What is an Independent Contractor? This is a self-employed individual who provides services for another person or organization under a contract, but is NOT classified as an employee. The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.
If you are an independent contractor, then you are self-employed. The earnings of a person who is working as an independent contractor are subject to self-employment tax.
When doing services for CTK the contractor will be issued a 1099 at the end of the calendar year. You are not an independent contractor if you perform services that can be controlled by an employer (what will be done and how it will be done). This applies even if you are given freedom of action. What matters is that the employer has the legal right to control the details of how the services are performed.
If an employer-employee relationship exists (regardless of what the relationship is called), then you are not an independent contractor and your earnings are generally not subject to self-employment tax. However, your earnings as an employee may be subject to FICA (social security tax and Medicare) and income tax withholding.
What will you need to fill out this form?
- Approval for a contractor
- Contractor's information
- Name, Address, Email, phone number
- An employee contact for the Contractor
- Employee Contact information:
- A specific description of the services that will be provided
- Date the services will be performed on
- Payment amount and Terms
- Completion date - clear end date
- Discussion about expenses
- Liability Insurance Amount
- Termiantion clause/date discussed