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Do You Really Want to Be a 1099 Independent Contractor? Pros and Cons

Quitting regular employment and being your own boss can indeed be a dream come true. However, you’ll also have some new hassles to deal with and you’ll need to bring on an online bookkeeping team like Xendoo.

Only you can decide if the trade-off is worth it.

Pro: Being Independent

There’ll be nobody telling you what to do, how or when to do it (except, to some extent, your clients). No more punching a time clock, or using an outdated, ineffective process “because that’s how we’ve always done it.”

Con: Being Independent

It also means you’d better be good at self-discipline, or else pretty soon you’ll find that no work is getting done and no money coming in.

Pro: Getting Paid What You’re Worth

Many professionals decide to go solo when they realize their employer is charging its clients double or triple what they’re paying the employee to provide that service. Why not work directly with those clients and earn the big bucks?

Con: Getting Paid, Period

As an employee, you’re guaranteed a regular income. That won’t happen when you’re freelancing. It almost seems to be a rule that you’ll have either feast or famine: periods where you’re slammed with work, and others with no work at all. If possible, have a cushion of six months living expenses in the bank to tide you over the lean times.

Also, as a sole provider, you’ll run into clients who can’t or won’t pay you — and don’t try very hard because they think they can get away with it. So it’s a very good idea to always get a contract. And be prepared to make some collections efforts as part of your billing process.

Pro: Lots of Tax Deductions

From home office maintenance to equipment depreciation to travel, there are literally dozens of tax deductions you can use to reduce your income tax. You’ll probably pay less tax now than you did as an employee when you go to file your tax return.

Con: Buying Your Own Equipment

Of course, the reason you’re getting those deductions is that you own those assets. When you work for someone else, they buy all that. Depending on your industry, you may face some hefty start-up costs.

Con: More Administrative Work

Some people enjoy having control over business functions that they didn’t as an employee — such as sales, accounting, and growth planning. Others hate spending time on anything that’s not their specialty. Most fall somewhere in the middle, knowing that there will always be some boring or unpleasant aspects to any job.

Con: No Benefits

Employees enjoy a variety of benefits from their employer, such as lower-cost group health insurance, unemployment insurance, workers’ compensation, and 50% payment of Medicare and Social Security taxes (which will now be 100% your responsibility). In addition, they have more protection from federal and state labor laws.

This list shows more cons than pros to being an independent contractor. However, the vast majority of freelancers are happy with their decision and have no interest in going back to work for someone else. After all, there’s a reason why more than a third of all U.S. workers are now part of the “gig economy.”

If you really want to do it, you can! And Xendoo will be here to help with accounting, bookkeeping, and tax issues you may not be familiar with. We specialize in small businesses, and we love helping them grow.


This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.


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