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What is the Difference Between Payments to Independent Contractors and Professional Fees?

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The difference between payments to independent contractors and professional fees is to whom the money is going. A payment to an independent contractor is categorized as a payment to an individual who provides services for your organization under an agreement and outside of an employer-employee relationship. (Independent contractors are not paid through your organization's payroll, and your organization may provide them with an IRS Form 1099.) Professional fees on the other hand are fees paid to companies and organizations for services rendered. For example, if your organization paid an accounting firm to do conduct an audit for your organizationthat would be considered a professional fee. However, if you paid an individual accountant to conduct an audit for your organization that would be considered as a payment to an independent contractor.



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