Financial Facts about Medical Transcription as an Independent Contractor
You may have heard that working as an IC is essentially trading income for flexibility: In exchange for gaining control of your schedule, you have to be willing to take a financial beating. That can happen, but it’s not a given.
Here are some of the benefits of working as an IC:
You have more control over your work schedule. You can leave in the middle of the afternoon to run errands or meet a friend for coffee. You can work late at night instead of 9 to 5 if you prefer.
You can take tax deductions for business-related expenses, like your computer, a second phone line used just for business purposes, and more.
You have more control over how much work you do and how much you earn. You don’t have to work 40 hours a week if you don’t want to. And if you want to work more than 40 hours a week and have the work coming in to keep you busy, nothing is stopping you!
You may be able to get insurance companies to issue you a health insurance policy even if you have a preexisting condition.
On the other hand, here are some of the drawbacks of being an IC:
You spend more time dealing with paperwork and managing tax matters than you do when you’re an employee.
You have to pay taxes that an employer would pay on your behalf.
You may not have a steady income, and even if you have steady work with regular clients, you don’t have the same sense of security that you do when you’re employed (although, especially in a tough economy, employees’ sense of job security may be false).
You don’t have access to benefits partially or wholly funded by your employer, such as health or disability insurance and paid time off. This may not matter to you very much if you have another source, such as your spouse’s employer. Part-time time employees rarely receive these benefits anyway, and many smaller medical transcriptionist employers offer on minimal or no benefits to anyone.
Don’t get too tied up in knots over the decision. If you go IC and you don’t like the results, you can always switch to an employee position later.