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What federal tax forms do independent contractors need to fill out?

What federal tax forms do independent contractors need to fill out?

It would seem that since you’re doing work for a business that you’re an employee. But this isn’t necessarily so. If you’re not actually hired by the company, you’re considered a contractor. You file a different set of taxes than a regular employee. So, you file a different set of 2010 IRS tax forms than they do as well.

Which Form?

The correct set of 2010 IRS tax forms for contractors is the W-9. This form is for everyone considered a non-employee by a company.

Who does this include? Contractors, for one. They usually enjoy long term work with a business. This includes but is not limited to labor work.

Other groups who use the W-9 tax forms are freelancers and consultants. Both of these positions are generally short-term. The length of the job doesn’t matter. As long as work was performed and the person wasn’t hired by the company directly they must fill out W-9 tax forms for each company for which they work.

After the 2010 IRS tax forms are filled out, one copy is retained by the employer. The other is kept by the company they performed work for. Both worker and business use the W-9 for filling out their taxes. These are considered informational forms, meaning you do not turn these 2010 IRS tax forms into the IRS.

Why the W-9?

Independent contractors like consultants and freelancers fill out the W-9 tax forms instead of the W-4 because they are taxed differently. Instead of taxing wages earned, a contractor is taxed on income minus business expenses.

Also, these 2010 IRS tax forms can help the business avoid backup withholding. This means that, if you are a contractor and not an employee, you can use this form to certify that you’re not eligible for backup withholding by the company you work for. This means you can claim the full amount you are owed from any company you work for and, from there, handle your own taxes.

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