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More people are becoming 1099 employees or independent contractors.
This employee classification structure is beneficial for both workers and employers.
Workers can choose their own hours. Depending on their job, they can even work from anywhere. Remote work, flexible work, and co-working spaces are increasing in popularity.
Must See | 10 Benefits of Working From Home & Being Your Own Boss
Independent contractors are also useful to employers. They save money. They don’t have to pay full salaries, benefits, and they can hire when they need to.
Are you a worker who’s looking to be an independent contractor? Or did you recently land a role as an independent contractor?
There Are Five Important Facts If You Want To Start Working Independently
#1. You Need to Start Saving
There’s one major downside if you’re an independent contractor: the work isn’t guaranteed. Since you’re not an official employee, the company isn’t entitled to keep you hired or provide unemployment benefits.
In case your gig tells you they don’t need you, you need something to fall back on. Start saving as much as you can to ensure your finances are always covered.
Related | 10 Easy Ways to Make and Save Money You Haven’t Tried Yet
#2. Outsource a Tax Preparer or an Accountant
As a freelance employee, your tax classification is different than a traditional employee’s. Rather than receive form W-2, you receive form 1099. This form shows how much you owe, not how much tax you earn back.
You also can’t do your taxes with free online software. You can — but it’s difficult and you risk a tax audit. To avoid any mistakes, outsource a tax preparer or an accountant.
A tax professional will handle your tax duties and can even apply different deductions to decrease your tax load.
#3. Handle Your Own Benefits
One of the perks of being an employee is having a benefits package. Everything from retirement savings to healthcare is covered under your employer.
But employers aren’t obligated to pay their freelance employees any benefits. So, you must take it upon yourself to handle your own benefits.
Open up a retirement savings account and buy your own health insurance. Fund your own vacation time and take your own life insurance policy.
#4. Negotiate Pay
There’s a major freelancing benefit: you can negotiate a higher raise. And you’ll probably be more successful than a traditional employee.
As an independent contractor, you’re saving the business money. They’re not paying for your benefits and they’re not paying a full salary. They also might be using your services temporarily.
If you notice they’re underpaying you, point out that you’re saving them money by going freelance. State your rate of pay and tell them they need to match it. They will usually oblige — especially if you have a great portfolio and experience.
#5. Connect With As Many Companies As You Can
As a freelancer, you’re not tied down to one company. So why stick with only one? Get your feelers out and contribute to ask many companies as you can.
If you’re a writer or an expert in SEO, there are many companies that are constantly hiring writers.
There are other great companies that hire and outsource freelance professionals.
Always search around and apply when you see an open position.
Are You Ready to Become an Independent Contractor?
If you want to ditch the 9-to-5 lifestyle, there are lots of benefits when becoming an independent contractor. But don’t walk in blindly. Follow these tips and succeed as a freelancer.
Contract work isn’t for everyone but you’ll know if you were made for the gig economy.
If you’re a writer and need more help making money as a blogger, continue searching our website.
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