Does anyone here work as an independent contractor?

[CTLawGuy]

(if you're not sure, an independent contractor gets a tax form called 1099, and not a W-2). If so, please be so kind as to answer some questions for me:

1. What is the nature of your work?

2. Do you work for one company/customer?

3. Do you contemplate doing the same type of work for more than one company/customer at a time?

4. Do you consider yourself (or hold yourself out to be) an independent businessperson?

5. Did you do the same type of work, as an indpendent contractor, before your current job?

6. Did your company/customer train you (or have you trained by someone else, or instruct you to get training at your own expense) to do your core business function?

7. Does your company/customer provide you with(sell you, lease to you, give you) a substantial amount of the materials you use to do your job, (or have someone else provide them to you, or instruct you to buy them on your own)?

8. Do you believe you should be considered an independent contractor?

I've done "independent contracting" jobs before and they seem to me like simply shams to get around work protection laws like the minimum wage. I'd be interested to hear people's experiences.

[Tandalayo_Scheisskopf]

1. Most certainly they are shams.

Have been for years. The IRS started to crack down on the hustle, but the administration...well, you know where I am going with that.

The US Chamber of Commerce has a lot of influence.

[angrycarpenter]

2. I used to

I worked as a trim carpenter. The man I worked for talked all of us into becoming sub-contractors because the workmans comp payments were killing him. He was going to pass the savings on to us. About 5 months after I finally got through the red tape and got legal, Florida changed the laws and put me out of business. I was fired on Jan 1 2004.

I still owe the IRS a lot of money because I could not afford to pay my fourth quarter taxes.

At the time it seemed like a good idea but I guess that will teach me to have dreams. There was a time when a man with a truck and some tools could go out and work for himself and do well. But now the hurdles to becoming your own boss in the construction industry (in Florida) are almost insurmountable.

1099's are for suckers unless you have excellent credit and make enough to put money away.

[earthlover]

3. virtually all real estate agents are independent contractors

it is a real rip off. The company doesn't have to contribute towards the worker's social security....so the independent contractor winds up paying 15+% for social security! Ouch! As an added rip off, they are ineligible for group coverage for health insurance, so have to get individual plans.

Ah... the joys of being your own boss....NOT!

[Lex]

4. There are true independent contractors for certain.

But many times employers do use it as way to get around paying the proper employee withholdings and the like.

The IRS does have some information about it and employers can be retro-actively made to pay the proper taxes if they get caught falsely claiming someone is an independent contractor:

http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

[idovoodoo]

5. I have at times gotten W2s and 1099s for the same period.

Now I only get the 1099s from several sources...I consider myself an independent contractor and do so because it's what I am and also because it's what I want. My work is of a highly professional nature for which I was trained many decades ago. :-)

[JorgeTheGood]

6. an old-timer would like to chime in ...

I started working as an IC back in 1969 (after Vietnam -- after I sobered up from Woodstock :D). Quick math says that's 40 years (OK -- 39) so that pretty much qualifies me to critique the business.

Once you get the hang of it, you can do quite well for yoursel ... BUT, it's not for everyone ... simple as that.

As a bare minimum, you need to have good health to keep those cost as low as possible (as mentioned up-thread). Fortunately, I have VA health care which, regardless of what you hear about Walter Reed (and others) ... is pretty good health care. So I take that off the table of concerns.

Most of all you need absolute discipline about paying your quarterlys (if required) and putting money away from every paid-invoice to a fund for your social security payments of 15% (as mentioned up-thread).

Also, you need to play by the rules and stay on good terms with the IRS ... it's not that hard to do.

Over the years, your good service will speak for itself and you'll find contracts come much easier with clients willing to pay more due to your reputation and expertise -- the discipline I mentioned, takes care of just about all the worries and you'll find yourself (someday) way ahead of the others that work as direct employees for the man.

The biggest advantage of being a contractor, IMHO, compared to an employee is the lack of stress. Presuming you have everything in place to run a smooth contracting business, the stress should be minimal, especially compared to being an employee that doesn't know if the job will be here or in Bangalore tomorrow.

My blood pressure is 118/79 and holding.

[kineneb]

7. have been "indy" for years-

Note: Right now, I am not "working" for myself; I am currently "employed" in the world's most difficult job, for which I get no pay and much heartache: caregiver to someone slowly dying.

To answer your questions:

1-a. musician at Renaissance faires
b. farmers' market manager (1990-2002)

2.a. as musician: either payed by director or non-profit organization
b. as F.Mkt. manager: payed by a not-for-profit organization, had formal written contract.

3. sure, musicians work by the gig or event

4. yes. I also teach piano lessons, and occasionally help people with their computer problems.

5. yes and no. (see note above)
6. No. My education was my responsibility. I was under contract for my abilities.
7. No. I own my own musical instruments. and had home office with own equipment for F.Mkt.
8. Yes. I do not have a "boss" as a musician. Director (sometimes), yes, but not "boss."

I always had a professional do our taxes. So I paid the proper taxes, and did get deductions for milage, the home office, and materials costs. I never did any withholding, since we paid extra through Hubby's W-2, and my gigs never paid very much.

If someone earns more than $600 (this amount may have changed)for an event, they have to get a 1099 at the end of the year.

[TreasonousBastard]

8. Not now, unless a writing or photo gig wanders in, but...

in the past I worked for a time, and out of desperation, as a cable TV installer and as a limo driver. Oh, and as delivery driver. The cable TV thing was a huge cockup when the local cable company decided to save money by firing its installers and hiring an outside contractor. Most of the installers were ex-employees, with a few like me brought on for a rebuild. We worked for a month as unpaid trainees and then we had to incorporate and find liability and comp insurance. Gross pay tended to average about $600 a week, less whatever taken out for the tools we had to buy. That didn't last long. Shortly after I left, I noticed the "Cable TV Contractor" trucks were replaced by Cablevision trucks.

The limo companies mostly paid on the books, but two I know of paid you as IC's. Both got in big trouble, with one owner going to jail for various reasons, mainly bribing county officials, and the other one in Federal tax hell but I don't know how it ended up. Pure scam-- no way could you be considered an independant when you worked 60-80 hours a week for them and used their car, but they kept it up for years.

Having a van, I picked up some delivery jobs here and there, which were legitimate 1099 work, but many outfits tried to keep you around all day without putting you on the clock while you waited for work, or putting you on the books when you got some. They were pretty close to the line, if not crossing it.

Did do some serious consulting, writing, and other stuff over the years, but that's all legitimate freelance work.

Bottom line-- make no mistake abut it, employers are often trying to reduce labor costs by redefining "employees" and using contractors and temps to do the work. There are consulting firms out there making good money showing them exactly how to do it.