Advice from your friends at the IRS

The IRS provides detailed guidance for Independent Consultants in order to ensure they keep their tax status as Independent Contractors. While some of the paperwork is more complex, there are tax advantages to Independence, including the ability to fully deduct more business expenses. Publication 1779 provides some simple guidelines to help sort Independent Contractors from employees.

And the survey says...

M Squared has released their annual survey of indepentent consultants, and it paints a positive picture. Demand for consultants is growing, along with consultant's revenue, and acceptance of consulting as part of the normal way of doing business. They noted demand especially in the financial services, professional services and healthcare sectors.

M Squared is located in California, which resulted in 55% of their respondents being from CA. Sitting here in the New York Metro area, the highlights ring true.

Could French youth handle being Independent?

If the emotional reaction of French youth to the proposed change in French labor law is any indication, I can't see Independent Consultancy taking off in France. Quotes like this are telling:

"I risk working for two years for nothing, just to be fired at any moment...That's depressing, that's why I'm crying."

Basically, the law change proposes that young workers can be fired by large employers, early in their careers. The current law, it seems, prohibits firing, and has led employers to just not hire young people, and the huge unemployment rate reflects that.

Independence

I started out as an Independent Consultant in late 1998. My career to that point was a slow progression up the Business Analyst - Project Manager food chain. The money was ok, but the politics were stifling. I needed to do something different.

Like so many things in life, my decision was largely driven by supply and demand. 1998 saw a confluence of the dot.com craze, the Y2K semi panic, and a general push by big companies to upgrade business systems. Companies also wanted to have more flexibility with respect to staffing (English Translation - they want to be able to fire you when they're done with you, and not get sued) . Consulting/Contracting was hot, Business Analyst / Project Manager types were in demand, and I was lucky enough to have a good friend looking out for me who referred me to my first gig. Thanks Ken!

Since then I've worked for plenty of clients, had some ups, some downs, and continue to learn a heck of a lot. One thing, I think, needs clarification. This whole notion of "Independence". No consultant is actually independent. We depend as much on our clients as we did on our bosses back in the day - maybe more. We depend on colleagues, headhunters, friends, family, and the kindness of strangers. We are self-dependent with respect to benefits and retirement planning, but Independence is a state of mind, not a contractual arrangement. In hindsight, I was working with Independence in mind for several years before I decided to fly solo. And I'm glad I did.