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An independent contractor agreement allows clients to hire contractors for specific jobs and is often referred to as a 1099 agreement, named after the IRS form contractors must file. Unlike employees, independent contractors do not have taxes automatically deducted and are responsible for paying their own taxes. This highlights a key legal difference between independent contractors and employees. Independent contracting offers more flexibility but less stability. Over the past decade, the number of independent contractor positions has grown significantly due to technological changes. Before creating an independent contractor agreement, it's important to assess whether the work is eligible.