The Pros and Cons of Self-employment

assistant-18993_640Earlier this week, we took a look at the pros and cons of having a work from home job. Thought-provoking stuff, no? Today we’re going to discuss – you guessed it – the pros and cons of being self-employed. Let’s get started, shall we?


  • You are your own boss. And who would make a better boss than you? You get to choose when and where you work (as long as you’re meeting the client’s needs), and if you don’t want to take on a project for any reason, you don’t have to. It’s a great feeling to have all that freedom!
  • The sky’s the limit. When you’re self-employed, you have the ultimate say in your income potential. You decide how much you’ll charge for products or services, and you decide how much work you’ll put into your business. If you’re motivated, talented, and creative enough, you can go from making a few bucks on the side to owning a large business that employs others. (Of course, if you want to keep it small, that’s fine as well!)
  • You can deduct work-related expenses from your income to lower your tax liability. Taxes are a major concern for those considering self-employment, and rightly so. But take comfort in the fact that you can deduct business expenses from your income before you figure up your tax bill. Depending on your trade, that could include computers, software, cell phone bills, mileage on your vehicle and much more. Even items designated for both business and personal use could entitle you to a partial deduction. See your tax advisor for more details.


  • You have to stay motivated. When you are your own boss, it’s easy to take a day off here and a week off there. But if you want to earn a living and grow your business, you’ll have to commit to working on the regular. Even if you don’t have any projects to work on, you’ll need to spend time promoting your business and taking care of all of the behind-the-scenes stuff.
  • There will be lean times. Despite your best efforts, there will likely be times when work is slow. It could be due to weather, local events, a poor economy, or any number of factors that are out of your control. You’ll have to put away money when it’s flowing in to offset the times when it’s not.
  • Your taxes get pretty complicated. You are responsible for keeping records of your income and expenses for tax purposes, and for paying both the employer and employee portions of state and federal income tax. If you’re brave, it’s possible to prepare your own tax return, but if you want to pay as little as possible while remaining on the good side of the IRS, it’s wise to enlist the services of a tax professional.

Did I miss anything? Let me know in the comments!

The Pros and Cons of Work at Home Jobs

computer-820281_640In my last post, I briefly discussed the difference between a work at home job and self-employment. Perhaps that post left you hungry for more information. If so, you’re in luck! Today we’ll take a look at the pros and cons of a work at home job.


  • You have the structure that comes with being an employee. Some people who want to work at home hesitate because they think they will have trouble staying motivated. But even though you don’t have a supervisor physically present, you will still be held accountable for doing your work. You will likely have designated working hours and some means of recording them, and in most cases you will have to report to management regularly in some fashion. These factors can help keep you motivated and earning money.
  • You have some amount of stability. Independent contractors must take responsibility for finding work. If they don’t find work, they don’t make any money. As an employee, you will be paid for the hours you work. Also, most states have laws that offer some degree of protection from being terminated unfairly. And if you do lose your job through no fault of your own, you may be eligible for unemployment pay.
  • There usually aren’t any out-of-pocket costs. Independent contractors are responsible for supplying their own equipment. As an employee, you probably won’t have to. Most employers will either provide you with what you need to do the job or reimburse the costs of your equipment. And you should never have to pay an upfront fee just to start working – that is a red flag of many work at home scams.
  • Your taxes will be relatively simple. Employers are required by law to withhold taxes on their employees and send them a W2 form at the end of each year. Using the information from that form, you can prepare your taxes fairly easily. There’s no need to keep your own records of income, and in most cases you won’t have any expenses to worry about. (As always, consult a tax professional if you have any questions!)


  • Competition for work at home jobs is intense. More and more people are becoming interested in working from home now that they know it is a viable option. A growing number of companies are offering work at home positions, but the demand for such jobs is far greater than the supply. Add to that the fact that most such jobs do not require applicants to be in a specific geographical area, and you can see why it’s not always easy finding a job you can do from home.
  • Your earnings may be limited. Independent contractors set their own prices, and the harder they work, the more they can make. As an employee, you will most likely be paid by the hour. And since your employer sets the number of hours you work, that limits your income. The exception to this rule is the occasional sales position that pays commission, allowing workers to be rewarded for good performance.
  • You probably won’t be setting your own hours. One of the most popular perks of being self-employed is getting to set your own hours. Most employees do not have that luxury. The majority of companies require their workers to commit to a schedule that provides the maximum benefit to the company. That may mean working late nights, early mornings, weekends, and/or holidays.

As you might have guessed, my next post will address the pros and cons of being self-employed. Look for it in a couple days!

Work at Home Jobs vs. Self-employment


When it comes to working from home, you have two basic options: You can get a job as an employee of a person or company, or you can become self-employed. It’s important to know the difference between these two paths, because which one you choose can affect things like your income, your taxes and your overall satisfaction with working from home. Here’s some information on each of these options.

Work at Home Jobs

A work at home job is simply a “regular” job where you’re able to work from home instead of commuting to the employer’s location. You’re paid by the hour, and in most cases you must work the schedule that your employer gives you. The employer takes out taxes and provides a W2 at the end of the year showing how much you made and how much you paid in taxes.

If you have a full-time work from home job, your employer will be required to abide by state and federal laws regarding your employment. That means that the company may have to offer health insurance and pay overtime pay if you work more than 40 hours a week. (Check with the department of labor in the company’s home state for details.) You may also be entitled to other benefits such as paid time off, retirement savings plans and life insurance.


When you’re self-employed, you are your own boss. You provide services to clients and bill them on your own terms. You’re responsible for providing your own equipment, finding work, and deciding how and when it is performed. Depending on the type of service you offer, you may be able to work wherever you like or need to travel to the client’s location.

The self-employed are responsible for keeping up with their earnings and taking care of their own taxes. They must pay both the employee’s and the employer’s portions of federal and state income taxes out of their earnings. If you’re self-employed full-time, you’ll probably need to pay taxes quarterly to avoid having a huge tax bill and penalties at the end of the year. This is where a tax professional comes in handy!

So Which One is Right for Me?

Good question! Posts on the pros and cons of working from home and being self-employed to come.