How do I know if my worker is an independent contractor or an employee?

Do you hire independent contractors to work with you in your business?
If so, you need to know what factors the IRS considers when determining whether a worker is an independent contractor or an employee.
Lately the IRS has been cracking down on businesses that wrongly classify their employees as independent contractors (and thereby avoid paying employment taxes). If the IRS learns that your business has misclassified an employee, you could be subject to back employment taxes as well as penalties.
Watch this video for a quick overview of what the IRS looks for when determining whether your worker should be classified as an independent contractor or an employee. You'll also learn the general rule of thumb to help you know the difference.
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Now that you have a basic understanding of the differences between an employee and an independent contractor, what do you think? How do you plan to deal with this issue? Let me know in the comments.

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