Keep in mind that there are definite and fairly stringent IRS rules as to the conditions under which a person may be considered a contractor rather than an employee.  Check with a good accountant or your local IRS office to make sure you're not violating the tax laws (unfortunately,
abuse in this area is widespread because FICA,  fringe benefits, and income tax withholding can be avoided by the employer).  If I recall correctly, one of the conditions is that you cannot set the work hours (after all, you are contracting for a project and it's none of your
business how that project is accomplished).

Lack of withholding is another disadvantage to the "contractor"--student-level workers tend to forget they should put away some of the income for income taxes (as well as the FICA).

On the advantage side, reasonable expenses to carry out a contracted project are deductable as business expenses.

That said, once again, the bottom line is that there are rules governing when a person can be considered a contractor, there are penalties if those rules are broken, and you should get professional advice rather than listening to people like me.

"Susan A. Dorko" wrote:

> Hi everyone--
>
> This summer my museum is going to have two interns to work on our collection
> cataloging.  They are going to receive a small stipend/honorarium.  I was
> wondering how other small museums handle this for tax purposes -- do you put
> them on the payroll and have them do a W-4, or do you treat them as an
> independent contractor and have them do a 1099?  When I worked as an intern,
> I encountered instances where I did a W-4 and had taxes and FICA deducted
> from my pay -- but there were also times where I was considered a independent
> contractor and I received the full stipend.
>
> Any input/advice would be appreciated.  You can respond to me on- or off-list.
>
> Suzi Dorko

Cheers,

Art Harris

--
Laboratory for Environmental Biology, Centennial Museum
University of Texas at El Paso, El Paso, TX  79968-0915
phone (915)747-6985; fax (915)747-5808; [log in to unmask]
http://www.utep.edu/leb    http://nasa.utep.edu/chih/chihdes.htm
http://www.utep.edu/museum

=========================================================
Important Subscriber Information:

The Museum-L FAQ file is located at http://www.finalchapter.com/museum-l-faq/ . You may obtain detailed information about the listserv commands by sending a one line e-mail message to [log in to unmask] . The body of the message should read "help" (without the quotes).

If you decide to leave Museum-L, please send a one line e-mail message to [log in to unmask] . The body of the message should read "Signoff Museum-L" (without the quotes).