The freelance landscape has undergone a substantial surge in popularity over the past decade. The prevalence of talent in the “gig economy” has empowered companies to tap into a pool of dedicated professionals, offering flexibility in managing their hiring budgets and more. Businesses of various sizes regularly enlist the services of freelancers. Their needs vary, ranging from project completion within tight deadlines to outsourcing essential yet short-term tasks like logo design, copywriting, or financial analysis. The primary motivation for companies lies not only in cost-cutting but also in reaping additional advantages, one of which being a tax break given that employers are exempt from paying Medicare and Social Security contributions for freelancers. While freelancers handle their own self-employment taxes, employers must furnish them with the necessary tax forms. Outsourcing tax form reporting can simplify these complex matters for organizations. The decision of whom to hire hinges on the business’s short- and long-term goals, as well as the workplace landscape. As more individuals seek enhanced benefits or remote and hybrid work arrangements, the pros and cons of hiring freelancers versus full-time employees may undergo continuous changes. For a more comprehensive exploration of benefits and drawbacks, refer to the accompanying resource.
Hiring A Freelancer vs. Full-Time Employee this infographic was contributed by Tab Service Company, your first stop for 1099 state filing