How to Determine Self-Employed Status

If you're self-employed, your clients don't have to pay workers' compensation, withhold income tax or pay into Social Security for you. Some employers try to dodge these responsibilities by claiming employees are self-employed; some employers simply mess up. Use the IRS guidelines to find out the facts about your status.

Instructions

1

Judge how much control the company has over the way you work. If you're self-employed, the people hiring you are clients, with limited say over your dress, hours of work and methods. If you're an employee, they lay down the rules.

2

Follow the money. If the company pays you a salary, owns all your equipment and reimburses you for expenses, those are signs your status is "employee." If the equipment is yours and you're paid by the job, you're more likely self-employed.

3

Look at whether your work is open-ended and could potentially go on indefinitely. Freelancers take on specific assignments, usually with deadlines and often under contract.

4

Review your job based on all three standards and decide on your status. There's no one rule that conclusively determines if you're self-employed so you have to consider all aspects of your job.

5

Complete IRS form SS-8; if you're still not sure, and ask the government to decide. It may take several months to hear back, but the IRS will give you the definitive decision on what category you fall into.

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If you're self-employed, your clients don't have to pay workers' compensation, withhold income tax or pay into Social Security for you. Some employers try to dodge these responsibilities by claiming employees are self-employed; some employers simply mess up. Use the IRS guidelines to find out the facts about your status.

Instructions

1

Judge how much control the company has over the way you work. If you're self-employed, the people hiring you are clients, with limited say over your dress, hours of work and methods. If you're an employee, they lay down the rules.

2

Follow the money. If the company pays you a salary, owns all your equipment and reimburses you for expenses, those are signs your status is "employee." If the equipment is yours and you're paid by the job, you're more likely self-employed.

3

Look at whether your work is open-ended and could potentially go on indefinitely. Freelancers take on specific assignments, usually with deadlines and often under contract.

4

Review your job based on all three standards and decide on your status. There's no one rule that conclusively determines if you're self-employed so you have to consider all aspects of your job.

5

Complete IRS form SS-8; if you're still not sure, and ask the government to decide. It may take several months to hear back, but the IRS will give you the definitive decision on what category you fall into.