Hiring Independent Contractors FAQ

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Should I ask freelancers and consultants to sign written independent contractor agreements?

Absolutely. Using a written agreement avoids later disputes by providing a written description of the services the IC will perform, when they are to be performed, and how much the IC will be paid.

A written IC agreement can also help establish that a worker is an independent contractor. Although an agreement won't conclusively prove that a worker is an IC, it will help show the IRS and other agencies that you and the worker intended to create a hiring company-independent contractor relationship, not an employer-employee relationship. IRS training materials state that where all the other factors are evenly balanced, a written IC agreement may tip the scale to the IC side.

But remember, an IC agreement is only useful if you follow it. If you treat a worker like an employee, no contract will undo the damage -- or protect you from government audits.

For help creating a contractor agreement, see Put Your Independent Contractor Agreements in Writing.

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