thanks for your inputes. those are all helpful. Anyways, exploring Odesk, it seems that there are more freelancers outside US that offer cheap services. I'm considering them too. I believe that paying taxes should be the same for them. They should pay their own taxes as what their country impose. If it's not, can someone shed some light?

I have some staff which I found through odesk. One of the employee work with me full-time but I still send him 1099.  No specific laws as far as I am aware. 1099 is way easier than hiring a full-time employee.  

I've hired dozens of people for different odd tasks.  If they are someone you simply pay, it's a 1099 deal.  If you want to set them up for a contractor relationship, then they are best off forming an LLC as they can now write off business expenses.  Each situation will vary.

If you are adding writers as staff, then they are simply employees and pay taxes accordingly. If you are recruiting them as independent contractors, and they do not qualify as employees, then they simply receive 1099 income when you pay for their services. Brian Nelso RedX Real Estate -- this post was edited to remove a commercial link

As i write this reply, I'm already looking at Elance and Odesk. Thanks for this input ash23, really helpful.

I think there is no such law. But I would also suggest that you should try to call only interested parties and don't run after a bunch of phone-numbers and calling thousands of them.

liza0728,   If you are looking to hire independent contractors you should check out elance or odesk. They allow you to post jobs in specific categories and people qualified in that field will apply to your post. You can browse through their resumes and previous work performed through the site. You can specify if you need them for part-time, full-time, or to perform just a few tasks. It's a great place providing jobs to people all around the world.

I work mostly in the virtual world, but as of the past year there has been a lot of static involved with Worker's Compensation insurance coverage which is ridiculous but no one seems able/willing to unthread the tangle.  Watch for it!

I think you're right. I think I need to read more... Thanks again!