If you’ve been a regular employee for a company for years now, you might be wondering what it’s like to become a self-employed individual. Becoming self-employed isn’t just about working under your own time and choices as there’s more to it than that. There are upsides and downsides to becoming this type of employee.
People who are self-employed undergo a lot of names. They are also called independent contractors. Most commonly, self-employed people are called 1099 employees, even though this might seem like an odd name. It’s derived from the IRS’ Form 1099 which helps independent contractors pay their taxes easily.
Now, onto the interesting part. Why are people so enamored in becoming a 1099 employee? Is it really going to mean that you are your own boss? Here are a few benefits and responsibilities in becoming self-employed.
Your Responsibilities (and Benefits) as a 1099 Employee
Your Responsibilities
If you’re a self-employed individual, that doesn’t mean you are free to do as you please. In fact, you should still see yourself as a regular employee but the difference is that you are going to have to file your own taxes and secure your own benefits, whereas some employers do these for you.
You aren’t always eligible to pay your taxes if you’re a 1099 employee. For instance, if you’re a Postmates, Doorhub, or UberEats driver, you can be exempted depending on how much you make, for instance, Postmates 1099 tax exemptions are going to be implemented if you make less than $600 a year but you still have to report to the IRS.
If you make over $600 a year, you’ll be given Form 1099 by Postmates. Regular employees are usually assisted by their companies with regards to filing and paying taxes. This is one of the benefits of becoming a regular employee. If you are a 1099 employee, make it a must to file your taxes and pay for them on time if you don’t want to suffer the consequences.
Another responsibility you have to shoulder is securing insurance and other benefits for yourself. Again, companies tend to help their employees with regard to this matter. Since you are self-employed, you’ll have to do this for yourself.
Worry not however as this is easier as compared to filling your taxes. When it comes to benefits and insurance, you are entitled to the same packages and premiums offered to regular employees. The only difference is that you have to manually secure all of the forms and documents yourself. Once done, however, you have nothing else to worry about.
Last but not the least, as a 1099 employee, you are responsible for making sure that you are working as properly as possible. Self-employed individuals aren’t always under the watch of a supervisor. In fact, you’ll mostly be doing stuff on your own.
That doesn’t mean that you shouldn’t do your job properly though as the companies you work for can still fire you if they don’t like your service as a contractor.
Benefits Of Being A 1099 Employee
In truth, manually filing and paying for your taxes, and securing your benefits are going to be tiring. Once done, however, you can finally enjoy the benefits of being self-employed. These are the reasons why people make the jump to being self-employed but it really depends on what industry you work for.
The most important benefit of being a 1099 employee is that you mostly own your time. For instance, freelance online writers can simply work whenever they want to. Depending on who they work for, they can simply take up writing assignments whenever they want to. If they are busy on a certain day, then they can simply deny new requests.
The same goes for drivers of delivery services such as Uber, Postmates, and others. You can work only as much as you want to. If you own a business, being a 1099 employee means that you can have another way to make money without sacrificing your time for your store or restaurant.
Another benefit is that since you work under your own volition, you can make as much as you want to. Salaries for self-employed individuals are sometimes output based.
If you really want to work hard, then you can squeeze in as much work as you can. On the other hand, the only way employees can make more money is by going overtime or by getting a raise.
Since you are working at your own pace, you’ll have a better handle on how you balance your life and work. Many parents become 1099 employees because they also want to have time for their families. It is not easy to do this if you are stuck at a 9-to-5 job.
Being a self-employed individual also means being able to remove career limits under your name. For instance, if you’ve been working long as a teacher, you can still take up a freelance job as a writer, graphic designer, and other professions so long as you have the skills and credentials for it.
You can ramp up your resume by taking up online classes and certifications. Since you own your time now, you can invest in yourself more by learning new skills.
This broadens your career choices even more. This doesn’t mean that you can get hired for any job you see online, however. What this basically means is that your choices are much wider as compared to what’s offered to you if you’re a company employee.
The keyword for 1099 employees is independence. You work at your own pace and time, you are free to work whichever job you want so long as you get accepted, and most importantly, you mostly don’t have to work under supervision.
There are many benefits to becoming a regular employee and a self-employed individual. It all really depends on what you want to prioritize. If you want a better work-life balance, then being a 1099 employee is the better choice. However, if you want a more stable job, then it’s much better to be a regular employee instead.
