Tip of the Month
for Independent Contractors
Use an Employer-of-Record* to
reap 3 great advantages*payroll/accounting method must be “Accountable Plan”
1. Lower your taxes by thousands of dollars each month/year! Use your business-related expenses to reduce your taxable income. You’ll see these savings immediately, not at the end of the year. Your business-related expenses will be stream-lined. You will reap major tax savings!!!
2. Join a Group Health Care Insurance Plan (pre-tax of course). Knowing that you are guaranteed to get on the insurance plan is a big relief! You also are relieved of the task of attaining Certificates of insurances that your clients request (Workers Comp, Liability, Errors and Omissions, etc.). No need to deal with multiple insurance brokers. 401K is typically a benefit offered as well.
3. Automatic tax filing. Quarterly, your taxes will be automatically filed with the State and the Federal Revenue departments. The taxes will equal your self-employment taxes (but remember that those business-related expenses reduce your taxable income by a bunch!). As an added plus, you finally get to contribute to your Unemployment Insurance account, and your Medicare account. The latter may be a nice asset for the day when you actually retire!