Have you noticed the upsurge in the amount of companies outsourcing work to independent contractors? We're not speaking about a gradual upsurge, either. The growth is robust and shows no sign of slowing down. The rise in independent contractors is a trend that really got traction with the so-called "Jobless" economic recovery of recent years. The late 1980's and 1990's were an occasion when "downsizing" swept the economy and many good people found themselves underemployed through no fault of the own. Their company simply chose to "go in another direction" or "trim the fat" as well as get "lean and mean." It's no real surprise that several folks-quite some of them, no doubt, still upset about being called "the fat"-reinvented themselves and popped up many years later as independent contractors.
The concept is pretty simple. Like temp workers, you hire an independent contractor to perform a given project for a given quantity of money. That is it. No overhead, no benefits to concern yourself with, no taxes to withhold. Nothing but straight buy straight work and then, once you don't need them anymore, each goes away without all of the potential legal fuss. Try that with an employee! From the contractor's viewpoint, they are able to set their very own hours, have an actual say in just how much they receives a commission, choose their assignments and complete them by any means they believe best. In reality, as long as the assignment is completed punctually and on budget, the employer has little or no say in how the task gets done at all. Along with that, the independent contractor can juggle multiple assignments at exactly the same time. They have no obligation to stay "faithful" to the employer and so can take other jobs that'll, because of higher pay or other considerations, take precedence over your project.
They're not issues whenever you hire straight employees. You are in control of employee salaries and you are able to rely on a certain amount of loyalty. Loyalty can have an optimistic influence on productivity, as can a sense of belonging that comes with a regular job. What's more, having steady, regular employees will improve overall workflow since everyone understands their job (or jobs) and how they can fit to the big picture. The trade-off here's you will have extra overhead, you will have to make payroll weekly and you will go from spending most of your time practicing your trade to splitting your time between management duties and the task you love. You will also have a greater exposure to lawsuits-especially worker-related suits-and you may need to move to larger offices to accommodate your new workforce.
Damp Survey
The greatest pitfall in the whole issue comes not from the independent contractor you decided to hire for "Project Wildebeest." No, the biggest issue arises from not understanding the legal definitions of employee and independent contractor while they relate solely to taxes.
According to the lefore you can determine how to deal with payments you make for services, you should first know the business relationship that exists between you and anyone performing the services. The tax code recognizes four different kinds of such persons:
The concept is pretty simple. Like temp workers, you hire an independent contractor to perform a given project for a given quantity of money. That is it. No overhead, no benefits to concern yourself with, no taxes to withhold. Nothing but straight buy straight work and then, once you don't need them anymore, each goes away without all of the potential legal fuss. Try that with an employee! From the contractor's viewpoint, they are able to set their very own hours, have an actual say in just how much they receives a commission, choose their assignments and complete them by any means they believe best. In reality, as long as the assignment is completed punctually and on budget, the employer has little or no say in how the task gets done at all. Along with that, the independent contractor can juggle multiple assignments at exactly the same time. They have no obligation to stay "faithful" to the employer and so can take other jobs that'll, because of higher pay or other considerations, take precedence over your project.
They're not issues whenever you hire straight employees. You are in control of employee salaries and you are able to rely on a certain amount of loyalty. Loyalty can have an optimistic influence on productivity, as can a sense of belonging that comes with a regular job. What's more, having steady, regular employees will improve overall workflow since everyone understands their job (or jobs) and how they can fit to the big picture. The trade-off here's you will have extra overhead, you will have to make payroll weekly and you will go from spending most of your time practicing your trade to splitting your time between management duties and the task you love. You will also have a greater exposure to lawsuits-especially worker-related suits-and you may need to move to larger offices to accommodate your new workforce.
Damp Survey
The greatest pitfall in the whole issue comes not from the independent contractor you decided to hire for "Project Wildebeest." No, the biggest issue arises from not understanding the legal definitions of employee and independent contractor while they relate solely to taxes.
According to the lefore you can determine how to deal with payments you make for services, you should first know the business relationship that exists between you and anyone performing the services. The tax code recognizes four different kinds of such persons:
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