your NORMAL house, driving your NORMAL car.

But, if you give into word NO, and resume that NORMAL

life, I promise you that this will happen.

You will wake up in middle of some night, and lay there

thinking about what could have been. You will wonder where

you would be right now if you had continued pursuing your

goals and dreams. You will think about that wish list of things

you were going to have or do once you "made it."

You will think about people you met that DID encourage

you. The ones that told you to never quit and to keep

following your dreams. You will wonder where they are and

what they are doing now, how big their house is and what

type of vacation they are planning.

You will lay awake for a long time.

Start right now to change meaning that you associate with

the word NO. Learn not to take it personally. It’s

not about you.

Look at yourself in mirror and say word "NO" to

yourself as many times as you need to until you start to feel

a little humored by it. Did you say it one time? Ten times?

One hundred times? Five hundred times?

Are you still standing?

Ask yourself, "What’s worst that can happen if someone

tells me NO?"

Now ask yourself, "What’s best that can happen if

someone tells me YES?"

Focus on that scenario, and forget about "NO’s."

Go out in search of those "YESes" everyday and before

you know it, you’ll be waving good bye to that NORMAL

job, that NORMAL house, that NORMAL car.

You’ll have to decide for yourself about those NORMAL friends!

PROTECTING YOURSELF

OK, so you know difference between an independent contractor and an employee, you know advantages and disadvantages of hiring independent contractors and you know dangers of misclassification. How do you protect yourself?

=> Independent Contractor Agreement

First and foremost, arm yourself with IRS' control test factors and tests used by various government agencies in your state. Once you have that information, you can structure your arrangements with your independent contractors accordingly. These arrangements should be reduced to writing, in form of an independent contractor agreement.

An independent contractor agreement should contain a description of services independent contractor is to perform, by when they are to be performed and amount independent contractor is to receive in return for satisfactory service.

This agreement can be very helpful evidence in proving that worker's status was independent contractor rather than employee. Although such an agreement is insufficient by itself (if you nonetheless treat independent contractor as an employee agreement will be worthless for this purpose), if factors weighed by IRS under control test are evenly balanced, an independent contractor agreement may well tip scales in your favor.

=> Screening

Before hiring an independent contractor, put him or her through a few hoops first. It's a good idea to prepare some form of questionnaire to extract sort of information you would need to be able to prove in support of your argument that worker is, in fact, an independent contractor and not an employee. Examples of such information (courtesy of NOLO website - http://www.nolo.com) include:

1. Whether worker has formed a legal entity for his or her business. 2. Whether worker has filed a fictitious business name (also known as a "DBA" or "doing business as"). 3. The worker's business address and telephone numbers. 4. The number of employees employed by business. 5. Whether worker has any professional or business licenses. 6. References from other business for whom worker has performed services as an independent contractor. 7. How worker markets his or her business. 8. Whether worker maintains an office separate from his or her home. 9. A description of equipment and facilities worker owns and will use in project. 10. Whether worker has business cards and stationery etc.. 11. A listing of types of insurance coverage worker has for his or her business.

Request documents that evidence responses to above questions. For example, get copies of fictitious business name statements, professional and business licenses; references; business cards and stationery and insurance policies.

At end of day, whether you hire an employee or an independent contractor is a decision for you and your business. If you feel you can adequately protect yourself against an allegation of misclassification then, by all means, follow independent contractor route if that makes most sense to you. But if you don't feel confident in managing relationship to protect yourself from such a charge, for your own peace of mind, you may be well advised to hire an employee even if that is more expensive up-front. After all, if you get it wrong, you'll be paying those additional costs anyway in form of back-taxes (and interest and penalties to boot).