5 Things to Know About Independent Contracting

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It’s not uncommon for people to work for themselves these days. As the internet has become more widespread, it’s easy for people to offer their services to companies globally.

Believe it or not, there are an estimated 70.4 million freelancers in the United States alone.

Are you thinking of being self-employed and starting independent contracting? Keep reading to learn five things you must know before becoming a private contractor.

1. You Set the Rules

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You may feel like you have to follow a typical work schedule when starting an independent contracting business. Yes, it does make it easier to connect with clients.

It’s up to you to decide when and where you work. You’re free to design your days to work around your schedule and not your boss. You can still talk to clients during regular business hours and handle the work at another time.

2. Taxes Are More Complicated

One of the good things about being an employee is the ease of taxes. They are automatically deducted from your paycheck, so you don’t have to worry much when you file taxes. You’ll even get a refund in most cases.

However, that doesn’t happen when you work for yourself. It’s on you to track how much you owe the government every year. On top of that, you may owe additional taxes that your employers usually pay.

3. You Can Make Deductions

There are some benefits to your taxes being more complicated. In a traditional work environment, your employer normally handles expenses. Those are up to you when you work for yourself.

However, that also means you can deduct those from your taxes. If you can classify something as necessary for business, you can reduce your net profit on your taxes.

4. You Need to Sell

One problem many new contracts have is getting new customers. Unlike a traditional job, your work doesn’t just appear in front of you. You’ll need to learn how to sell your services and convince people to buy.

You can do this yourself or work with a company that offers contractor leads. From there, it’s up to you to keep the relationship good while providing excellent service.

5. You Collect Payments

It’s not hard to get paid as an employee. Give your employer your bank information, and you’re good to go. The same isn’t always true for a contractor.

You need to invoice your clients and follow up on payments as a contractor. There may also be situations when you get paid late. That’s all work you’ll need to handle when you work for yourself.

Independent Contracting Is Worth the Risk

Yes, you’re taking a significant risk when you start independent contracting. You don’t have a company to fall back on and may not make it on your own. However, there are many benefits that make being a 1099 contractor worth it.

Now that you know the benefits of independent contracting, you have what you need to decide. Weigh the pros and cons of working for yourself to determine if you’re ready to take the first steps of being self-employed.

Check out the blog to find advice that can help you grow a freelance business.