If you’re thinking of becoming a contractor as a profession, then why not go for it? An independent contractor manages his or her own business. Independent contractors, also known as freelancers, earn their living from their own businesses.
Independent contractors work for several clients on various projects. Here are three benefits of becoming a contractor:
- You can earn more money. Did you know that working as a contractor can let you earn more money? Compared to other employees, being an independent contractor will let you earn as much as 20 to 40 percent more per hour. The reason for this is that employers are not required to pay Social Security Taxes of the contractor as well as unemployment compensation taxes and employee benefits like sick leave and health insurance, among others. ICs will simply have to pay for these on their own. The amount of money you earn per project also varies, depending on your agreement with the client. The more projects you have or the more skilled you become, the more money comes in.
- Being a contractor gives you more flexibility. You can manage your time better and you can be your own boss by working as a contractor. This means that you can work at your own pace at your own time as long as you are able to accomplish your tasks. This also gives you the freedom to make your own schedule. You can go on vacation anytime you like, get to work anytime of the day. You can even opt to have a part time job to earn extra income.
- Being a contractor saves you from paying federal or state taxes. Federal or state taxes will not be withheld from your salary unlike other employees when you’re an independent contractor. Contractors would just pay estimated taxes to the IRS. This way, you can still use your money for other necessities. You also get the chance to decide how much tax to pay as long as you don’t underpay. Otherwise, you will have to face penalties. Because you have greater control and freedom when it comes to estimated tax payments, you can manage your money better. Aside from taxes, you can also deduct from your income tax expenses related to your business as long as they are reasonable. Such expenses cover rental fee for the office, travel expenses, meals, insurance, and so on. You can maximize such deductions unlike other employees.
Becoming a contractor can be a good option for you. So, why not venture into this field if you think you have what it takes to be a good one?
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