To determine whether an individual is an employee or is self-employed commonly referred to as an independent contractor; an analysis should be made of the individual's employment activity. Factors such as the following should be considered in the evaluation of the individual’s employment activity. For example we may look to see, if the individual works for many firms or clients or just work for one firm or client, if the individual's services are readily available to the public, if they determine their own work hours and schedules, or does the individual receive regular payments from one firm or from a variety of firms. All of these factors play an important role in determining who is an employee and who is an independent contractor.

After reviewing Revenue Ruling 87-41 it is a little easier to determine who is an employee under the common law rules. Under these rules twenty factors have been identified in aiding the determination of an individual as an employee. Some of those factors include Instructions where the person for whom the services are performed have the right to require compliance with instructions to determine whether an individual is an employee or is self-employed no one factor should be considered as controlling, but rather all these factors should be reviewed.
From a taxable income perspective, I believe it is better to be an independent contractor because all trade or business expenses are deductible for AGI, whereas, if the individual is an employee, any unreimbursed employment-related trade or business expenses are deductible as miscellaneous itemized deductions subject to the 2 percent limitation. In this case an independent contractor will have a better chance of reducing their tax liability a lot more because there will be no limit on claiming expenses. Avoidance vs. Evasion.
I think Judge Learned Hand’s distinction is pretty