[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-303290-en":3,"detail-sidebar-cat-1-en-105":31,"doc-seo-303290-105":75},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":11,"category_id":12,"category_name":13,"doc_title":14,"doc_description":15,"doc_content":16,"file_id":17,"file_url":18,"file_type":19,"file_size":20,"view_count":21,"is_deleted":4,"is_public":11,"is_downloadable":11,"audit_status":11,"page_count":22,"language":23,"language_code":24,"site_id":25,"html_lang":24,"table_of_contents":26,"faqs":27,"seo_title":28,"seo_description":15,"update_tm":29,"read_time":30},303290,137451211410,"\tCallum ","https://ap-avatar.wpscdn.com/avatar/2000bb0a9246f588df?x-image-process=image/resize,m_fixed,w_180,h_180&k=1786362646172706240",1,18,"Letters","Independent Contractors vs Employees - Hiring, Reporting, & Classification Issues","Compares independent contractors and employees through IRS-based classification principles, focusing on hiring decisions, reporting duties, and key tax form implications. Covers why classification matters financially, including payroll taxes, unemployment insurance, and potential exposure to back payroll taxes, penalties, and interest. Explains worker impacts from misclassification, such as missed benefits, unavailable unemployment benefits, and unexpected tax balances. Introduces the IRS 20-factor history and the modern 3-category framework: financial control, behavioral control, and the relationship between the parties.","Independent Contractors vs Employees – Hiring, Reporting, & Classification Issues  \nBy David Peters, CPA, MST, CLU, CPCU  \nAbout your instructor  \nDavid is the Founder and Owner of Peters Professional Education in Richmond, VA, and a national CPE Instructor/Discussion Leader for the AICPA, Surgent, and Kaplan.  \nHe regularly teaches courses in accounting, finance, insurance, financial planning, and ethics throughout the United States.  \nDavid R. Peters  \nCPA, MST, CLU, CPCU  \nNeed more high-quality CPE?  \nScan the QR code or visit  \n[www. PetersProfessionalEducation.com](www. PetersProfessionalEducation.com)  \nfor more online courses and educational content!  \nLearning Objectives  \n• Recall the 3 determination categories (incorporating the 20 historical factors) that the IRS uses to determine employees versus independent contractors  \n• Identify the basic tax forms needed when hiring employees and independent contractors  \n• Recognize the different types of 1099 forms  \n• State the tax implications of scholarships  \nWhy do we care about this classification?  \n• Employers pay payroll taxes on employee wages (6.2% FICA / 1.45% Medicare). They also withhold income taxes and pay unemployment insurance as well.  \n• Employers do not pay these items on independent contractors . Independent contractors are treated like separate businesses .  \n• If a person is treated as a contractor when they should have been treated as an employee, the employer could be liable for back payroll taxes, penalties, and interest.  \nWhy should a worker care though?  \n• Employees should care about misclassification, because they could be missing out on benefits (including retirement plan contributions)  \n• Also, unemployment benefits may not be available to the employee .  \n• Employees could end up with a very large, unexpected balance due on their tax return!  \nCan I just let the worker choose?  \n• No. The IRS uses facts and circumstances to figure out how workers should be classified. The employee’s opinion is not considered. Neither is the employer’s opinion .  \n• Historically, the IRS has used a 20-factor test to make the determination . In more recent times, 3 categories are considered – financial control, behavioral control, and relationship between the parties . Important: No one factor is determinative.  \n• It should be noted that this is an area where the IRS has consistently refused to give bright line guidance . (It is normally listed in a Rev Proc every year showing items that the IRS refuses to determine.)  \nPublication 1779 – Behavioral Control  \n• “A worker is an employee when the business has the right to direct and control the worker .”  \n• Instructions – Extensive instructions on any of the following suggest the worker is an employee:  \n• how, when, or where to do the work  \n• what tools or equipment to use  \n• what assistants to hire to help with the work  \n• where to purchase supplies and services  \n• Training – If the business provides you with training about required proceduresand methods, this indicates that the business wants the work done in a certain way, and this suggests that you may be an employee .  \nPublication 1779 – Financial Control  \n• Significant Investment – If you have made a significant investment in your own business (legal advice, tools, equipment, etc.), you are more likely an independent contractor  \n• There is no specific dollar amount to indicate “significance.”  \n• Expense Reimbursement – If your expenses are generally NOT reimbursed, you are more likely an independent contractor  \n• Profit or Loss – Employees generally can’t show a loss on their efforts . Independent Contractors can gain or lose money.  \nPublication 1779 – Relationship of the Parties  \n• Employee Benefits – Independent Contractors are generally not paid employee benefits. Therefore, if the person is entitled to benefits, they are more likely an employee .  \n• Written Contracts – Written contracts will often dictate what the parties intended. Th","cbCaiqqF7GDXK0tl","https://ap.wps.com/l/cbCaiqqF7GDXK0tl","pdf",524818,5,38,"English","en",105,"# Learning Objectives\n# Why Do We Care About This Classification?\n# Why Should a Worker Care Though?\n# Can I Just Let the Worker Choose?\n# Publication 1779 - Behavioral Control\n# Publication 1779 - Financial Control\n# Publication 1779 - Relationship of the Parties\n# Form SS-8","[{\"question\":\"What are the three IRS determination categories for employee vs. independent contractor classification?\",\"answer\":\"The IRS considers financial control, behavioral control, and the relationship between the parties. No single factor is determinative.\"},{\"question\":\"How can a business’s behavioral control indicate a worker is an employee?\",\"answer\":\"Extensive instructions about how, when, or where to do the work, what tools to use, assistants to hire, supplies, and training provided by the business all suggest employee status.\"},{\"question\":\"What is Form SS-8 used for, and what are its limitations?\",\"answer\":\"A business can request an IRS determination by filing Form SS-8; the result is sent to both the business and the worker with no user fee. The determination applies only to federal tax matters, not state and local.\"}]","Independent Contractors vs Employees - Hiring, Reporting, & Classification Issues | PDF",1789801651,13,{"code":4,"msg":5,"data":32},[33,39,44,49,54,59,64,67,71],{"id":34,"doc_module":11,"doc_module_name":35,"category_name":36,"show_sort_weight":37,"slug":38},11,"Template","Presentations",90,"presentations",{"id":40,"doc_module":11,"doc_module_name":35,"category_name":41,"show_sort_weight":42,"slug":43},12,"Resumes",80,"resumes",{"id":45,"doc_module":11,"doc_module_name":35,"category_name":46,"show_sort_weight":47,"slug":48},14,"Invoices",70,"invoices",{"id":50,"doc_module":11,"doc_module_name":35,"category_name":51,"show_sort_weight":52,"slug":53},15,"Posters",60,"posters",{"id":55,"doc_module":11,"doc_module_name":35,"category_name":56,"show_sort_weight":57,"slug":58},16,"Social Media",50,"social-media",{"id":60,"doc_module":11,"doc_module_name":35,"category_name":61,"show_sort_weight":62,"slug":63},17,"Forms",40,"forms",{"id":12,"doc_module":11,"doc_module_name":35,"category_name":13,"show_sort_weight":65,"slug":66},30,"letters",{"id":68,"doc_module":11,"doc_module_name":35,"category_name":69,"show_sort_weight":21,"slug":70},21,"Paper Templates","papers-templates",{"id":72,"doc_module":11,"doc_module_name":35,"category_name":73,"show_sort_weight":4,"slug":74},158,"General","general-158",{"code":4,"msg":76,"data":77},"ok",{"site_id":25,"language":24,"slug":78,"title":14,"keywords":79,"description":15,"schema_data":80,"social_meta":136,"head_meta":138,"extra_data":140,"updated_unix":141},"independent-contractors-vs-employees-hiring-reporting-classification-issues","",{"@graph":81,"@context":135},[82,98,118],{"@type":83,"itemListElement":84},"BreadcrumbList",[85,89,92,95],{"item":86,"name":87,"@type":88,"position":11},"https://docshare.wps.com","Home","ListItem",{"item":90,"name":35,"@type":88,"position":91},"https://docshare.wps.com/template/",2,{"item":93,"name":13,"@type":88,"position":94},"https://docshare.wps.com/template/letters/",3,{"item":96,"name":14,"@type":88,"position":97},"https://docshare.wps.com/template/independent-contractors-vs-employees-hiring-reporting-classification-issues/303290/",4,{"url":96,"name":14,"@type":99,"image":100,"author":105,"headline":14,"publisher":107,"fileFormat":110,"inLanguage":24,"description":15,"dateModified":111,"datePublished":112,"encodingFormat":110,"isAccessibleForFree":113,"interactionStatistic":114},"DigitalDocument",{"url":101,"@type":102,"width":103,"height":104},"https://docshare.wps.com/thumbnails/independent-contractors-vs-employees-hiring-reporting-classification-issues/303290.png","ImageObject",442,249,{"name":9,"@type":106},"Person",{"url":86,"name":108,"@type":109},"DocShare","Organization","application/pdf","2026-10-01","2026-09-19",true,{"@type":115,"interactionType":116,"userInteractionCount":21},"InteractionCounter",{"@type":117},"ViewAction",{"@type":119,"mainEntity":120},"FAQPage",[121,127,131],{"name":122,"@type":123,"acceptedAnswer":124},"What are the three IRS determination categories for employee vs. independent contractor classification?","Question",{"text":125,"@type":126},"The IRS considers financial control, behavioral control, and the relationship between the parties. 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