Employee or Independent Contractor?

Treasury Inspector General for Tax Administration (TIGTA) stated in a new audit that “misclassification of employees as independent contractors is a nationwide issue affecting millions of workers that continues to grow and contribute to the tax gap.” Treating a worker as an independent contractor typically saves money for both the employer and the worker. The employer avoids payroll taxes, including FICA taxes of up to 15%, and the worker is able to claim more tax deductions as an independent contractor than an employee.