If you have ever thought of becoming an independent contractor, the following are some considerations to make before starting on what is essentially your own business:
· Independent contractors can generally choose how often and when they work.
· Independent contractors can make themselves available to hire bidders, increasing their profitability.
· Independent contractors can take advantage of applicable business income tax deductions and credits.
· Independent contractors should establish a bona fide business presence for several reasons:
o In order to take legitimate business tax deductions and credits.
o In order to advertise, thus increasing clientele and profitability.
o In order to establish a trusted presence in a professional field. Because of employment tax exposure, some businesses may only work with contractors who have separately-established businesses. In fact, if you are not properly established as a bona fide contractor, you could end up costing the business(es) you contract with significant cost in taxes and penalties for "misclassification." (For more information on worker classification: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee, and http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee. )