How the IRS distinguishes between contractors, full-time employees

08/7/2011 | Houston Chronicle (tiered subscription model)

Contracting out work instead of hiring full-time employees can help small-business owners save money by not having to withhold taxes or pay certain benefits; businesses should take care, however, to make sure they are classifying their workers correctly, writes management counselor Ron Consolino. Contractors must be allowed to determine when and where they work and have the freedom to pursue other clients, or else the Internal Revenue Service may view them as full-time employees and hit your small business with fines when you file your tax returns.

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