Which statement correctly defines an independent contractor?

The correct definition of an independent contractor is that they are characterized by having the right to control only the results of their work, without the payer dictating how the work is performed. This aligns with common understandings in tax law, where independent contractors operate with a significant degree of autonomy in their work processes. They engage in their business on their own terms and are typically responsible for their own expenses, unlike employees who face more oversight and control from their employers.

Independent contractors provide services to clients or the general public and essentially own their business practice, making them distinct from employees in the way work engagements are structured. This is an important distinction in tax law, as it influences how income is reported and taxes are assessed for these types of workers versus traditional employees.

In this context, individuals who are classified as independent contractors take on projects, meet deadlines, and deliver outcomes but have the freedom to determine how to achieve those results. This arrangement allows for flexibility and is common in many professions, such as freelance work or consultancy.