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Should I Hire an Employee or a Contractor?How to hire a contractor Contractor hire knowing when Independent contractor vs employee Contractor vs employee If so, you’re not alone. Knowing when it’s time to hire a contractor instead of an employee is one of the most confusing aspects of employment for many businesses. Below we have provided some tips to help you sort through the confusion regarding independent contractor vs. employee hiring.One of the most critical aspects of understanding contractor vs. employee hire is in understanding each are classified. If you should incorrectly classify someone as either one or the other, the IRS could hold you liable for employment taxes as well as a penalty. The basic rule of thumb to remember when trying to determine whether someone is a contractor or not is by asking yourself whether you have the right to control or direct result of the work or the means and methods of accomplishing the result. If you only have the right to control the results of the work, then the individual is a contractor. However, if you have the right to control the means and methods by which the work is accomplished, then the person is an employee. If you keep the rule regarding what you have the right to control and direct in mind, it will help you to remember the difference between employee and contractor hire. Knowing when and how to hire a contractor; however, requires understanding the various advantages and disadvantages of each classification. One of the biggest myths regarding contractor vs. employee hire is that you won’t be required to deal with reporting income on contractors. This is only partially true. You are still responsible for reporting wages that you pay to an independent contractor if you pay that person more than $600 per year. This information is reported on IRS Form 1099-MISC, Miscellaneous Income. When you make the decision to hire an independent contractor, it is always a good idea for both of you to sign an agreement putting forth the terms of your business relationship. This agreement should include the services which are to be performed, the timing regarding when the services are to be performed, specific information on the payment for the services, confidentiality, warranty and work for hire information. If you are not familiar with the terms work for hire or you aren’t sure about what kind of confidentiality information you should include in an independent contractor agreement, take a look at these tips. Generally It’s very important that you include a work for hire statement in your agreement. This stipulates that the work or product which is developed will be liable to copyright laws and as such will be owned by your company; not the contractor. Summary: Known when to hire an independent contractor and how to hire an independent contractor vs. an employee can be confusing. Understanding the differences between the two as well as the various advantages and disadvantages can help you to sort through the confusion. Article Tags: Independent Contractor Source: Free Articles from ArticlesFactory.com
ABOUT THE AUTHORMatt Bacak, The Powerful Promoter and Entrepreneur Magazine e-Biz radio show host, became a "#1 Best Selling Author" in just a few short hours. He has helped a number of clients target his specialty, opt-in email direct marketing systems. The Powerful Promoter is not only a sought-after internet marketer but has also marketed for some of the world's top experts whose reputations would shrivel if their followers ever found out someone else coached them on their online marketing strategies. For more information, visit Bacak's site athttp://www.powerfulpromoter.com or sign up for his Powerful Promoting Tips at http://www.promotingtips.com
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