Businesses that grow ultimately need more people to succeed. There are several pros and cons to being hired as an independent contractor.
The pros of being hired as an independent contractor include:
The cons of being hired as an independent contractors include:
With employees, employers typically withhold state and federal taxes, as well as social security and other state or local deductions. With independent contractors, however, the employer does not withhold payroll taxes because the employer does not provide the contractor with any benefits. Instead, the contractor's income is considered miscellaneous income when he or she pays income taxes. As such, it is important for independent contractors to keep track of their income for tax purposes.
Sometimes you may be classified as an independent contractor, even though your job characteristics are more similar to an employee. If the Internal Revenue Service (IRS) discovers that a person has been misclassified, the IRS can force the employer to pay back taxes and fines as well as provide the employee with health benefits.
“Sole responsibility” means an independent cannot hold anyone else responsible if an injury results from his or her work. For independent contractors, this is a loss of a very valuable protection for employees, which may be worsened by the lack of employer provided insurance.
An experienced employment attorney can help you determine whether you are an independent contractor or employee, or whether you have been misclassified, and explain what rights attach to each classification. The attorney can also assist you in bringing legal action if necessary.
Last Modified: 03-04-2015 10:57 AM PSTLaw Library Disclaimer
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