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When You Are an Independent Contractor

  • You are responsible for setting aside and paying your own income tax and self-employment tax (effectively the employee’s and the employer’s share of Social Security and Medicare taxes). The businesses you work for do NOT withhold or pay taxes on your behalf.
  • You are not eligible to collect unemployment insurance benefits.
  • You are not covered by workers’ compensation insurance benefits unless you purchase a policy from an insurance carrier.
  • The businesses you work for are required to give you a Form 1099 MISC if they have paid you $600 or more during the year.
  • You may deduct business expenses on Schedule C of your income tax return. You may also depreciate the cost of most business assets.