Independent contractors are an option many people choose for employment when they go into business for themselves. Rather than working as an employee for a business, contractors offer a service under contract. They do not enjoy some of the benefits of employment, such as insurance or employee-sponsored 401k accounts, but they do enjoy independence and generally can command a higher per-hour salary when compared with salaried workers.
Many people dream of the day they become an independent contractor in business for themselves. In reality, while there are many benefits to being a contractor, there are risks as well. You will have less of a safety net and may have fewer legal remedies outside of civil court if professional relationships with clients sour. Your bookkeeping needs may also be complex since you may have multiple clients and potentially even multiple streams of revenue. Here are some tips for contractors on how to keep things straight.