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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 most common business organizations for Independent Contractors include C-corporation, S-Corporation, Partnership, Limited Partnership (LP), Limited Liability Partnership (LLP), Limited Liability Company (LLC), and Sole Proprietorship.
Doing Work as an Independent Contractor: How to Protect Yourself and Price Your ServicesProtect your social security number.Have a clearly defined scope of work and contract in place with clients.Get general/professional liability insurance.Consider incorporating or creating a limited liability company (LLC).More items...?
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.
The three types of self-employed individuals include:Independent contractors. Independent contractors are individuals hired to perform specific jobs for clients, meaning that they are only paid for their jobs.Sole proprietors.Partnerships.
All work required of the contract is performed by the independent contractor and employees. Independent contractors are not typically considered employees of the principal. A "general contractor" is an entity with whom the principal/owner directly contracts to perform certain jobs.
The independent contractor can be anyone: An architect who is preparing architectural plans for a new restaurant or building for your company. A software engineer hired to create software for your company or to do programming for maintenance of your company's existing software.
If Architect is retained for construction administration, Architect will review lien waivers of contractor, subcontractors and suppliers with each pay application. Architect's contract is entered into based upon a standard of mutual trust, good faith and fair dealing.
Independent contractors are self-employed workers who provide services for an organisation under a contract for services. Independent contractors are not employees and are typically highly skilled, providing their clients with specialist skills or additional capacity on an as needed basis.
Becoming an independent contractor is one of the many ways to be classified as self-employed. By definition, an independent contractor provides work or services on a contractual basis, whereas, self-employment is simply the act of earning money without operating within an employee-employer relationship.