Being a 1099 Contractor And Working From Home

I am very lucky in the fact that I get to work remotely from home.  This comes with pros and cons, but for me the pros far outweigh the cons.

I have a very supportive wife that understands that when I am in my office (at work), that I am working and not just hanging out at the house.  She doesn’t ask me to do chores, try to make small talk, or bother me in any way.  I hear from far too many developers that they couldn’t work from home because their significant other wouldn’t treat it like a job.

At the same time, you have to make an effort to separate work/home life.  You have to walk away for some time to clear your head and have family time.  Some people that work at home feel like they are ALWAYS at work, and get burnt out.

I am employed as a 1099 contractor, and wanted to share some things to consider for people new to it.

1. Make sure your pay level is equivalent to what  you feel it should be.  You will be responsible for additional taxes that you have not had to pay in the past.

2. Make sure your pay is high enough to cover your benefits.  As a 1099 contractor, you will probably not have any benefits being provided to you, such as health insurance, retirement, etc…

3. Talk to a tax professional right away.  Don’t wait for the following tax season, otherwise you will probably be faced with some penalties.  As a contractor, you have to pay estimated taxes 4 times a year.

4. Speaking of, make sure to put enough money aside to pay your taxes.  The pay you receive has not been taxed, so take time to put some money into another account automatically, so when if comes time to pay them, you are not caught off guard.  I have heard from some people that didn’t do this and they are paying penalties to the IRS years later.

 

 
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