If I hire a contract paralegal, are there requirements to withhold income and social security taxes so that I do not run into problems with the IRS?
Generally not. However, you should determine the business status of the contract paralegal. In other words, does the contract paralegal satisfy the requirement to qualify as an independent contractor? In determining whether a paralegal is an independent contractor, the IRS looks at whether the contract paralegal has more than one client; pays his or her own business expenses; is allowed to prioritize his or her work assignments; works at your office or at home; sets his or her own hours, and whether you provide training for the contract paralegal to accomplish assignments. If the contract paralegal you hire does not meet the requirements for an independent contractor, you may be deemed to be his or her employer and may be assessed penalties for failure to withhold income and social security taxes. It may be advisable to enter into a written agreement which states that the paralegal is responsible for paying his or her own income taxes and that the firm will not provide workers compensa
