Independent contractors are self-employed individuals who typically provide services to a third party. Their work usually takes place at a site that is not owned or operated by their own business.
Additional Details about Independent Contractors
These contractors may operate solo or be affiliated with companies offering contract-based services like plumbing, catering, window cleaning, or electrical maintenance. They often charge either a one-time fee or a recurring rate and are responsible for managing their own expenses related to each job.
Unlike traditional employees (often referred to as W-2 employees), independent contractors handle their own tax filings and payments. Rather than receiving a Form W-2, employers provide independent contractors with a Form 1099-NEC (Nonemployee Compensation) to report their income to the IRS.
You might unknowingly engage with independent contractors in everyday situations; professionals such as dentists, veterinarians, and auto repair technicians can function as independent contractors.