Working as an independent contractor

[Freedoc]

I have decided that I would prefer to work for several employers as an independent contractor rather than as an employee. What do I have to "do" to be an independent contractor? Do I just tell potential employers that I am one, then wait until taxes are due and file as one or must I actually "do" something else? Do I need to register somewhere or something?

I do plan to form an LLC but as I understand it, these are two separate and not interdependent issues.

Thanks!!


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[mgdsh]

I have decided that I would prefer to work for several employers as an independent contractor rather than as an employee. What do I have to "do" to be an independent contractor? Do I just tell potential employers that I am one, then wait until taxes are due and file as one or must I actually "do" something else? Do I need to register somewhere or something?

I do plan to form an LLC but as I understand it, these are two separate and not interdependent issues.

Thanks!!


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These are probably best answered by an accountant. Mine takes care of everything (forming the corporation and telling me to pay what/where).

 

[michaelrack]

The employer has to decide that you meet criteria to be an independent contractor (it is his legal obligation) and then he will pay you and give you a 1099 (if you are an independent contractor) form in January. An accountant can advise you on LLC vs sole proprietorship and can help you with the w9 form.

 

[F0nzie]

1. Get an accountant.
2. Get an EIN or use your social security number
3. Register with the IRS and make estimated tax payments
4. File your 1099 at the end of the tax year.

 

[whopper]

Make sure this arrangement is financially worth it. Working at several places usually destroys the possibility of good benefits. In Ohio, what I would do is work for the state. They give full-time benefits if you work for them 20 hours a week, including giving you credit for a life-long pension, and spend the rest of my time doing the independent stuff. Other states might not allow you to do this but I'd at least look into it because such things as health care and a pension do matter.

 

[Freedoc]

Make sure this arrangement is financially worth it. Working at several places usually destroys the possibility of good benefits. In Ohio, what I would do is work for the state. They give full-time benefits if you work for them 20 hours a week, including giving you credit for a life-long pension, and spend the rest of my time doing the independent stuff. Other states might not allow you to do this but I'd at least look into it because such things as health care and a pension do matter.

Thanks for the input.
What would you consider "good benefits"? It seems to me the security seeking drive in many propels them toward positions with benefits though they actually can make more from several employers and more importantly keep the upper hand in future negotiations and ability to walk away from the table. Health insurance can be purchased for 350-700 or so per month depending on how extensive which is really pocket change considering pay we can demand from employers when we have leverage. As for 401K hardly anywhere matches with any significance these days, though there are exceptions - I'd rather not toil my life away in golden hand cuffs if they require me full time and or wont allow for competition especially given my creative interests that are not supported by such employers. As an llc my understanding is that one can contribute significantly to a sep ira again potentially make up the difference by demanding higher rates with the maintained leverage and other endeavors.
Then I suppose there is disability - that I still need to look into as far as what I would have to pay but again it seems the above logic may trump this as well.
As far as PTO, I would prefer maintaining control over my schedule, keeping the upper hand and ability to demand rates and take unpaid time off than have paid time off at a lower rate and as a wage slave.

Comments are welcome. Thanks!


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[Freedoc]

These are probably best answered by an accountant. Mine takes care of everything (forming the corporation and telling me to pay what/where).

Thanks,

Where did you find this gem? Did you search for a particular accountant specialty title or experience? I'm basically wondering what search terms to help find an accountant with such expertise. I will of course ask around my colleagues as well.




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[michaelrack]

. As an llc my understanding is that one can contribute significantly to a sep ira le

An LLC is not necessary; I have a Sep IRA as a sole proprietor

 

[mgdsh]

An LLC is not necessary; I have a Sep IRA as a sole proprietor

I think what he meant by LLC in this context is a business entity.

Yes a SEP IRA can be great. You can put away 25% up to $50kish which gradually increases every year.

The other downside to the retirement aspect is that most of these places require people to vest or stay there for 10+ years. That's a long commitment when you don't even know if you'll like working at ______.

 

[mgdsh]

Thanks,

Where did you find this gem? Did you search for a particular accountant specialty title or experience? I'm basically wondering what search terms to help find an accountant with such expertise. I will of course ask around my colleagues as well.

Personal friend who has been working as a private CPA for years. Always provided me with great advice when I'd ask. When it came time to find someone to represent my interests I didn't have to look far.

 

[zolof]

Freedoc, if you don't mind me asking what are you thinking in terms of dividing you week? Are you thinking only outpatient at different locations, or a mix of outpatient, inpatient and other types of coverage?

 

[whopper]

The "golden handcuffs" analogy can be a worthy one. A lot of whether or not you want to work for the state (or VA) depends on what you want out of it.

Most full time jobs will offer a 401K or an equivalent 403B. The latter is pretty much the same thing but done with a state institution.

My current job gives about 90K worth of benefits. The employer pays my malpractice, they match my retirement investments, and if I chose (I did not choose to do it this way), I could've gained credit to get a pension.

You have to decide for yourself if the freedom is worth what will likely be less benefits. For some it will be, others no.

 

[bearpsychmd]

Just make sure your work as an IC doesn't end up being like an employee, a pay differential of 1.25 at least as well

 

[BestDoctorEver]

Make sure this arrangement is financially worth it. Working at several places usually destroys the possibility of good benefits. In Ohio, what I would do is work for the state. They give full-time benefits if you work for them 20 hours a week, including giving you credit for a life-long pension, and spend the rest of my time doing the independent stuff. Other states might not allow you to do this but I'd at least look into it because such things as health care and a pension do matter.

That is a perfect way to make a lot of money while having benefit... I wonder if the VA has 20hrs/wk jobs with benefits for psychiatrists...

 

[michaelrack]

That is a perfect way to make a lot of money while having benefit... I wonder if the VA has 20hrs/wk jobs with benefits for psychiatrists...

My wife works for the VA as a parttime psychiatrist; I think she works 24 hours a week. She gets benefits.

 

[Smokemont]

My wife works for the VA as a parttime psychiatrist; I think she works 24 hours a week. She gets benefits.

Are these part time jobs at a VA plentiful? Anything your wife dislikes significantly about her job? Sorry about the specific questions but this seems like an ideal situation in my naive opinion. It appears to give a lot of freedom.

 

[zolof]

Are these part time jobs m-f? I heard of some that are, but I think it would be nicer if they could be a few days a week so that one could pursue other independent work.

 

[michaelrack]

Are these part time jobs m-f? I heard of some that are, but I think it would be nicer if they could be a few days a week so that one could pursue other independent work.

It varies, depends on what that particular VA needs, and how much they want you

 

[cleve]

you could check jobs in your area on fillineyedoc.com. I have found lots of fill in jobs through them in Arizona and California. There is nothing like being the master of your own schedule and since I do other things like real estate investing, I need to have a flexible schedule. It has its advantages, as long as you find a consistent source of jobs and good pay. fillineyedoc allows you to bid on jobs so you know you get paid what you want.

 

[Shikima]

Are these part time jobs at a VA plentiful? Anything your wife dislikes significantly about her job? Sorry about the specific questions but this seems like an ideal situation in my naive opinion. It appears to give a lot of freedom.

www.usajobs.gov