CONTRACTORS, PROFESSIONAL SERVICES
Independent Contractors Taxes
Many entrepreneurs work with independent contractors on a regular basis to complete projects. While contractors and employees may carry out similar tasks, a key distinction between an independent contractor and an employee is that an independent contractor has the right to control what, when and how work will be done. Generally, the only control you, the entrepreneur, has throughout the process is to dictate what the result of the work is. For many entrepreneurs, it is favorable to hire independent contractors since you are not required to pay employer payroll taxes on their earnings or provide other benefits that would normally be included as part of an employee's compensation package. Despite the tax benefits of hiring a contractor, you should carefully consider how the people you hire should be classified since choosing incorrectly could end up costing you.