Sampleĭownload: Adobe PDF, MS Word, OpenDocument If payment to the independent contractor is more than $600 over the course of a calendar year, the client will be required to file IRS Form 1099 with the Internal Revenue Service (IRS) when they pay their taxes on April 15. In addition, the form should be initialized on the bottom of every page to mark that each item of the contract has been agreed upon by all of the parties.Īt this time, the contract is finalized and legally binding to both parties. The agreement should be signed by all the parties in the presence of a witness or notary public (or both). After the parties have filled in the document and completed it is now ready to be signed. Use the template and write yourself or seek legal counsel. Step 4 – Completing the Formĭownload: Adobe PDF, Microsoft Word (.docx), or Open Document Text (.odt) This should include:Īfter a verbal agreement has been reached, the parties can decide to authorize a work order or move straight to a binding written independent contractor agreement. Once the contractor has been vetted and qualified, it’s not time to discuss the terms of service. If agreed by the contractor, the past employers should be contacted in an effort to get to know their integrity and work ethic.

For past employment, use LinkedIn as a means of viewing past employers. It’s best to conduct a criminal background check and check with past references to verify the character of the person.

Websites like Yelp, RipOffReport, Facebook, BBB.org, and TrustPilot are great resources for viewing customer testimonials. To ensure the entity is valid to do business in the state where the services are being performed a check on the Secretary of State ( search by state). The best way is to simply conduct a search on Google and try to view any negative results. Step 2 – Verify the Contractorīefore hiring the services of a third party, it’s best to verify the credentials of the individual or business by looking up all reviews, and past work, along with conducting necessary background checks.įor entities, it’s a bit harder to perform a background check. This form is required to be stored by the client for a period of four years although is not required to be filed with the IRS. This will identify themselves and require them to give their Employer Identification Number (EIN) or Social Security Number (SSN) before performing any work. IRS Form W-9 should be given to the independent contractor and completed before signing any agreement. Step 1 – Independent Contractor Completes IRS Form W-9 Once a contractor is found, it is time to write an agreement. Once an individual or company has decided that services are needed, they will need to determine which independent contractor works best for them. Independent contractors must use IRS Form 1099 – MISC and file at the end of the year to file their taxes with the Internal Revenue Service (IRS). Specifically, the following professions are independent contractors by right under IRS Rules: If the individual is paid a salary, must adhere to a specific schedule, and is dictated what to do in every facet of their workday, they will most likely be considered an employee. Generally speaking, if an individual is paid on a per-project or task manner, they will most likely be considered an independent contractor. Ultimately, an independent contractor is an individual who has their own boss and sets their own rules to justify how they work and their output. Uses their own tools and equipment when performing services and.Salespersons paid solely on commission (except insurance salespersons).Able to work their own schedule and hours.Able to control how their services are completed.Contractor Agreements: By Profession (27)Īn independent contractor is classified by the IRS, under 26 CFR 31.3121(d)-1, as someone who conducts the following activities:.Contractor Agreements: Basic Versions (2).Basic Versions (2)ĭownload: Adobe PDF, MS Word (.docx), OpenDocument Contractors are responsible for paying their own withholding tax to local, state, and federal authorities (per IRS Rules).

Contractor expenses form