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The economy might be improving, but there are still a lot of people who are pasting together their financial obligations through temporary, part-time employment and work by contract. In the six months leading up to July, 2013, temporary staffing agencies<\/a> gained an average of 20,000 full-time equivalents on a monthly basis, which continued an upward trend that has been in place since the recession. Of course, 20,000 full-time equivalents could mean 30, 40, or 100,000 people being connected to part-time work via staffing agencies.<\/p>\n Part-time employment and temp agencies are taking an increasingly permanent role in the job market, but many people do not know the difference between part-time and full-time employment \u2013 at least as it relates to their taxes. One important question is:<\/p>\n How will I file my taxes at year-end when I am working for a temp agency?<\/strong> When working through a staffing agency, you are considered an employee of the staffing agency. The business you are working for is considered a client of the staffing agency, and you are providing services to the client. You can expect to receive your W-2 stubs in January with the amount you have been paid by the staffing agency, just as you would for a full-time employer.<\/p>\n READ: How does the Federal Insurance Contributions Act affect my taxes?<\/a><\/p>\n You might also work with a number of temp agencies and report multiple W-2s, but at least you do not need to file for each individual part-time gig.<\/p>\n When am I working by contract, and when am I part-time?<\/strong> An employer has the right to control or direct the means and methods of its employees, which lead to the end result of the work. With an independent contractor, a firm is only in control of the results of the work.<\/p>\n For example, an employer dictates when employees can work from the office, whereas a business can only provide a deadline to an independent contractor.<\/p>\n
\nThe IRS differentiates between independent contractors and employees, but full-time and part-time employees often treat their taxes in the same way. As any type of employee, your taxes will be withheld from your paycheck<\/a> and remitted by the business to the government. Your employer will also pay half your payroll taxes for you.<\/p>\n
\nBusinesses are required to perform a number of services for employees but have much less obligations to their contractors. But there are substantial penalties a business will face if it misreports a business relationship.<\/p>\n