Alex What does it mean to be an independent contractor in Texas?
An independent contractor is self-employed, bears responsibility for his or her own taxes and expenses, and is not subject to an employer’s direction and control. The distinction depends upon much more than what the parties call themselves. The Texas Unemployment Compensation Act does not directly define “independent contractor”.
Can a person be an employee or an independent contractor?
Whether a person is designated as an employee or an independent contractor has important implications, as under both state and federal law, independent contractors are afforded different rights than employees.
When does an employer gain control of an independent contractor?
As in copyright law, an employer can gain control of those rights if there is an assignment provision in the employment contract or independent contractor agreement. If you are unsure whether you own the rights to a work you created or a product you developed as an independent contractor, review your contract agreement.
What happens if you misclassify an employee as an independent contractor?
Under the Law. The rules surrounding whether a worker is an employee or independent contractor are complex. But it’s important to get it right, because when you misclassify an employee as an independent contractor, you open the door to significant legal and financial troubles.
Do you pay unemployment if you are an independent contractor in Texas?
On this page: Businesses with employees are subject to the Texas Unemployment Compensation Act (TUCA) and are liable to pay unemployment taxes. If workers are independent contractors, the employer is not liable to pay unemployment taxes on those individuals.
How to determine if a worker is an employee or an independent contractor?
TWC uses a 20-point comparative approach as a guide to determine if a worker is an employee or an independent contractor. Employers are responsible for classifying workers correctly. A worker who is called contract labor and whose wages are reported using IRS Form 1099 may not be an independent contractor.
Can a gardener be an employee or independent contractor?
Gardeners or trained professionals like electricians are commonly independent contractors. (To learn more about who qualifies as an employee, read Nolo’s article Independent Contractor or Employee: How Government Agencies Make the Call .) If a worker is an independent contractor, your federal tax responsibilities are few.
When do independent contractors have to pay taxes?
Independent contractors are required to remit their own taxes. If you expect to owe more than $1,000 when you file your taxes, you’re required to make quarterly tax payments.