Computer Technician Compliance
Doing business as an independent computer technician means you must be informed and compliant with all tax, licensing, and certifications at the federal, state, and local level. The most important consideration at the federal level is the IRS. As an independent technician, you are responsible for your own taxes. You submit a W9 to the firm that contracts you so they have your information to report to the IRS. At the end of the year, the firm(s) that contract you for computer work will send a 1099 to you, and a copy to the IRS, that shows how much they paid you as an independent technician during the calendar year. You are responsible to pay your federal taxes on these earnings. To avoid penalties for underpayment of taxes as earnings are realized, you should make quarterly estimated tax payments to the IRS. Go to the IRS website to get more details.
Although the classification of "independent technician contractor" is mainly a concern of the firm contracting you, you should be familiar with the IRS "20 Questions" that dictate whether they consider you a contractor or an employee. The IRS may use the answers to these questions to determin whether the contracting firm owes taxes on your income and whether you qualify for unemployment. The 20 Questions are listed in the section below here.
In addition to being compliant as a computer technician at the federal level, you must comply with the licensing, certifications, and insurance requirements at the state and local levels. We will try to keep these requirements updated on the state page links.
IRS "20 Questions" Governing Computer Technician Contractor Classification
1) Does the principal provide instructions to the worker about when, where, and how he or she is to perform the work?
2) Does the principal provide training to the worker?
3) Are the services provided by the worker integrated into the principal's business operations?
4) Must the services be rendered personally by the worker?
5) Does the principal hire, supervise and pay assistants to the worker?
6) Is there a continuing relationship between the principal and the worker?
7) Does the principal set the work hours and schedule?
8) Does the worker devote substantially full time to the business of the principal?
9) Is the work performed on the principal's premises?
10) Is the worker required to perform the services in an order or sequence set by the principal?
11) Is the worker required to submit oral or written reports to the principal?
12) Is the worker paid by the hour, week, or month?
13) Does the principal have the right to discharge the worker at will?
14) Can the worker terminate his or her relationship with the principal any time he or she wishes without incurring liability to
15) Does the principal pay the business or traveling expenses of the worker?
16) Does the worker furnish significant tools, materials and equipment?
17) Does the worker have a significant investment in facilities?
18) Can the worker realize a profit or loss as a result of his or her services?
19) Does the worker provide services for more than one firm at a time?
20) Does the worker make his or her services available to the general public?