Independent Contractors are classified according to their tax status as either 1099, incorporated or W-2 contract employees.
Sole proprietorships (1099) file a schedule C with their income tax return and receive a 1099 form for all monies paid in excess of $600 by clients. The business expenses of a sole proprietorship are itemized on Schedule C, and filed with the personal annual income tax return. A sole proprietor can have a retirement account in the form of KEOGH or SEP-IRA.
An incorporated contractor files a personal income tax return and the corporation files a corporate income tax return. The contractor is a W-2 employee of the corporation. The business expenses are itemized on the corporate tax return. Corporations can create one of the following retirement accounts: 401(k) Plans or Pension Plans.
Contractor Employee (W2) Benefits
To provide better service to our employees and contractors, we will deposit your check electronically into your checking or savings account at your bank. All direct deposits will occur every other Friday and funds will be deposited into your bank account on Friday.