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Contracts and IRS Forms

Contracts 

Contracts are important as they protect both you and the person or business that has hired you. A contract is helpful because it defines the type of work you will provide and sets expectations for the work to be delivered. It also provides documented evidence of the agreement that you will be working as an independent contractor and not as an employee (which has different tax implications). 

A contract allows both you and the hirer (your client) to think through key aspects of the working relationship, and makes clear additional provisions of the working relationship, such as keeping parts of the work confidential, making clear who owns the work product, how the contractor can talk about the project in their marketing, and many more arrangements.

INDEPENDENT CONTRACTOR IRS FORMS

Here are 3 IRS forms you should be familiar with as an independent contractor. 

 

  1. W-7: Individual Taxpayer ID Number (ITIN) Form

Use Form W-7 to apply for or renew an existing IRS individual taxpayer ID Number (ITIN). If you already have a social security number or if you qualify for one, you don’t have to apply for an ITIN. You can access the form on this page.

  • W-9: Request for Taxpayers Identification Number and Certification Form

Form W-9 does not require employment authorization verification and you can use an ITIN or a SSN to fill it out. Independent contractors submit a completed W-9 to the clients who have hired them. At the end of the year, your clients will file this information with the IRS, and include information about how much you were paid. Access the form from this link.

  • 1099: Miscellaneous Income and Form 1099. 

Form 1099 is a summary of how much each individual client paid you in the past year. You should receive a 1099 for every W-9 you submitted if the client paid you more than $600 in the past year. You will use your 1099s to prepare your own federal and state income taxes.

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