Is a "Contract Employee" the same as an "Independent Contractor"?

Question

I am to work as a contract employee at a company. They will pay to my own company and I have to take care of my taxes.

My company is an LLC, the only person in it is me, and I am not sure if in this case a "Contract Employee" the same as an "Independent Contractor".

We will sign an agreement of my dutties to his company and will be paying me by job done.

What would be the difference?

Answer 1

Independent Contractors vs. Employees

Before you can determine how to treat payments you make for services, you must first know the business relationship that exists between you and the person performing the services. The person performing the services may be -

* An independent contractor
* A common-law employee
* A statutory employee
* A statutory nonemployee

In determining whether the person providing service is an employee or an independent contractor, all information that provides evidence of the degree of control and independence must be considered.

It is critical that you, the employer, 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.

Read more at: http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

Hope this helps.

Answer 2

A Contract Employee and an Independent Contractor are about the same thing. Both allow the hiring company to avoid Employer FICA, SUI, Workers' Comp, and in some states Disability. Your LLC will need to pay you a salary that uses up most of the revenue from your client. That way you get your taxes paid as-you-go Anything left in the LLC at the end of the year after this and all other expense is taxed as ordinary income to you. Make all the expenses possible be the LLC's. Let it reimburse you for mileage to the client up to IRS limits. Let it buy all the supplies, client meals, etc. Be sure you have an LLC bank account separate from your personal account.

Answer 3

In this case, same.
You will be responsible for paying your own taxes. Also any necessary insurance protection.
They may or may not carry backup insurance. I did for subs, when I was in business.