posted May 7, 2012, 7:27 AM by Patty Langlois
It is critical that you, the employer, correctly determine whether the individuals providing services are employees or independent contractors. Generally, whether a worker is an employee or an independent contractor depends on how much control you have as a business owner. The IRS uses three broad categories to determine this: behavioral control, financial control, and the type of relationship. Make sure you receive Form W-9 from all contractors to obtain the taxpayer identification number and to certify that no backup withholding is required on payments you make to contractors. Get the W-9 from any contractors when you make the first payment to them so that you have it on file and do not have to scramble at the end of the year when the 1099 filing deadline looms.