: Usi...
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#AllUpInYoBiz #IRS #IndependentContractor
employment law independent contractor vs employee employee vs independent contractor independent contractor agreement

Опубликовано:

30 мар 2021

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Комментарии : 75

@YourIndoorExperts 3 года назад

Thanks for keeping it simple and breaking it down! Appreciate your channel 😊

@theevolveddietitian Год назад

Thank you for educating us! 💪

@joshuahall3622 4 месяца назад

This is exactly the info I was looking for thanks!

@harleyehuffinejr2432 3 года назад

Great information, thank you.

@Ry-fw6or 2 года назад

Thank you so much. Subscribed!

@GoMandiMartin 2 года назад

Your videos are wonderful; thank you!

@raynmoonflower9103 Год назад

Thanks so much for your time and effort!

@wavyvibesradio 9 месяцев назад

Thank you this video helped get my final paycheck. This was very helpful

@thatnon-competelawyer5313 3 года назад

Great explanation. I was just dealing with this issue recently, and you sum it up very well.

@allupinyobiz 3 года назад

Thanks! 😄

@realmccoy9597 9 месяцев назад

@@allupinyobizI need your help and I live on the front range here in Colorado.

@RaphaelPungin Месяц назад

Thanks so much for such an informative video!

@taraporter4520 3 года назад

Thank you so much for this video

@a.j.1802 2 года назад

This is good information. The one piece of information I did not hear was how to settle an employee/employer dispute on classification. The IRS has a form, SS-8, specifically for that purpose. I have a friend that is going to have to fill one out because their boss keeps calling them a "1099-employee" while dictating how they perform the job while using company equipment. If she uses her vehicle her gas costs are reimbursed, her boss has to approve all aspects of her job including order of operations. She is paid on a commission basis, but all sales must be approved by her boss so she has no autonomy. She is required to wear a company t-shirt when performing services. When she stops working for that company in a few months it will be interesting to see how things play out.

@RcOffroad9513 5 месяцев назад

How did it play out? I'm going thru this now

@a.j.1802 5 месяцев назад

@@RcOffroad9513 Wish I could help you with this. She ended up not filing. He didn't file a 1099 on her and treated it as cash payments. She accepted that because it saved her from having to report it and pay taxes on it so the money she had been setting back for taxes she got to keep. How he reported it on his business filings I have no idea.

@APerez89 28 дней назад

@@a.j.1802she should get an atty and gettum. In Cali this is a huge deal. It may sound mean but it's bs that an employer wants to use you, your life, your skills, but doesn't wanna take liability if something happens to you or if you experience hardship because of that role. Yeah work is not supposed to be dandy but you should still be honored to a minimum degree

@danielnajera6633 2 года назад

Oh my gosh that was very clear 😃 muchas Gracias for your information! It’s gonna help a lot to move forward with my gold of opening a small business

@APerez89 28 дней назад

Yeah in CA you should be EXTREMELY CAREFUL. ALMOST ANYTHING could get you in trouble if you're paying someone to work for your small business

@GERE-BuyorSell 3 месяца назад

Excellent!

@hondolane3559 9 месяцев назад

here's a scam for you. In Virginia, the trucking industry is split into 2 basic types, lawful businesses and unlawful businesses. lawful ones are operating under the w2 format and the majority of unlawful ones are operating as 1099s. there is a 40% operating difference between them. this is an unfair business practice and no one is doing anything about it.

@ryananthony4840 2 года назад

Thank you!

@izzh3107 3 года назад

How can I create an accountability report for my independent contractors to be provided each week so the company can make sure they are using units and/or providing services to the people assigned to their caseload?

@RamonHV Год назад

Hi ! Love your videos, what is the employment letter proof for an independent contractor?

@jh276 Год назад

Great video! Thank you for this. May I know if you did a video on Statutory Employees / Non-Employees? I can't seem to find it as this is another very confusing category. Thank you again.

@jh276 Год назад

and could you please also tell me the difference between Statutory Non-Employee vs Independent Contractor? can't find anything on this, thank you.

@darienthompson2972 3 года назад

Hey, what have to be done to go from partnership to sole proprietorship?

@ochicoloto3524 Год назад

Thanks. I just created a tax preparation business. am I required to hire my tax preparers as employees or contractors? which one is better for employer from a tax perspective

@LA-em4kr Год назад

Very Important information, do i have my sub contractor fill out a 1099 before they start work or at the end of the year? Do I receive their SS#, Do I receive proof of a EIN and Insurance before they start? And do I pay them immediately after they complete their job? Thank you so much!

@Ytspg1919ottspg Месяц назад

Thanks

@alexe3332 2 года назад

What if you get some people to agree to mow lawns for you even if you as a business never mowed a lawn.

@adonaiblackwood7172 3 года назад

I love all your informative videos, but this one hits home for me.. I was scammed into being hired as an IC even though I performed my duties as an employee..soo lame 😒 they dictated my work, supplied my tools, I provided work that was a key aspect to their operations, I received bi-weekly pay for daily rates, I only provided that specific type of service with them (I never freelanced my services for anyone else), and I had no say or leverage within the company. I just did my job the best I could. I tried to dispute my taxes with the state and irs..but no one cares 🙄 “We do 1099s so you can get paid more” pshhh..lies! That was over 5 years ago.. I’m soo happy to be working for myself and focusing on my own wealth building. 💪

@seabass40004 Год назад

So your dispute was fruitless?? What state

@Samlol23_drrich Год назад

I think there is an irs form if you are misclassified. You pay your portion of social security and Medicare and let the irs get it from your employer

@justmichael8035 2 года назад

What kind of lawyer do I need to dispute a w9 when I believe I am a employee

@victorreyes2196 3 года назад

How about if someone is a janitor I got offer a job working 3 days a week getting paid 18 but they say I will have to pay my own taxes safe up its a non-profit art please

@MarisaPecoraro Год назад

So having a contract that says I'm a consultant but at 40 hrs a week with required team meetings, no end date, and no one else can do my job (as of now)... it's not looking good for my 1099 contract...

@hitman3867 Год назад

I’m a contractor for a dental manufacturer I do delivery only for them 8 to 4 they do tell me direction from time to time , I do follow orders from drivers manager can you advice on what that may mean

@taniairisbarreto4424 3 года назад

I like the way you described everything. I guess the question I have is, If I I am gaining work as a sole proprietor, should I Hire an employee or an independent contractor? I teach music and I am getting a lot of students. Which is great. But it is limiting me and my time because of how many students I can receive. I am just wondering if hiring an employee to share the load is better than getting an independent contractor, where I still have to make sure that they are doing everything right. There is such a weird fine line that I don’t want to mess up and get screwed at the end. I teach music in a specific way. So that is why I want to make sure

@APerez89 28 дней назад

If you're cool with your workers/team mates teaching as they please, working whenever they feel like it, and charging you their own rate, as well as possibly taking your students then classify them as IC. If you wanna tell them what time to come to work, how to teach + what procedures to follow, if you wanna choose their hourly rate, or want them to follow your instructions then Employee. Whatever happens dont piss them off or it's lights out in CA or blue states 😎

@sirrjtyrell5024 2 года назад

Hey Aiden, so I have a cleaning business- sole-prop, would you say that my industry is one of those grey areas? I have a lady that helps me with houses, we each have a few together (large ones) & some separate, we buy our own supplies & work under the business name. I've told her she can find houses on her own if she'd like & not have to be under the business & we do have a sub-contractor 'contract' that I made up. Anywho, thanks, was helpful!

@allupinyobiz 2 года назад

I answered your question in my newest video! Check it out at ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-SrGkYbAD25I.html

@YourUncle8501 Год назад

It seems much more profitable for government to classify a worker as an employee: Payroll taxes etc.

@realmccoy9597 9 месяцев назад

I tried contacting you folks because I live here in Colorado and I never got a response

@familylifetoo9541 Год назад

Can an uber driver fill put a business credit card?

@FrankShepard 2 года назад

When there is any doubt, IRS will consider as employee op IC

@zsaqiacamphor9483 Год назад

Can a seasonal liaison work qualify as a contractor

@unbezo398 3 года назад

If you want to become an independent contract health worker, what kind of liability insurance is recommended to get?

@smittywyfe9848 Год назад

Following

@LetsGo-LoveYourself Год назад

The app wonolo is bad with this. I'm looking into holding them accountable

@yuliiaromanova3602 2 года назад

What if the company is treated me as w2 contractor, but from all you described seems that I am full time w2 employee. Should I claim to irs to get less taxes or what can I do to get my benefits, but the company still says that I am just contractor? P.S. they even pay insurance and 401k

@allupinyobiz 2 года назад

There's no such thing as a "w2 contractor." If you receive a W-2, then you're an employee.

@enlightened7777 3 года назад

I guess if you're receiving a 1099 at the end of the year and you have to pay your own taxes and you're not getting any benefits from the company, that should put you more in the category of being an Independent Contractor.

@victoriaray888 Год назад

Wrong, that's a myth.

@vanessasworder Месяц назад

Why?

@user-yu3bf5ke7u 3 месяца назад

This honestly does not make any sense because I worked for DoorDash and they control the methods that you use and also I worked for shipt under target in the behavioral aspect they control a lot of things you have to do it very specific ways there’s trainings for different things. How do they get away with a 1099 when the behavioral aspect is way off they control a lot I just don’t understand. I want to hire independent contractors for my business and I really would want to find out if I do have trainings and control some behavioral aspects to still have a 1099 contractor. Like they do

@ralphcristinagarcia 6 месяцев назад

contractor vs subcontractor photos of work belong to who?

@johnplaid648 3 года назад

Dear Biz: How are you making money from this video? Why is like, subscribe, recommend, join and click the bell so vital? I'm not referring to your merch. Do advertisers pay you money?

@larrysbrain1627 Год назад

Either way, it breaks down to being exploited by those who pocket your sweat

@loveone4life361 2 года назад

State, Federal government and contractors oh my! 😬 😆

@Bob-cd5pp 4 месяца назад

Could you be any more Vague

@martinmurphy4852 Год назад

Unfortunately these rules are ignored in the FL. You are an employee and must act as such right up until it is financially beneficial for the employer to call you a contractor/sub contractor. Basically your only responsibility as an employer in FL is to send them a 1099 the first of every year. Of course when faced with constant turn over and of late not even being able to fill the job you sit around and blame it on how lazy everyone has become. We have a huge labor problem in this country and we are not going to be able to fix it by pointing a finger at someone else and calling them lazy but it appears that is exactly the plan.

@_sharpecarpentry 3 года назад

I love smart women.

@SelfieKinglol 3 года назад

If you hire someone as a contractor at the beginning, can you later change it to employee?

@allupinyobiz 3 года назад

Yes you can

@SelfieKinglol 3 года назад

@@allupinyobiz thanks for taking the time to answer me. If I change a independent contract to employe in the middle of the year, Do I get in trouble with the irs?

@pomdigz9893 7 месяцев назад

Hey FEDEX GROUND!!!! You hearin this? You guys need to pay your EMOLOYEES overtime time pay!!!!

@allthingseducation 10 дней назад

Nope --- if you control the "person" in employment they are an employee!! 1099s should be illegal! A lot of the tutoring companies train and expect you to follow their systems and yet classify you as an IC -- they send out the invoice too! There needs to be legal action against these companies similar to ride share. Companies will exploit workers and that is they oversight is necessary!