![]() One major difference is that businesses don’t pay or withhold payroll taxes for independent contractors, who are also called 1099 contractors. employees for more on the difference between the two classifications. Check out our guide on independent contractors vs. You might have heard about how the California legislators have impugned the way Uber and Lyft classify their drivers. government has been cracking down on independent contractor classification in cases where workers could be treated more like employees. Whereas employers can have significant control over their employees’ work processes, a business cannot dictate how and what its independent contractors do to achieve the business’s desired result. People and companies engage independent contractors for a specific work purpose, relying on their expertise to complete the work. Independent contractors are one-person businesses that provide goods and services to clients for a fee. Overview: What is an independent contractor? Here’s how you pay taxes as an independent contractor. I’ll say that at least two more times in this article because it’s just that important. Unlike employees, independent contractors remit tax payments on their own. You might even be an independent contractor. From your cab driver to your food delivery person, you interface with independent contractors every day. Independent contractors play a significant role in the U.S. Follow these five steps to file your independent contractor taxes. Independent contractors are one-person businesses and remit taxes on their own.
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