Set the Norm With the Right Contract Labor Form

A Contract Labor Form for Your Project Explained

Preparing legal documents can be intimidating, especially when you do not have enough funds to hire a lawyer to do that for you. New projects and activities may require creating new contracts

What contract labor forms are necessary for your upcoming project? DoNotPay provides the answer and can help you draw up suitable agreements and documents to secure your business operations. 

Who Is an Independent Contractor?

An independent contractor is a person or company that performs labor or provides goods based on a verbal or written independent contractor agreement. These workers do not have the same status as full- or part-time employees. 

Unlike a regular employee, a contractor is a person or business that:

  • Needs to submit invoices for:
    • Billable hours
    • Implemented projects
  • Can:
    • Use their equipment
    • Be dismissed at any time
    • Claim more deductions for the expenses related to work (e.g., maintaining a home office)
  • Is not entitled to:
    • Paid benefits
    • Workers’ compensation
  • Controls the number of hours they work
  • Requires a contract before starting the project

The main difference between employees and independent contractors is that the latter group of workers has a higher level of control over their work. 

Hiring Independent Contractors Requires Contract Labor Forms

If you are a business that would like to hire an independent contractor or freelancer to perform some work, you will need the following forms:

Contract Labor Form

Additional Information

Form-SS8If businesses that hire workers—especially when they require the same tasks from workers—are not sure how to classify these employees, they should:

  • Consult a lawyer
  • File Form SS-8 with the Internal Revenue Service (IRS)

When opting for the latter option, the IRS will:

  • Review the provided proof
  • Determine the worker’s status 

If a worker is classified as an independent contractor, the forms listed below are necessary

Form W-9

All contractors need to fill out Form W-9 to provide their:

A TIN can be either:

  • A Social Security Number (SSN) or 
  • An Employer Identification Number (EIN)

A contractee needs to keep Form W-9 on file for at least four years after hiring the contractor

Independent contractor agreementThis contract should outline the:

  • Project
  • Project fee(s)
  • Expected results
  • Dates for deliverables

Each new project should have a different agreement with the specifics of the ongoing project

InvoicesA contractor needs to provide invoices:

  • For all payments 
  • Corresponding to Form 1099-MISC
Form 1099-MISCAll U.S. businesses that give over $600 to an independent contractor for services provided throughout the year need to:

  • Report all transactions to the IRS
  • Complete and file Form 1099-MISC

Contract Labor Form W-9

When you work as a freelancer or independent contractor, you will need to fill out Form W-9 because a person or company that is paying you needs your TIN to report the amount to the IRS. 

If you are asked to fill out Form W-9, you can expect to get Form 1099-MISC from the contractee, i.e., the individual or business paying you. 

Contract Labor Form 1099-MISC

As an independent contractor, you will need Form 1099-MISC to fill out a tax return at the end of the year. You should not miss any amounts reported on Form 1099-MISC since:

  1. They are taxable
  2. You will face penalties if you fail to:
    • Report your income 
    • Pay tax on it

Unlike for independent contractors, where a contractee needs to file Form 1099-MISC, employers must fill out and file Form W-2 for their full- or part-time employees. While these two forms might seem similar, Form 1099-MISC is simpler as it only reports the contractor’s gross payments.

Secure the Project With an Independent Contractor Agreement

Regardless of whether you are an employer that is considering hiring an independent contractor or a freelancer entering into a project with a legal entity, you need to have an independent contractor agreement. 

To prepare one, you could:

  1. Use online contract templates that are too general and might not be suitable for your project or expertise
  2. Consult an attorney, which might be a good option but also quite an expensive one
  3. to use our efficient yet affordable Standardized Legal Documents product to generate a contract tailored to your upcoming project

DoNotPay Will Help You Create Solid Documents and Agreements

DoNotPay is a reliable solution for your personal and professional contract needs. 

Our app is the best option if you would like to save your:

  • Energy trying to deal with daunting legal aspects 
  • Time browsing through online templates 
  • Money hiring a lawyer

Turn to DoNotPay to get personalized contracts, including NDA, lease, operating, and non-compete agreements or bills of sale

To create lots of various documents and agreements, and follow these simple steps:

  1. Select the Standardized Legal Documents feature
  2. Enter the name of the document (for instance, an independent contractor, prenuptial, or custody agreement)
  3. Give the necessary details to the chatbot (like names, addresses, and other relevant information)

DoNotPay will then generate a document customized for your specific requirements and projects. 

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