An independent contractor is a natural person, business, or corporation that provides goods or services to another entity under terms specified in a contract or within a verbal agreement. Unlike an employee, an independent contractor does not work regularly for an employer but works as and when required, during which time he or she may be subject to the Law of Agency. Independent contractors are usually paid on a freelance basis. Contractors often work through a limited company or franchise, which they themselves own, or may work through an umbrella company.
In the United States, any company or organization engaged in a trade or business that pays more than $600 to an independent contractor in one year is required to report this to the Internal Revenue Service (IRS) as well as to the contractor, using Form 1099-MISC. This form is merely a report of the money paid; independent contractors do not have income taxes withheld from their pay as regular employees do.
Famous quotes containing the word independent:
“Whether changes in the sibling relationship during adolescence create long-term rifts that spill over into adulthood depends upon the ability of brothers and sisters to constantly redefine their connection. Siblings either learn to accept one another as independent individuals with their own sets of values and behaviors or cling to the shadow of the brother and sister they once knew.”
—Jane Mersky Leder (20th century)