The number of workers identifying themselves as “independent contractors” is growing in the United States. In 2005 the U.S. Bureau of Labor Statistics determined that the number of independent contractors rose from 6.4% of the workforce in 2001 to 27.4% of the workforce by 2005. In 2010, Navigant Economics claimed the following:
When a small business owner first starts out, it’s often possible to drive at least a little bit of business without too much marketing. But, if you do everything right, you’re rapidly going to find yourself in a position where you have too much to do.
You don’t need to invent an innovative product to be a real entrepreneur. Self-employed services specialists are just as important, and most often operate remotely (from anywhere in the world) in this age of the Internet. Many of these new entrepreneurs were regular employees a few years ago, focused on a skill specialty. They are not the generalists required for new product startups.
Every time you take on a new client as a freelancer, you have an opportunity to cement a working relationship that can last for years. To do so, you need to stand out with your clients from the get-go. The tough part is balancing that need with work you need to get done.
Are you a freelancer or independent contractor who receives a Form 1099 instead of a W-2 form at the end of the year? If so, then you should be aware of the five tax issues that are the most likely to cause IRS trouble for anyone subject to 1099 reporting of wages or income.
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