Is your worker truly an independent contractor?

The IRS often uses the “ABC Test” when reviewing whether a worker is truly an independent contractor. To qualify, you must prove:

(A) The worker is free from your control and direction.

(B) The work performed is outside your usual course of business.

(C) The worker is engaged in an independent trade or business.

If any of these conditions aren’t met, the worker is considered an employee. For example, hiring someone to handle overflow work in your business would fail the test. Remember—the IRS presumes workers are employees until you prove otherwise.