Employee vs. Contractor

[surveysitereviews]

I have been working online (full-time) for about four and a half years. All of my work from home jobs (transcription, data entry, search engine evaluation, and market research) have been as Independent Contractors. I haven't actually come across a company hiring online workers as actual employees. You might check some companies that hire telecommute customer service workers. Some of those jobs might be W-2 employment opportunities.

However, you are right that being an independent contractor is a bit scary when it comes to taxes. You have to remember that Independent Contractors end up paying higher payroll (Self-Employment) taxes, because we have to pay both the employee and employer portion of Social Security and Medicare taxes. That comes out to about 15.3% of net earnings. In addition to SE tax, we still have to pay regular federal and state income taxes.

In short, you should study up on the tax issue if you decide to become an independent contractor.

[hnsignorelli]

Hi, I wouldn't be terrified of the taxes if that is all you are worried about. Takes a little to learn but totally doable. The most important part is to save about 30-35% (maybe less depending on income level) and pay quarterly. It can actually be a benefit when it comes to saving for retirement because you have other options like a solo 401k. Many benefits to 1099 income.

[StevenKenneth]

That's going to vary a lot. Some people pick contractor and outsource the work, because it's much easier than having an employee in payroll. But then again, it depends on the kind of work. Jobs like transcription are outsourced to firms rather than individuals.