It’s a joyous time of year, that’s right, TAX SEASON. Those of you close to me (and even some of you not so close) know that I am a huge math geek. I love me some numbers. I even got me a purdy degree from a party school to prove it… But I digress.
Tax season is less about numbers for me and more about another passion, organizing things. Mainly receipts, forms, etc. My mom was meticulous at organizing her tax recepts and I have picked up that gauntlet to carry on.
This time of year always brings up the 1099 versus w2 conundrum, too. As an employer, I am super familiar with the difference between the 2. But as a long time helper of other companies (aka contractor or consultant), I thought I would share my checklist that I make sure that I maintain, so that I am sure I am on the up and up as a 1099 receiver.
- Contract it up – I always make sure I have a contract when I am doing work for someone. This is my assurance that the talked about terms are in writing, but also a good piece of evidence to legitimacy.
- Business licence or sole proprietor – This is a big one for some companies. It’s much easier to show someone is a contractor if they have a business license. You can get one through your state and it comes with your very own Federal ID Number to boot! I personally go the route of sole proprietor, tax wise, and therefore do not have a FIN. This just means I have to have cross my t’s and dot i’s in a couple more places to justify my existence.
- Advertising – This could be as explicit as an ad in a trade mag advertising your services or as implicit as listing all the ways people find out about you. For example, if you want to know about my skill set, you can read this blog, my LinkedIn, see my thoughts in clubs or listservs or see me at a speaking engagement. Since most of my stuff in the past has been on the side and via word of mouth, it’s important that I maintain these if I ever get contract work. Having business cards helps too.
- Master of my own schedule – Another big point is scheduling. If you are scheduled to the hours you work, that leans more in the direction of employee – not a deal breaker, but just more on that side of the list. If you decide when you work, you are more of a contractor. Of course, meetings need to be scheduled as we are not in an anarchy (at least I am not). But with the advent of asynchronous communication (IMs, emails, etc) it’s easier and easier to have less face to face time.
- Expertise included – People want to hire me for my expertise in whatever area. Many times, we hire people for their instincts and their ability to react how we would in certain scenarios. Now that doesn’t mean that if they have to know how to use all of the software we use when they start – of course we can train them on that. But there has to be a baseline of ability expected as a contractor.
And we can also give them feedback if their work isn’t what were thinking about. Think of a decorator or painter redoing a room in your house. It’s your house, therefore if they design or paint something that is not to your liking, you don’t have to just accept it. And if there are special instructions to different areas of the room or previous methods used, you will need to explain that too. But they are still a contractor for you.
- My precious (tech) – I have all the technology I need, hardware wise. If I have to buy tablets, apps, software, printer ink, paper, etc – that’s on me. Incurring expenses is just part of the contract work lifestyle – but you also get to write it all off at the end of the year, so it works out.
There are other areas on the differences sheet, but as each person’s situation is different, it’s all case by case. And you will probably never have to justify your existence to anyone. I am just a prepared sort of person, so I like to know I am on the up and up & I am a community person, so I thought I would share.