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I have a small company and we are constantly looking for contractors (we plan to have employees in the future, but for now we want to stick to contractors). I noticed if I say that interns are welcome to apply to our jobs, we get more candidates. Even though some of them are students they end up being very knowledgeable and bright, plus you don't have to pay them the same rate as aa industry vet with 15+ years of experience.

Is there anything I need to do specifically if I have an "intern" position in my company? Can I just bring the student in and treat him as a regular contractor?

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"Contractor" by itself denotes a professional with considerably higher than entry level experience. So if you advertise for "contractors" you will get resumes from experienced people who demand "real money" for a rate ($45/hr and up in most regions of the US.)

The only problem with hiring interns as contractors is that they will probably not be aware of their obligation to take care of all of their own taxes, including self employment tax and withholdings.

Just be utterly transparent about exactly what you're offering - internship with contractor status. And if you're hiring the very young as 1099 contractors, some may disagree but I insist that you are morally obliged to inform them that they need to manage their own taxes because you will not be taking anything out but they still owe the taxes. Someone who has been in the workforce for several years should know this - a student will probably not.

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Thank you for your answer. I agree that I should let them know that they are in charge of paying their own taxes. I too was a contractor at a young age, didn't know anything about self-employment taxes and after working as a contractor for a year full-time I got hit with a big tax bill at the end of the year. How much should I go into telling the person that they should managetheir own taxes? I was thinking of just telling them to make sure they know about "self employment" tax and to talk to an accountant. – Edgar Miranda Oct 2 '11 at 17:51
I would also stress that tracking and remitting all taxes is completely their legal responsibility. That should be enough. – user2757 Oct 2 '11 at 22:12

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