What is the difference between independent contractors and employees?

An independent contractor is a person contracted to perform work, but they can control how to do their work. The employer is interested only in the contract employee's results and they typically work unsupervised. Independent contractors must pay their own Social Security and Medicare taxes. 

Generally, a worker who performs services for you is your employee if you have the right to control what will be done and how it will be done. Generally, people who do business for themselves aren't employees. For example, doctors, lawyers, veterinarians, and others in an independent trade in which they offer their services to the public are usually not employees. However, if the business is incorporated, corporate officers who work in the business are employees of the corporation.

An employer may pay an independent contractor and an employee for the same or similar work, but there are important legal differences between the two. For the employee, the employer withholds income taxes, Social Security, and Medicare from wages paid. For the independent contractor, the employer does not withhold taxes.

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