Records and documents must be retained until the statute of limitations expires. Generally, this is 3 years for tax returns and supporting records. Employment records must be retained for at least 7 years. Records regarding fixed assets or property are used to determine any gain or loss and should be retained for 3 years after the sale is reported.
For a complete listing of the statutes of limitations, read the following document: 
IRS Statute of Limitation Information
In addition to the amounts listed on the table below, there are special deduction rates for charitable use of providing relief related to Hurricane Katrina. These amounts are 34 cents per mile during Sept-Dec, 2005, and 32 cents per mile in 2006.
| Mileage Rates |
Business |
Medical/
Moving |
Volunteer/
Charitable |
| 2008 |
50.5 cents |
19 cents |
14 cents |
| 2007 |
48.5 cents |
20 cents |
14 cents |
| 2006 |
44.5 cents |
18 cents |
14 cents |
2005
Sept-Dec |
48.5 cents |
22 cents |
14 cents |
2005
Jan-Aug |
40.5 cents |
15 cents |
14 cents |
| 2004 |
37.5 cents |
14 cents |
14 cents |
As a general rule, you have the right to control or direct only the result of the work done by an independent contractor and not the means and methods of accomplishing the result. Meanwhile, you can control what and how services are performed by an employee.
We compiled a list of the 20 factors the IRS uses to judge whether and individual is an employee or independent contractor.
The key difference between an employee and an independent contractor is control--behavioral and financial control. The type of relationship between parties also matters. The IRS addresses this in Tax Topic 762.
This classification matters for reporting and tax purposes. Payments to an independent contractor of $600 or more are reported on Form 1099-MISC. Payments to employees are subject to payroll taxes and are reported on Form W-2.
