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Businesses with covered independent contractors. Independent business?A Guide to Hiring Independent. As an independent contractor, you have the right to ask a state or federal agency to review your employment status. To record and report income, independent contractors get 1099MISC tax forms, and employees get W2 tax forms. What is a 1099 contractor? 1) Instructions - An employee is required to follow instructions about when, where and how to do the work. They generally set their own hours. Independent contractors and freelancers must comply with several laws. A 1099 Form reports payments to independent contractors, who are responsible for their own taxes.