For small businesses looking to build a team, independent contractors can be a relatively low-cost alternative to full-time employees and other workers. Since employers aren’t required to provide benefits to contractors or withhold taxes from their pay, businesses can save a good amount of money by choosing freelancers over full-timers.
But these benefits don’t come without caveats. Businesses that incorrectly classify workers as independent contractors open themselves up to potential IRS audits and fines, and there are specific rules concerning taxes that business owners must also adhere to.
Here’s a helpful infographic to help you stay compliant when hiring independent contractors.