What is an independent contractor vs self-employed?
Simply put, being an independent contractor is one way to be self-employed. Being self-employed means that you earn money but don’t work as an employee for someone else.
What kind of person is an independent contractor?
Information For… People such as doctors, dentists, veterinarians, lawyers, accountants, contractors, subcontractors, public stenographers, or auctioneers who are in an independent trade, business, or profession in which they offer their services to the general public are generally independent contractors.
What’s the difference between an employee and a dependent contractor?
Under U.S. law, a worker is either an employee or an independent contractor. There’s no third choice. Not so in Canada. Our neighbor to the north recognizes the legal status of “dependent contractor.” A dependent contractor is a worker who operates as an independent business in most respects, but who works primarily for just one company.
Can a company discharge a worker who is an independent contractor?
A worker who performs for more than one firm at a time is generally an independent contractor. If a worker makes his or her services available to the general public on a regular and consistent basis, that worker is generally an independent contractor. An employer’s right to discharge a worker tends to show that the worker is an employee.
Are there any laws that protect independent contractors?
Most states also have unemployment and work-ers’ compensation laws, which obligate employers to pay, directly or indirectly, for medical treatment or lost wages, or both, for employees who are injured while at work or who lose their job. None of these laws protect independent contractors.
What if you are a “independent contractor”?
In general, if you’re an independent contractor, you are working for yourself, and the company is your client. You are responsible for paying your employment taxes, and you are not entitled to company-provided or government-mandated employee benefits (including medical and/or dental).
What is an employee vs. an independent contractor?
An employee works solely for the employer, whereas the independent contractor works for several clients. Inputs like tools, materials, equipment or any other resources to perform the task are provided to the employee by the employer. On the other hand, the independent contractor uses his own resources.
What does independent contractor stand for?
An independent contractor, or freelancer, is a person or entity contracted to perform work for-or provide services to-another entity as a nonemployee. In the United States, independent contractors are considered sole proprietors or single-member limited liability companies (LLCs).
What are the requirements to become an independent contractor?
These requirements, which generally apply to independent contractors, sole proprietors, and members of partnerships, are that: You must file an annual income tax return (Form 1040). This requirement applies if you earned $400 or more through self-employment. You must pay estimated taxes on a quarterly basis.