The Motley Fool provides some advantages and drawbacks to being self-employed. If you are considering being self-employed, you should read the entire article. Some of the advantages are:
- Potential for higher income — According to recent data, the average freelance worker makes 45% more than an employee ($68,000 versus $46,800). The income potential for self-employment is virtually unlimited — a disproportionate number of self-made millionaires (and billionaires) chose to work for themselves.
- More likely to enjoy your work — Since you’ll be your own boss, you get to decide which projects to accept and which ones to pass on. In other words, you’ll likely be doing work you enjoy.
- Good tax benefits — There are some great tax benefits for self-employed individuals. For starters, self-employed individuals can open their own 401(k) and contribute up to $18,000plus 25% of what they make, as well as an additional $6,000 if they’re over 50. They can also write off all business expenses, whereas employed taxpayers can only deduct expenses that are more than 2% of income. Those who work from home get additional tax benefits, such as the home office deduction, which allows for a deduction of home expenses (rent, mortgage interest, insurance, utilities) proportional to the size of the office.
- Flexible hours, location, and working conditions — If self-employed individuals want a day off, or a long lunch break, they can choose to take one. In fact, only 29% of freelance workers report working more than 40 hours per week. Self-employment also entitles you to choose where you work and the conditions you keep. Want an office with a window? Go get one.
Read the full story at Is Self-Employment Right for You?
