Independant Contractor Job --? get own malpractice insurance

[toothfairy482]

I am graduating in June and got a job offer from one of those 'traveling mobile dental clinic' ....they are hiring me as an independant contractor , which means I have to get my own malpractice insurance and file taxes on my own.

Have any of you worked as an independant contractor? What are the pros/cons? What should I be thinking about ? Its my first job out of school so Im taking it just because ill be getting some experience.

p.s- does $550 a day sound decent for a first job?

---

Members don't see this ad.

 

[txaggie03]

Your income taxes as an independent contractor will be roughly double those of an employed personal. More available tax deductions will open up, but not sure if worth it. I suggest researching this part of it more.

 

[toothfairy482]

Where can I get more information about what exactly consists of an independant contractor? Every dentist i've spoken to doesnt really know what that means....
And why are the taxes doubled?

 

[txaggie03]

Independent contractor mostly means that they dont have you on on their pay roll as in employee of their clinic. It lets them pay you like you would pay a plumber to come fix your toilet: the plumber is not an employee of yours, you are paying her for a service.

It removes them from needing to provide you health insurance, CE credit, malpractice insurance, or any benefit or perk, other than cutting you a check (same as the plumber reference).

Like the plumber, being an independent contractor, you will be considered self-employeed.

A little research shows that most DDS file as independent contractors. I didnt know that.



So, nevermind. Forget what I said.

 

[txaggie03]

The only reason I chimed in was because my summer jobs in undergrad were set up with me as an independent contractor (lake construction). I was able to deduct for using my truck for work, mileage, tools, and other things that had I been an 'employee' I would not have been able to deduct. However, my income tax was much more than that of an employee.

If you have a CPA you use, that would be a good start. If you dont, it might be time to find one.

 

[uthscsaalum]

Get a CPA.

Your income taxes won't double and will likely be less if you talk to your CPA and figure out what expenses you can deduct and keep receipts.

What will double is the social security taxes and medicare taxes. It will be hard for you to make up the difference in the doubling of SS/medicare taxes through income tax deductions.
http://www.ssa.gov/oact/progdata/taxRates.html

One good thing about SS/medicare taxes is that you stop paying them at around $107,000 in income. If you manage to make over 200K as an independent contractor doubling that rate doesn't hurt so bad since you don't pay it on earnings above 107K.

If you are weighing multiple offers against eachother make sure that you compare total compensation package against total compensation package.

Since the only compensation an independent contractor job provides is money, it should pay a decent amount more than another job offer that pays you as an employee (smaller SS/medicare tax), pays for medical insurance, 401K matching, pays for CE, pays for malpractice/disability/life insurance, and provides paid time off.