Hey, my name is Keith Hall and I'm a small business consultant. I have been working with small businesses just like yours for over 25 years. I understand that you have a new worker, congratulations! You have created a new job, which is exactly what we are asked to do. But your question may be, "Is my new worker an independent contractor or an employee?" It is a very difficult question, one that many small businesses struggle to understand. I think even the IRS struggles to understand it. You might be asking yourself which is better, should you choose them as an employee or as an independent contractor. Well, that's the very first thing you need to keep in mind - this is not a matter of choice. The underlying facts and circumstances of your new worker will dictate whether they are an independent contractor or an employee. You can't just choose which one you think is easier. This is very, very important. The key issue is control. Who controls the work product? For example, if you control the work product, that basically means you tell them what to do, how to do it, when to come to work, when they can leave for work. You may even tell them what they're supposed to wear to work. You give them the tools they need to do the job-you provide them a computer or construction materials or their hammer and nails. If you control all of those things, most likely you have an employee. On the other hand, if the individual, the new worker, controls those things, they decide how to do the job, they have their own tools, and all you really control is the end product - are you happy with the job they did, then most likely you...
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Video instructions and help with filling out and completing How Form 8865 Contractors
