Working as an Independent Contractor

There are many many benefits to working as an independent contractor and as you can imagine, there are certain requirements to maximize these benefits. The list below is not comprehensive, instead, it highlights some of the common benefits and responsibilities you will need to consider. If after reviewing this list, you still have questions, give us a call and we’ll do our best to get you an answer.

Independent Contractor Benefits

• Increased Rate of Pay compared to an employee.
• Earn at least 50% more per hour than employees performing the same work.
• No Federal or State taxes are withheld from paychecks as they must be for employees, thus your net pay may be substantially higher.
• Deduct necessary, business-related expenses (i.e. home office, travel and meal expenses) from income tax.
• Establish tax advantaged retirement plans to shelter a substantial amount of your income.
• Greater Flexibility - One of the greatest benefits of self-employment.
• Remarkable flexibility concerning hours of employment.
• Avoid time constraints by controlling when, where, and how much or little time to work as preferred.
• Higher level of independence.
• Eliminate the “Boss” factor - you are the "Boss".

Responsibilities of a Contractor

• Contractors must cover their own health and professional liability insurance.
• You may have to pay estimated taxes throughout the year.
• Contractors must pay both employer and employee share of FICA; when you file your taxes later you may be able to deduct the employer share as business expenses.
• No safety net provided by unemployment insurance.