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Business Terms
Independent Contractor
Definition
A self-employed person or business hired to perform specific work for another company.
Overview
Contractors work independently, not as employees. They control how work is done, use their own tools, and can work for multiple clients. They receive 1099s, not W-2s.
Example
A company hires an independent contractor to build their website for $10,000, with the contractor controlling their schedule and methods.
Best Practices
Use clear contracts, understand classification rules, and maintain independence from clients.
Common Mistakes to Avoid
Misclassification as employee
Lack of contracts
Too much client control
Frequently Asked Questions
How is a contractor different from an employee?
Contractors control how work is done, work for multiple clients, and handle their own taxes.