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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. To find out what your tax obligations are, visit the Self-Employed Individuals Tax Center.
Step 3: Last Employer Self-employed individuals may enter "self-employed" for the last employer's name and include his/her own address and contact information in lieu of the "last employer's address and contact information."
Can I employ self-employed staff? Having multiple income streams is not uncommon nowadays and that means you can be both employed and self-employed. If you are looking to hire someone who is self-employed as an employee, there are no rules that say that person is ineligible.
So, can independent contractors hire employees? Yes! As a self-employed person, you are your own businessand businesses are allowed to hire employees. However, you'll need to take steps to protect and prepare yourself and your business just like if you were a sole proprietor.
Self-employed people earn a living by working for themselves, not as employees of someone else or as owners (shareholders) of a corporation.
What Is Self-Employment? A self-employed person does not work for a specific employer who pays them a consistent salary or wage. Self-employed individuals, or independent contractors, earn income by contracting with a trade or business directly.
The law does not require you to complete a contract with your self-employed or freelance workers - a verbal contract can exist even when there is nothing in writing.
Unemployment compensation under the PUA program provides for up to 39 weeks of benefits for individuals who are self-employed (including independent contractors).
As a freelancer, you also have to manage invoicing and following up on payments. When you work as an independent contractor, you work on an hourly or project-based rate that may vary from client to client or job to job. If you work independently, you have control over setting and negotiating your rates.
Simply put, being an independent contractor is one way to be self-employed. Being self-employed means that you earn money but don't work as an employee for someone else.