Devoted to Managers and those that seek to improve their management skills

From the previous post you can see that hiring an independent contractor can be a little tricky. Here are a few steps to follow to persuade the IRS that the worker in question is indeed an independent contractor.  

1)    Create a simple contract documenting the independent contractor relationship. You may wish to specify in the contract that the worker is responsible for his/her own insurance (including workers’ compensation).  

2) Pay for work by the job instead of by the hour, the week or the      month.  

3) Have all workers submit invoices for work before paying them. 

4) Don’t forget to complete IRS Form W-9 (Request for Taxpayer Identification Number) when you first start working with a contractor (you’ll need this info for your year-end tax filings).  

These few steps, if followed faithfully, should keep you from having bureaucratic headaches from the IRS. The use of independent contractors is becoming a very useful tool; keep it from becoming a red-tape nightmare.