Why the $600 Contractor Reporting Rule Exists (Full Transcript)

[00:00:00] Speaker 1: I think their first references to this around the time of World War I, when the federal government was trying to raise revenue, and they set a reporting threshold of anything over at the time, $1,000, as best I can tell. And then finally, when it became a proper part of tax law for good, apparently until now, it was set at $600. Now of course, $600 even back in the early 1900s was an insane amount of money, but it was designed to deal with independent contractors, which it still does, which is why we care about it, because if Research Insights Company is paying someone to participate in a study, that person is an independent contractor rather than an employee of the company.