As a freelance worker, it is important to understand the difference between being an employee or a contractor. The IRS (Internal Revenue Service) has specific guidelines that determine your classification, and it is important to fill out the correct forms accordingly.

When you are hired as an employee, your employer deducts taxes from your paycheck and is responsible for paying Social Security and Medicare taxes. On the other hand, if you are a contractor, you are responsible for paying your own taxes, including self-employment tax.

The form that determines your classification is the Form SS-8, which is also known as the Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. This form allows the IRS to determine whether you are an employee or a contractor.

The form includes a series of questions that cover various aspects of your work, including who controls the work, how the work is performed, and who provides the tools and equipment. The IRS will review your answers and make a determination based on the information provided.

If you are unsure of your classification, you can also fill out Form W-9, which is the Request for Taxpayer Identification Number and Certification. This form is typically used by employers to obtain a contractor`s taxpayer identification number and certification.

It is important to note that misclassifying an employee as a contractor or vice versa can result in penalties and legal action from the IRS. It is therefore important to fill out the correct forms and understand your classification as a worker.

In conclusion, understanding the difference between being an employee or a contractor and filling out the correct forms is crucial for anyone who works independently. By staying informed and complying with IRS guidelines, you can avoid potential legal issues and ensure that your taxes are paid correctly.