The new US tax law signed into effect in December contains a great benefit for contractors: sole proprietors will now be able to deduct 20% of their revenue from their taxable income. According to some estimates, the tax savings from the new law could be up to $15,000 for some couples. As the “gig economy” continues to grow, this added enticement may tempt more professionals to strike out on their own this year.
Favorable tax treatment isn’t the only upside to contract work. For many professionals, contract work offers significant lifestyle and career advantages over permanent work. Here are four other benefits you might not have considered:
You can maintain control over your schedule
When you work as a contractor, you’re not locked into a permanent, year-round gig with a set number of vacation days. As a contractor, if you only want to work a few days a week, or need to take a month off between jobs, you can do that. You have control over your schedule, giving you the flexibility to pursue other commitments, hobbies, or passions on the side while still earning a living.
You can test out the waters at a new company before committing
You can never really know what it’s like to work at a new company from the outside. Anytime you sign onto a new permanent job, you’re taking a leap of faith. But when you sign on as a contractor, you have the chance to “try before you buy”. With contract-to-hire placements, you have a few months to get to know your coworkers and observe first hand how the company is run with the option – but not the obligation – to join on a permanent basis if everything goes well.
You don’t have to give up your benefits
Many candidates I meet worry that working as a contractor means giving up important benefits, like health insurance. If you work through a contract staffing agency, you may still have access to certain benefits plans. At Lucas Group, for example, we offer our contract professionals the opportunity to participate in our group healthcare policy. You can enjoy the freedom and flexibility of contract work without giving up the security of health insurance.
You can gain a wide range of experience
A permanent employee might stay on the same team for a year or longer, but a contractor can gain experience at multiple companies in different industries in a short period of time. I’ve had clients request contractors for this very reason. They truly value contractors who have a broad range of experience under their belt.