subject: Getting Started As An Independent Contractor: A Checklist For Construction Contractors [print this page] Maybe you are thinking of going out on your own as an independent contractor while keeping your full-time job, or maybe youve decided to take this route as a result of being laid off. Or maybe youve decided to switch careers. Either way its a big step, and careful planning is crucial to your success. This basic checklist can help you get started.
1. Determine what services you will offer. What type of contract work are you most skilled in? Set your goals. Do you desire a variety of work? Do you plan on getting additional training to acquire a new skill? How efficient are you with your new skills?
2. Set a budget. Take inventory of what tools and equipment you already own, and determine what will need to be purchased. Other expenses to include in your budget are: marketing, insurance premiums, taxes, travel, phone, computer software, office space, and your salary.
3. If you havent already, decide on a business name and business entity type. Check what your state requirements are and if you need to register your business. With many states, you can register your business name with the Secretary of State. Depending on your business structure, you may also need to create an Articles of Incorporation. Also be sure to check for any federal/state tax forms and/or tax ID numbers that you may be required to file or apply for. Consider consulting with an attorney and/or accountant for any possible legal and tax issues.
4. Obtain licenses. Check with your city or state to see if a business license is required. You may also need a vocational license, depending on your trade. If youre not sure what is required, ask your trade association or go to your state governments website to see if you need a particular license.
5. Pay Estimated Income and Self-Employment Taxes. You will be required to handle your own taxes. As your business grows, it may be a good idea to hire a tax professional. All independent contractors who make over $400 per year on business activities must report their business income to the IRS. This is done by paying estimated taxes in advance. You should also determine what business expenses may be deducted. Visit the IRS website at www.irs.gov for more information.
