Pros of Working as an Independent Contractor
As an independent contractor, you are your own boss. That's the main reason why most employees turn independent contractors. Even though you might occupy office space and work shoulder-to-shoulder with employees, companies are not your employers per se, but your clients. As clients, they are not entitled to direct you in your work like an employer may direct an employee. In other words, clients "hire" your services, not you.
Naturally, your clients are entitled to state the results they expect for the rates you're charging for your independent contractor services. It's also in your best interest to satisfy your clients, if you wish to receive favorable referrals for landing more contract jobs. But you decide when, where and how to work to get the job done. It's all about degree of control and independence, according to the Common Law Rules enforced by the IRS and the Fair Labor Standards Act enforced by the Department of Labor.
Independent contractors usually make more money than employees. Companies are willing to pay more for independent contractors because they don't have the expensive, long-term commitments they do with permanent employees, such as benefits, unemployment compensation, and Social Security and Medicare taxes. Independent contractors may also deduct more business expenses than employees, which might sweeten your net pay.
Independent contractors "withhold" their own federal, state and local taxes, unlike employees. This gives you the option of "working the float" on your gross pay, until taxes are due. For example, you might bank it to earn interest.
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Working as an Independent Contractor