Definition: A worker classified as an employee under the applicable legal test. For federal tax purposes, the right to control the work and the overall relationship are relevant considerations.
Example
A brokerage hires an office employee, directs the work, and handles applicable payroll obligations.
Keep the distinction clear
A label in a contract does not conclusively establish classification. Certain licensed real estate agents qualify as statutory nonemployees for federal tax purposes when the required conditions are met.
Related terms
Personal Assistant (Real Estate) ยท Compensation
Keep studying
References: IRS Topic 762: independent contractor versus employee
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