What defines an independent contractor in relation to control and direction?

An independent contractor is primarily characterized by their ability to operate with a significant degree of autonomy in how they perform their work, which includes managing their own taxes and expenses. This independence is a critical distinction from employees, who typically work under the direct control and supervision of an employer and who receive benefits such as health insurance, retirement contributions, and paid time off.

Independent contractors are not subjected to the same level of oversight; they determine how to complete their projects, set their own schedules, and often provide their own tools and resources. This level of control over their work, including financial responsibilities—such as tax payments—solidifies their classification as independent contractors.

The presence or absence of employee benefits is a distinguishing feature, as independent contractors usually do not receive these benefits, further emphasizing their status as separate from traditional employees.