An independent contractor is paid to do work for clients but isn't their employee. You choose how to do the work, and you handle your own taxes and benefits.
Contractor vs. employee
Classification depends on how much control the client has over your work. If a client controls your hours and methods like an employer would, you may legally be an employee. The IRS and the Department of Labor publish guidance.
Steps to get set up
- Decide your services and rates.
- Register a business name if required in your state.
- Consider getting an EIN from the IRS (free) so you don't have to share your Social Security number.
- Open a separate bank account.
- Use written contracts that cover scope, payment terms and deadlines.
- Look into liability insurance if your work could cause damage or loss.
Taxes
Clients generally don't withhold tax. You'll usually pay income tax plus self-employment tax and may need quarterly estimated payments. Track every business expense.
Benefits you'll need to replace
Health insurance, retirement contributions and paid time off are now on you, so build them into your rates.
Educational information only. Results vary and nothing here is a promise of income. Check local rules, platform terms and tax obligations before you start.