Who are employees for professional tax purpose?

According to the IRS' basic definition, 'anyone who performs services for you is your employee if you can control what will be done and how it will be done'. It doesn't matter if the employee has a lot of freedom of action as long as 'you have the right to control the details of how the services are performed' (IRS. gov article, 'Employee (Common-Law Employee)).

Also, you consider the type of relationship between you and the person performing the services. Employees have employee type benefits (pension plan, insurance, vacation pay, etc.), not written contracts. Employees have a continuingrelationship, and the work that they perform are a key aspect of the business. Employers are required to withhold and/or pay taxes (income, Social Security, Medicare, unemployment, etc.) on employee earnings.

But there are grey areas. If it's unclear whether a worker is your employee, file Form SS-8 (Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding) with the IRS. Either the business or the worker can file this form. The IRS will make an official determination of the worker's status. The determination process can take about six months.