1099 contractors, is ther a form I should get them to fill out?
I was told that there is a form that I can or need them to fill out stating that the understand that they will be receiving a 1099 from me and that they will be responsible for paying there own taxes, social security and Medicare. This form also gives me there personal information for my records, such as full name, address, social security number or tax ID number (EIN, TIN, ect.).
If you know what form I am talking about and have the link to the PDF of it please link me to it.
One last thing, is there another form I should have them sign stating that they are a subcontractor on the job and will be responsible for there own workers compensation insurance. If so please gone me the ne or form number of it and link to it.
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The form for getting their information is form W-9. If you don’t get it, you must withhold 28-30% of whatever you are paying them for taxes and forward it to the IRS. (28% if you think they are a citizen and 30% of you conclude they aren’t.)
As for “their responsibility” that’s known as a contract that they sign. The contract must spell out their rights and responsiblities and ACCURATELY reflect a contractor relationship.
http://www.irs.gov/pub/irs-pdf/fw9.pdf
http://www.irs.gov/businesses/small/article/0,,id=99921,00.html
An independent contractor must fill out a W-9 form to give you their ss# that you’ll need for the 1099. See http://www.irs.gov/pub/irs-pdf/fw9.pdf?portlet=3
But your question sounds like you think that you and they can just agree that they’ll get a 1099 and be responsible for their own taxes. Not true, and this can get you into significant trouble down the road. There are specific rules as to whether someone is a contractor or an employee. If you treat someone as a contractor who is legally an employee, you’re looking for trouble and fines. And they can’t waive their rights and just agree to a 1099 – you can get them to sign anything you want to, and it will be worthless.
yes you should have them complete a W-9 which you can find at http://www.irs.gov
and you will issue them a 1099 at the end of the year, which you will have to order
and yes, you really should have some kind of contract spelling out what is expected of them, their obligations, responsibilities, etc and likewise what can be expected of you
you know of course, they cover themselves with their own insurance, they are not covered by any workmen’s comp you have, they are also not eligible for unemployment since they are self employed, etc.
There is a specific definition of “independant contractor” under
IRS rules… from the info you provide here… your “employees” are
NOT “contractors”. You cannot tell them what time to come to work,
how long it takes to perform a specific job function, you cannot
provide tools to perform the job… Just because you would like to
declare your “employees” independant contractors for your financial
reasons or convenience is not enough to say so for fact. Contsult
your attorney about this…you are leaving yourself open for
potentially significant penalties here. Independant contractors are
legally self insured. YOU cannot direct what/when/where/how they
perform their jobs. Think about it.