How to Legally Work as an Independent Contractor

Starting up a business might be a hectic job and require a lot of capital investment. However, there are certain businesses which do not require a huge initial investment and you can start it up with little money. For instance, becoming an independent contractor is a profitable business and it does not need any huge sum of cash to begin with. There are a number of pros and cons of opting this field but you need to know completely about the structure of your services and business first. However, there are a number of rules and regulations you need to follow for conducting your business as an independent contractor.

Instructions

  • 1

    Determine the Type of Services

    Before starting up any sort of work, you must determine what type of contractor you want to be. It all depends upon your personal skills and abilities to perform duties. For instance, if you posses administrative skills, then becoming an office organiser, word processing or bookkeeping independent contractor is the way to go.

  • 2

    Determine your Remuneration

    Then you have to determine how much you will charge for offering your services to the clients. Search for the prevailing remuneration rates in the market or contact other such companies to find out how much your competitors are charging their customers. You need to set a competitive value to attract new clients.

  • 3

    Learn Record Keeping

    As an independent contractor, you must be able to keep the records of every single transaction you make in the course of your business. Effective bookkeeping software in the market include Peachtree and Quicken, which makes the record keeping process relatively easier and faster.

  • 4

    Get Registered

    You must apply for an employer identification number at the Internal Revenue Service website to legally get registered as an independent contractor. You can also sought help by calling the IRS Business and Specialty Tax Line.

  • 5

    Tax Filing

    Being an independent contractor, you should learn about filing your tax return. You can also seek advice from a chartered accountancy firm for tax filing if you have any sort of confusion in the process.

  • 6

    Professional Licence and Insurance

    Your particular field of work might need you to have certain professional licence and insurance. Consult a business insurance professional for determining the necessary insurance and licences you must have to conduct your business.

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