Use of independent contractors is a growing trend with U.S. businesses.  The temporary worker or independent contractor gives greater flexibility for seasonal businesses and is cost effective for projects and many essential tasks. As attractive as independent contractors are, there are considerations for both the client and the contractor.  As an independent contractor you need to understand the concerns and considerations of your potential client.

There are 11 IRS guidelines, falling into three categories, which need to be considered to mitigate IRS exposure: 

• Type of Relationship – Both parties should define the relationship in writing covering specific project, period of time, and work results desired.  The contract should state that no employment relationship is being established, no benefits are provided, and the contractor will finance their own costs and benefits from their own business.
• Behavioral Controls – the independent contractor will determine when and where to do the work, provide the necessary tools needed, and will require no training.  The client will not control the work performed but will control the desired results.
• Financial Controls – the independent contractor will have fixed ongoing expenses that will not be reimbursed and will have the opportunity to make a profit or loss.  The contractor must make their services available to the relevant market and will attempt to work for multiple clients.

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