What is needed to hire an independent contractor

Illinois businesses may be interested in hiring independent contractors. Doing that requires meeting certain requirements that are used to classify a worker as an independent contractor. Meeting these conditions is particularly important at tax time. A business is not required to provide benefits such as health care, unemployment and Social Security tax when a worker is hired as an independent contractor. The worker becomes responsible for paying state and federal taxes and must obtain health insurance and other benefits that are normally the employer's responsibility. Independent contractors must file their own taxes using the 1099 form provided by the business.

In order to pass muster by the IRS, knowing what classifies an individual as an independent contractor and taking steps to formally establish it is important. The independent contractor works where, when and how they want as long as they accomplish the tasks they are assigned. For instance, many independent contractors work at home and have flexible hours. They are also able to hire assistants who work for them. Since they are not employees, they are able to work for multiple businesses without interference. They may be paid for each task completed or on commission if the job involves sales.

Businesses usually supply a contract known as an independent contractor agreement that specifies the individual is not an employee and outlines the responsibilities both the business and the independent contractor have to one another. Additionally, the independent contractor submits invoices to the business in order to secure payment.

Setting up a contract that clearly delineates the duties, job function and obligations of an independent contractor is essential. As in any contractual agreement, the insight offered by an attorney may be beneficial.

Source: Entrepreneur, "Hiring an Independent Contractor", Joan E. Lisante, October 11, 2014

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