Am I an employee or an independent contractor?
For tax purposes, it’s based on how you are paid and the type of year-end form you receive from the person who paid you.
If you’re an employee:
- Social Security and Medicare taxes (FICA) were deducted from your paycheck each payday.
- You got a W-2.
If you’re an independent contractor:
- The checks you received were for the full amount you earned, nothing was deducted for FICA.
- You got a 1099-MISC with an amount in Box 7 (Nonemployee compensation).
Independent contractors are considered self-employed, and their net income or loss is calculated on a Schedule C.