Independent Contractor Job Application Form
Specifically, the following occupations are independent contractors under IRS rules: If you are confused about the classification of an independent contractor, complete Form SS-8 and file it with the IRS. The IRS will formally review and determine the classification. Contractors and employees do not have to submit Form W-9 to the IRS. This form is used for internal purposes to collect the information necessary to complete Form 1099-MISC. Business owners should keep the contractor`s Form W-9 for four years after hiring in case questions arise in the future. If you hire an external employee, you will first need to get their tax information before you can start paying. Each independent contractor must complete a Form W-9, which is a taxpayer identification and certification application. The purpose of the form as an employer is to understand the differences between an independent contractor and an employee so that you can be sure that you comply with federal and state tax laws. Companies use independent contractors to outsource their work, so instead of a full-time IT department, a company can hire an independent contractor to perform work with a limited scope and for a limited time. Hiring is then done through an independent contractor app that is different from an employee app.
Make payments only on submitted invoices. Do not accept expense reports. Equipment, mileage and similar items are part of IC`s business expenses, not yours. Keep all invoices and make sure they comply with Form 1099-MISC. Also note that independent contractors have their own employees or may hire other independent contractors (subcontractors). In both cases, they should be aware of their tax responsibilities, including their reporting and reporting obligations, for those workers. Many companies use independent contractors instead of full-time employees to reduce costs. Independent contractors are not employees, but often refer to themselves as freelancers, contractors, consultants or self-employed. As a principal, you must ensure that the independent contractor meets the definition of the Act, including the Fair Labour Standards Act. Part I of the form contains general information about the taxpayer, including: An independent contractor may be one or more persons working in a separate business from you. This includes freelancers (such as artists, planners or web designers, an external company (.
B cleaning work), a professional such as a lawyer or tax advisor – anyone you pay for services and who is not an employee. Independent contractors are considered self-employed and own their own business. Here`s how the IRS defines the difference: “The general rule is that a person is an independent contractor when the payer has the right to control or direct only the result of the work, not what is done and how it is done.” You also need to make sure that background checks aren`t done randomly – every candidate should go through the process – to avoid complaints of discrimination later. Independent contractors are often referred to as “1099 employees” – although this is an inappropriate term as Forms 1099 do not apply to employees. You have to decide whether to hire someone as an employee (with the associated responsibilities) or keep them as a contractor (and lose some degree of control). The IRS requires contractors to complete a W-9 form, apply for a tax identification number and certification that you must keep for at least four years after hiring. This form is used to request the correct name and tax identification number (TIN) of the employee or their unit. A TIN can be a Social Security Number (SSN) or an Employer Identification Number (EIN). Make sure the contractor ticks the box that exempts them from withholding tax.
As a separate business unit, the IC should report its own taxes on self-employment. Zenefits prepares and stores this document for companies that hire and pay contractors through the platform. If you receive a Form W-9 with a FATCA exception code and you know that the person is a specific U.S. person, you cannot rely on the form to treat the person as exempt from FATCA reporting. Less paperwork is needed because the relationship is between two independent businesses and you don`t have to withhold payroll taxes (income taxes and Social Security/Medicare taxes) from an independent contractor. If you`re not sure if the person is an employee or independent contractor, the IRS, the U.S. Department of Labor, your state compensation board, your state workers` compensation insurance agency, and your state Department of Labor will provide guidelines for the call. If, after verifying the information, you are still unsure whether a worker is an employee or a COI, submit [Form SS-8 to the IRS. The IRS will review the evidence and formally determine the employee`s status. This is especially useful for companies that repeatedly purchase the same type of services. Instead, independent contractors complete an application for a Tax Identification and Certification Number (Form W-9) and submit it to their employer so that they can receive any other income (Form 1099-MISC) from their client at the end of the taxation year.
Other information you can request includes diplomas, transcripts, and certifications, if applicable. Businesses that pay independent contractors $600 or more in a given tax year must report this compensation to the IRS. .
