Based on Internal Revenue Service rules, what criteria distinguish a consultant from an employee?

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Originally Posted by tuppert

Based on Internal Revenue Service rules, what criteria distinguish a consultant from an employee?

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Hello t:

The distinction isn't between consultant and employee... It's between a contractor and an employee. Therefore, if you're a self employed contractor, you probably have a contract. If not, that doesn't eliminate you.

I suppose your employer/contractee is saying you're a contractor/consultant so he doesn't have to pay his share of FICA, and/or didn't deduct anything from your paycheck... Or, something like that... If not, please tell me.

You could be considered a self employed/consultant/contractor if your employer doesn't set your hours, and pays you for the task you complete rather than the hours you put in. If you're expected to BE at work during certain hours, you're an employee.

excon

The determination of contractor versus employee can be a bit fuzzy, but in general a contractor does not have a "recurring" relationship with the client (i.e. doesn't necessarily work only for that company, and/or works irregularly), is not paid by the hour (or week, or month), is expected to provide his own tools and training, and is not required to be present at the employer's place of work for a set time. This site gives as good list of 20 factors that can affects the "employeee versus contractor" question:
Twenty Factor Checklist to Determine Independent Contractor vs. Employee Status - Small Business