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How Independent Contractors Can Make Your Easy Home Business Shine - Articles Surfing
Independent contractors are the backbone of many easy home businesses. They can help make your business run like gangbusters. But be careful. If you don*t follow the IRS rules, you may end up with one big aching bill.
Employees are costly. Besides wages, there are taxes, insurance and benefits to pay. This is enough to take a big bite out of income. With independent contractors, you pay them by the project and that's it.
Using independent contractors looks like the way to go. There's only one thing:
You must follow the IRS rules or your business can get into costly trouble.
Let's look at the IRS rules. They tell us what independent contractors do and what they do not do.
Independent Contractors do the Following:
* Use their own tools and work in their own space
Independent Contractors do not do the Following:
* Take part in the day-to-day work of your company
Paperwork You File for Independent Contractors:
The paperwork you file with the IRS is relatively simple. For each contractor paid over $600, fill out Form 1099 and include the contractor's social security number or tax ID. The contractor receives a copy in January and the IRS in February.
This is What Breaking the IRS Rules Means:
Breaking the IRS rules can mean money troubles. The IRS will *reclassify* the independent contractor as an employee. If this happens, you end up paying back taxes, fines, penalties and interest. You may have to pay past benefits * even if you do not pay benefits to your own employees.
Following the rules is easy, though. Include them in the contract your independent contractor signs. Treat the contractor as a separate business owner with his or her own job to do.
How to Find the Best Independent Contractors:
Many home business owners find top-rated independent contractors by asking other business owners for recommendations. Other ways of finding them is by asking around at trade shows. Leave your business card and get the word out you have a project to outsource. Also, get in touch with associations.
It is worth doing an Internet search as well. Post your needs at several free forums.
Before you know it, the independent contractors you choose will help transform your easy home business into a powerhouse. In the end, you'll be so glad you hired independent contractors.
Copyright © 1995 - Photius Coutsoukis (All Rights Reserved).
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