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Q: Can you tell me which employment forms a contract employee needs to complete before starting to work for my company? A: The first question is whether your new worker is an employee or an independent contractor. This is not a matter of choice, but is dictated by the specific circumstances of the working relationship. The key element is who controls the work. You most likely have an employee if:
You most likely have an independent contractor if you specify the end result, but the worker:
If you hire an independent contractor, you’ll report payments you make to the contractor on Form 1099-MISC. The form is required if you pay at least $600 to the independent contractor during a calendar year. The payments that are reported via Form 1099 are not subject to federal income tax withholding or other payroll taxes. You’ll issue one copy of the 1099 to the contractor and send one copy to the IRS at the end of the year. To complete Form 1099, you’ll need specific information from the contractor. And the easiest way to ensure that the information is accurate is to have the contractor complete Form W-4. The form asks for information such as name, address and tax identification number. The form is not required and does not get sent to the IRS. But it does make sure that you have the independent contractor’s correct data. And it’s a good idea to get that form in advance of any payments. Get More Answers The NASE's small-business experts are here to help you understand the ins and outs of operating a successful small business. And access to these professionals is free with your NASE Membership! Just go online to the NASE's Business Learning Center where you can ask the experts questions about:
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Courtesy of NASE.org https://www.nase.org/about-us/media-relations/nase-in-the-news/2012/06/29/Ask_The_Experts_New_Contract_Employee_Forms