Declaration of Independents
You may decide your business can't afford to hire too many full-time employees, and you'd like to use the services of an independent contractor. With an independent contractor, you don't have to deduct and withhold the person's income, Social Security and Medicare taxes.
While independent contractors mean lower payroll costs, be advised that the IRS scrutinize this whole area very carefully. The IRS wants to make sure your workers are properly classified and paying the government the necessary income and payroll taxes that are due.