Correct Classification: Employee or Independent Contractor

Businesses must understand whether the relationship with workers determines their positions to be that of an employee or of a contractor. The IRS has specific guidelines to determine the correct category. While the IRS believes that some owners intentionally classify employees as contractors so they can avoid paying payroll taxes (Social Security, Medicare, & Unemployment Taxes), you have resources available to help you know what is correct and avoid the penalties that could result from an audit.

Click here to see Robert Moskowitz’s article about the crackdown by the IRS and the tools to prevent problems at your company. His article provides direction as well as a link to the IRS 20 Factor Test – Independent Contractor or Employee and the form SS-8 which can be completed and submitted to the IRS to receive their determination.

Robert Moskowitz is an Emmy-winning author and editor with a knack for conveying complex and difficult topics in a friendly, down-to-earth style.



Perlinger Consulting, Inc., is a firm that provides QuickBooks® Consulting and Training services to small to medium sized businesses in a variety of industries. It is owned and operated by Glenn Perlinger, a QuickBooks® Certified ProAdvisor. Glenn has a Bachelor of Science Degree in Computer Information Systems Management from Colorado Christian University.

Leave a Reply

Your email address will not be published. Required fields are marked *