Monday, June 22, 2015

Enterprises TV Notes the Differences between Contractors and Employees

Even though the economy and job markets seem to be getting better, there are still people losing jobs and finding work later as freelancers and contractors. The Enterprises TV show explains the differences between the two.

There are specific differences between working as an independent contractor (freelancer) or employee. It is important to know what type of worker one is so they can best cover themselves in the matter of pay, work schedule and taxes.

Freelance work is done in the worker’s own timeframe and using their own equipment. Freelancers are generally considered independent contractors. There is no set time when work is start and end. The more freedom someone has to get the work done, they are indentified as contractors.

In addition, Enterprises TV notes that the U.S. IRS reviews the three categories of type of work: behavioral control, financial control and relationship of the parties. A number of facts must fit into these groups before the service can determine which type of worker someone is. And it all boils down to control: does the company control when someone works, does it control the manner in which it is done, or what equipment can be used to get work done? The more freedom a worker has over these factors, the more likely they are to be a freelancer and not an employee.

Always read any contracts for work thoroughly before signing them. Each U.S. state may have their own laws as to how a worker should be labeled and reimbursed (or not) for business expenses, such as gas and office supplies. If one accepts freelance work, be absolutely sure which worker category the job is paid under. This greatly affects which taxes the worker pays and how taxes are filed on tax return.

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