1099’s Can Be Frightening!

October 19, 2010 at 4:37 pm Leave a comment

You know you need additional staff to run your company effectively, but not sure if your plan includes
an independent contractor or an employee. Trying to figure this out is a scary task in itself. It is always best to consult your CPA to determine what suits you best. But here are some interesting pointers to help you out.

If you have an independent contractor, you do not set their hours of operation. You do not provide the tools the contractor needs to perform his or her duties. The independent contractor can at his or her discretion hire others to assist in the project that was given to him or her to complete.

An excellent example of a 1099 contractor is a freelance writer. He or she works out of their home, is given a project and a deadline for completion. The computer and software that is used to write the piece is completed on the freelancer’s equipment. If they decide to write the piece at midnight, they have that right. They can also write for many other businesses as that is not controlled by their client.

 

Generally, an employee, on the other hand, is subject to set work hours, may use equipment and software that is owned by the business. The employee may be restricted to working only for the employer unless “moonlighting” is allowed. Some businesses require employees to adhere to a non-compete policy.

 

 

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Entry filed under: 1099, Bookkeeping, Business Sense, QuickBooks. Tags: , , , .

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