What are the advantages & disadvantages to working as an independent contractor vs. W-2 employee?

Being an independent contractor gives you the advantages that you get paid by the job, that you can set your own hours, or work from home. If you don't get those advantages, then the advantages from independent contractor status are all on the employer side. They don't have to pay for your insurance or FICA, or withhold taxes.

If you are working as an independent contractor on a 1099 form, be sure you pay your state and federal taxes and FICA on an estimated basis. Otherwise, there are penalties. You'll have to get your own health insurance.

Remember these disadvantages when negotiating compensation for any work you do as an independent contractor. Essentially, you are your own employer. If you want to arrange to be eligible for unemployment insurance, contact your state's unemployment office.

They can sign you up for that. Being your own employer can be rewarding: You can arrange your schedule to include important 'me-time', you can make up for the fact that not every employer has a full-time job available, and you can choose the kind of work you want to do. Just be aware that you'll probably want some good professional tax advice--and that you need to keep good records.

Also, if you work from home--turn your cell phone off, and hang a 'Do Not Disturb' sign on the door.

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