Smith + Schwartzstein
Located In Morristown, NJ and New York, NY

Hiring an independent contractor: Considerations

Your business may benefit from working with an independent contractor. If so, you need to know what to do to hire this person and keep the correct documentation. It's much easier to work with an independent contractor than to hire an employee. There are only a few documents that you need to collect, but getting them is very important.

You won't need to set up payroll taxes for the individual, because he or she will pay taxes on his or her own. You do still need to obtain the person's tax ID and determine if he or she is qualified to take on the job.

Independent contractors are essentially their own bosses. That means that they run their own businesses and are not your employees when hired. Freelancers of all kinds are independent contractors including attorneys, tax preparers, artists and writers. Anyone you pay to do a service but don't hire on as an employee is likely an independent contractor.

For their services, you'll need to provide a W-9 form. You have to document how much you pay to the outside worker and provide the freelancer with a W-9 form if he or she makes $600 or more working for you in a single tax year.

Also obtain an application with resume or documents to prove the person's qualifications, so you know that he or she is capable of the work you want to have done. Once you have that, you'll be able to move forward with hiring and a better chance of seeing the job done without trouble or the need for legal assistance.

Source: The Balance, "3 Documents You Need When Hiring a Contract Worker," Jean Murray, accessed April 12, 2018

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