Taxes and Independent Contractors
Independent contractors are not employees; they work for themselves, performing services for you while not under your direct control and are responsible for paying their own income taxes. In the United States, ask for a Social Security number or EIN before the contractor starts work and have the contractor sign a Form W-9 too. In Canada, you need the contractor's Social Insurance Number or Business Number.
In the United States, if you pay one independent contractor $600 or more during a tax year, you need to file Form 1099-MISC with the IRS (with a copy to the contractor), identifying the type of payment, amount, who made the payment, who received it, and the recipient's taxpayer identification number (EIN or SSN).
In Canada, you may have to report amounts of $500 or more paid to a self-employed contractor. Check with the CRA to determine if this situation applies to you.