Wednesday, September 05, 2012 9:08:11 AM
http://www.cchil.org/irb/irs.html
We have included the answer a true independent contractor would give in parenthesis after each question:
-Are you required to comply with instructions about when, where, and how the work is to be done? (No.)
-Does your client provide you with training to enable you to perform a job in a particular method or manner? (No.)
-Are the services you provide integrated into your client's business operation? (No.)
-Must the services be rendered by you personally? (No.)
-Do you have the capability to hire, supervise, or pay assistants to help you in performing the services under contract? (Yes.)
-Is the relationship between you and the person or company you perform services for a continuing relationship? (No.)
-Who sets the hours of work? (You do.)
-Are you required to devote your full time to the person or company for which you perform services? (No.)
-Do you perform the work at the place of business of the potential employer? (No.)
-Who directs the order or sequence in which you work? (You do.)
-Are you required to provide regular written or oral reports to your client? (No.)
-What is the method of payment - hourly, commission or by the job? (Fixed price, not-to-exceed, and/or milestone payments are standard for independent contractors.)
-Does the client reimburse your business and/or traveling expenses? (No.)
-Who furnishes tools and materials used in providing services? (You do. This includes workstation, Internet, etc.)
-Do you have a significant investment in facilities used to perform services? (Yes. Key here is "significant." Lots of employees have a home computer.)
-Can you realize both a profit and a loss from your work? (Yes-very important-you must assume risk based on client satisfaction with your work.)
-Can you work for a number of firms at the same time? (Yes.)
-Do you make your services available to the general public? (Yes. -You should have business cards, stationery, invoices, and a business listing in the phone book, for example.)
-Are you subject to dismissal for reasons other than nonperformance of contract specifications? (No.)
-Can you terminate your relationship without incurring a liability for failure to complete a job? (No. If you work on a project or milestone, basis, you must deliver to receive payment for your efforts.)
In summary, true independent contractors usually have years of experience, multiple clients for whom they work, a home office, and a contract between themselves and the client that enforces the appropriate expectations of the 20 questions.
http://www.techprose.com/contracts_1099_criteria.html
“It ain’t so much the things we don’t know that get us into trouble. It’s the things we know that just ain’t so.” Henry Wheeler Shaw
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