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This Employment Tax Resource Courtesy Of
The Independent Contractor Report
James R. Urquhart III, Esq.
Editor

Image of Three Law Books

Self-Assessment Quiz

Three-questions to help you decide
if you need an independent contractor agreement.

Honesty counts!

IC = Independent Contractor

Do You Need An
Independent Contractor Agreement?

1

 Does your firm use ICs on a regular basis?

Example: A court reporting firm uses court reporters every day and treats them as ICs and not as employees.

Yes

No

2

 Does your firm pay a total of $10,000 per year or more to ICs?

Example: A telemarketing firm uses ICs. Each year the firm provides Form 1099s to its telemarketers. All totaled, the Form 1099s exceed $500,000.

 Yes

No

3

 Does your average IC receive 50 percent or more of his or her IC revenue from your firm?

Example: A messenger & delivery firm treats its drivers as ICs and not as employees. The typical driver receives a Form 1099 for around $15,000. Most drivers deliver only for the firm. A few drivers deliver for other firms, but the other work is usually far less than 50 percent of their annual delivery related income.

 Yes

No

If you answered "Yes" to all three questions,
then you should be using an independent contractor agreement.

Word to the Wise
"Always remember this: Even a well-drafted independent contractor agreement will not change a clear employee into an independent contractor. However, in close cases a well-drafted agreement can make the difference between winning or losing an IRS or State employment tax audit or other worker status matter."

— James R. Urquhart III
Attorney at Law

Click here to view Mr. Urquhart's Resume

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Updated December 27, 2009