From the IRS
“It is critical that business owners correctly determine whether the individuals providing services are employees or independent contractors.
Generally, you must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid to an employee. You do not generally have to withhold or pay any taxes on payments to independent contractors.
Select the Scenario that Applies to You:
- I am an independent contractor or in business for myself
If you are a business owner or contractor who provides services to other businesses, then you are generally considered self-employed. For more information on your tax obligations if you are self-employed (an independent contractor), see our Self-Employed Tax Center.
- I hire or contract with individuals to provide services to my business
If you are a business owner hiring or contracting with other individuals to provide services, you must determine whether the individuals providing services are employees or independent contractors. Follow the rest of this page to find out more about this topic and what your responsibilities are.” [More]
From the National Association of Realtors® (FAQs)
“1. What is the difference between an independent contractor and an employee?
Employers have a significant degree of control over their employees, and are able to direct when, how, and where employees accomplish their tasks and responsibilities. Employers also often provide the necessary “tools of the trade” to their employees. In contrast, an independent contractor generally can determine when, how and where to perform their work, and is responsible for any necessary tools or equipment necessary to provide the services.
For legal purposes, the key distinction between an employee and an independent contractor is often determined by the amount of control a business exerts over the worker. The more control a business exerts over the worker, the greater the likelihood the worker will be deemed an employee.
- Are brokers required to classify their salespeople as independent contractors?
No. Brokers can classify their real estate salespeople as either employees or as independent contractors.” [More]Posted in Legislation - Federal, Legislation - Oregon, Miscellany, Real Estate Laws, Realtor Risk Management, Realtors, Tax Issues | Tagged Realtors, Taxes