Essential Tips to Become an Independent Contractor

Believe it or not, it is easier to be hired as an independent contractor than an employee. The reason behind that is because it costs less to hire a contractor than an employee. This means that an employer doesn’t have to spend on taxes and other kinds of payment whenever a contractor doesn’t have work.

So if you’re willing to be hired as an independent contractor without minding of not being paid while slacking off, here are a few essential tips to help you with that.

  1. Create an Attractive Name
    Don’t use your personal name if you’re going for the road towards being a contractor. Instead, create a name that will surely lure in potential employers. Print invoices and business cards and slap off your creative business name on it. To do that, you can file a fictitious business name statement which is quite inexpensive.
  1. A License is a Must
    Everywhere you go, what country you are in, a business needs a license. It is like the talisman of every business that shouldn’t be overlooked. You don’t need to worry about the expenses of getting such paperwork since it isn’t even costly to begin with.
    Do this by visiting your city’s clerk office and ask for some papers to fill in. However, keep in mind that you might be required to get an additional professional license depending on your trade. If you want the easier side of things, you can alternatively go to your city clerk’s website where you can download the forms which is less time-consuming.
  1. Mind Your Taxes
    Since you’re an independent contractor, you have to tend all your taxes by yourself. Better yet, you can hire a tax professional to help you with that. Should you opt to be a sole proprietor? Or fancy being a professional LLC? Either way, what you need to do is to create a tax audit flag.
    What your tax person does is to request for quarterly payments if you’re earning for more than $3,000 to $4,000 a year. However, if you’re not earning as much then he/she will probably skip this one.
    Since your employer doesn’t mind your taxes, you can take this as an advantage. In fact, you can deduct as much expenses you want to deduct that employees can’t even do. What’s best is that you have the option to create a tax loss to lower your income tax.
    Another thing that you can do is to pay your estimated taxes in advance to strengthen your claim as an independent contractor.