Independent contractors need to be handled in a different way than employees, and there are several things that you need to consider when you are working with contractors:

Sign a Contract: A contract keeps everyone in agreement about the payment and the services that will be provided. Make sure to have that contract in place before work commences. 

Keep Documentation: In order to include the contractor costs on your tax write-offs, you need to be keeping documentation about the services that you receive. Have the contractor send an invoice on a monthly basis and keep those records on file in case you need them later. 

Tax Forms: Certain tax forms are required with independent contractors. For example, you need to have them fill out a W-9 form in the beginning so that you can verify that they can legally work in the United States. Additionally, your bookkeeper can help you send out the 1099 tax forms at the end of the year. 

Here’s a look at a W-9. You can download one here.

Accounting System: A high quality bookkeeping service will make it easy for you to stay up-to-date with the requirements that you need to comply with for independent contractors. Our company is dedicated to providing you with bookkeeping and human resource services that are catered to your individual needs. Contact us today for more information.

Other related articles: Is Your Business Ready for 1099 filings