Though the economy is slowly recovering, many businesses were forced to cut costs when the 2008 financial crisis hit. For business that needed additional help but couldn’t afford to hire full-time employees, augmenting their workforces with freelancers and contractors became a popular option. Even as businesses are now able to hire full-time employees, many have found the advantages of hiring freelancers too enticing to give up.
One of the most common reasons companies hire “gig-ers,” as The Atlantic calls contractors of the younger generations, is their ability to deliver quality work without requiring health insurance, a retirement fund or other benefits. An added benefit for businesses that were forced to downsize when the Great Recession hit is that freelancers can work remotely, allowing businesses to save on equipment costs as well as office space, while keeping the same or similar number of employees.
Making changes to account for independent contractors
“Today, freelancers are the fastest growing sector of the economy,” wrote Richard Greenwald in a piece for The Atlantic. “And, one day very soon consultants and other micropreneurs who file a 1099 might overtake as a percentage of employed American those who file W-2s.”
The 1099 tax form given to independent contractors records their income from a particular business. However, with over 20 versions of 1099 forms, including those for interest earned or retirement payment distribution, the forms can quickly add up, which is why many businesses now need 1099 processing services.
For businesses, especially those with so many employees working remotely, the proper management of 1099 forms is essential. Through web-based systems, 1099 processing services ease the administrative burden of 1099 forms management by facilitating the electronic filing of these documents, all while maintaining full compliance with IRS requirements.