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What does it mean to be a
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Work at home Independent Contractors
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Work at home Employees
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| Work at home and are usually considered self-employed for legal and tax purposes | Work at home and are considered employees for tax purposes |
| Receive a 1099 at the end of the year from employer | Receives a W2 form at the end of the year |
| Are responsible for taking out their own taxes | Employer often takes out and pays taxes |
| May have many tax benefits, including possibly paying less tax and having more tax deductions | May have minimal tax benefits. |
| Work at home generally enjoying more freedom, with the employer only interested in the end result of the work, not how the work is performed | Work at home with more freedom than office-based workers but generally have less freedom than independent contractors; employer able to control virtually every aspect of the work even though you work at home. |
| Often paid based on actual work completed, not time spent | Paid in a variety of different ways, sometimes paid salary |
| Usually free to work at home for more than one company at a time. | Some employers discourage their employees from working for more than company at a time, even when they work at home |
| Responsible for their own health insurance and other benefits | Some employers pay for some or all of health insurance costs (the trend is that employers are paying less and less of skyrocketing insurance premiums). |
| Work at home independently, often free to hire other people to work at home with them | Work at home as dictated by employer, usually not free to hire. |
| Usually involves less of an application process. | Usually involves a very rigorous application process and screening. |
| Employer usually requires an Independent Contractor Agreement. | Some employers have special contracts for their work at home and some don't. |
| Person who works at home often uses his/her own equipment and/or other assets to deliver service | Employer more likely to provide alot of material, including equipment. |
| Person who works at home may show profit or loss; may have risk. | Employees typically have less risk. |
Many people who are accustomed to having a traditional employee job and then become independent contractors find it an easy transition. Unless there is a compelling financial, tax or other reason, don't let being an independent contractor stop you from enjoying a fabulous work at home lifestyle. If you're considering a specific work at home job or home business opportunity and are wondering what financial impact that opportunity may have on you or your family specifically, please direct specific questions about the business relationship to that employer and/or consult a competent legal, accounting and/or tax professional to advise you concerning how various work at home employment situations may affect you or your family specifically in your situation.
Work at home financial considerations
Work at home and IRS Classifications of Employment
Work at home and characteristics that would suggest independent contractor relationship
Work at home classifications: Differences between contractor and employees
