Friday, November 13, 2009

Self-employed? What the IRS thinks.

For tax reporting purposes, the IRS has several classifications of working individuals including:

  • Contractor
  • Employee
  • Self-employed
The first two categories were covered in a previous blog post.  In this one we review the IRS rules on what it considers self-employment.

The IRS considers a person as self-employed if:

The individual has a trade or business as a sole proprietor; or

The individual is a member of a partnership or limited liability company (LLC) that files a form 1065

Persons might also be considered as self-employed if owning a part-time business in addition to a regular job.  The weekend handyman or computer tech with his own tools and customers might be considered self-employed despite having a similar employee position with a company.

A complete summary of all employee listings is on our web site:

For additional details, please consult the IRS small employment web site:

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