Is the workers pay based on units of time (hour, week, month)?
Payments based upon time indicate control; the hiring firm is asking for an accounting of the worker’s time. This is similar to W-2 employees of the company. 13. Are the worker’s business or traveling expenses paid by the hiring firm? Employees are reimbursed for expenses. An independent contractor will figure in overhead expenses when formulating a bid for the project. 14. Does the company furnish the tools or supplies used to perform the service? An independent business enterprise should have the tools and supplies to do a job. Using company supplies poses a similarity to W-2 and control. 15. Does the worker have a significant investment in his business? The IRS does not recognize a home office, fax, email and business card as a significant investment. They like to see recurring and ongoing expenses such as office rent, marketing expenses, employees, business expenses, etc. 16. Can the worker realize a profit or suffer a loss? An independent contractor is considered to be a business
