Everyone has heard about how the IRS is cracking down on the qualification of ICs. When is it correct to use a 1099 vs a W2? If you have ever asked yourself this question you can go to http://www.comptroller.ilstu.edu/downloads/20-factor-test-for-independent-contractors.pdf. This is a 20 factor test that helps you determine if being an IC is right for you. If you are filing your taxes incorrectly there are 3 options you can take to correct this:
- Ask your employer to allow you to work appropriately as an independent contractor.
- Ask your employer to hire you as a W2 employee so that you are working legally.
- Hire an employer-of-record so that you are technically a W2 employee, but still allow you to be your own boss.
Written by Amanda Freeman, a Consultant’s Financial Planner