How Do You Follow The IRS Regulations For Hiring Independent Contractors?
Your company may use independent contractors or freelance workers to complete special projects. According to IRS regulations, these employees differ from permanent staff members because they do not have access to benefits or wage withholding. Your accounting staff must know how the IRS regulations regarding independent contractors to avoid audits and financial penalties. Follow these steps. Understand the reasons why a Form 1099-MISC must be filled out for an independent contractor by visiting the IRS Web site (see Resources below). This informational form must be filled out for each independent contractor who makes more than $600 in a calendar year. Depending on the number of contractors you use, you may want to send out Form 1099-MISC to every freelance worker. Work with your accountants to determine how independent contractor funds may affect your company’s taxes. Since independent contractors do not have funds withheld during the fiscal year, they are responsible for their own Soci
