Quick Approaches of Contractor

She was employed as a full-time employee at first, but after eight months, her role was changed to that of an independent contractor. This prompted two questions in my mind: Is it easier for an employee to serve as an independent contractor or as a full-time employee? And why would a company choose one over the other? I strongly suggest you to visit Kaps Construction Inc. to learn more about this.
Several regulations have been passed by Congress over the last 40 years that define the differences between workers and independent contractors in terms of pay, benefits, and relationships with their employers. The Revenue Act of 1978, Section 530, laid the foundations for the legislation we have today. There was growing anxiety about the future of the Social Security programme in the 1960s and early 1970s. Some have blamed the funding deficit on independent contractors who have stopped paying self-employment tax. The Internal Revenue Service increased its audits as a result of this perception. As a result, some have argued that the IRS was too strict in classifying jobs as employees rather than self-employed independent contractors, and that its requirements were inconsistently applied. Congress responded by enacting Section 530, which provides workers with a safe harbour by prohibiting the IRS from reclassifying independent contractors as employees retroactively. Employers were shielded from substantial fines and back taxes under Section 530 as long as they met the law’s criteria.
The IRS required a fair justification for treating employees as independent contractors, continuity in how those workers were handled, and adequate tax reporting using 1099 forms for those classified as contractors in order for employers to qualify for safe harbour under Section 530. Despite the fact that Section 530 was meant to be a temporary solution to the audit dilemma of the 1960s and 1970s, it has become the permanent basis for today’s worker classification regulations. Following legislation, such as the Small Business Job Protection Act of 1996, clarified Section 530’s terms, as well as the principles of safe harbour availability and who bears the burden of proof.