Forums: Discussions for entrepreneurs and small business.

I have some terminology and definitions:

Independent Consultant - Someone who owns their own business and payments they recieve are recorded as an expense on the clients books.

Employee - Someone who works for a company and receives a W2 at the end of the year.

I've been seeing people who work as a temp employee and get a W2 refer to themselves as independent consultant. They are any employee not an independent consultant.

I'm an actual independent consultant and am wondering if I need to change my terminology. Has the true independent consultant taken on a new title?

Interesting,

I have been an independent consultant as well, but it all depends on your contract, and even though I had to be under so called employment category a few times for company liability reasons, I was not full time, it was a short term employment like contract, so the terms of independent consultant are blurred at best. 

You can call yourself anything you want, but if you want some contracts, you will have to go under company liability which means technically you are employed.  Many companies cannot hire people as 1099 independent business people for this reason, so it varies on industry as I have found.  Of course, you can always deny work if you don't like being on W-2.

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I don't understand what you mean by "for company liability reasons"?

If someone operates a separate legal entity (true independent conslutant) they do not receive a 1099. Also, any liability concerns are that of the entity.

Hi RichSun,

Try the links below.  They should answer your questions.

http://management.about.com/cs/adminaccounting/a/ICtaxes062397.htm

http://www.tenonline.org/sref/pdf/ap10.pdf

http://smallbusiness.dnb.com/human-resources/workforce-management-hiring-consulting/2710-1.html

Thx.

Someone running a Corporation or Separate Entity LLC is not subject to the W2 stuff.

Cool, I wonder why people working on a W2 for a temp agency think they're independents? There is no doublt they're employees, not independent contractors.

I don't understood your definition and want to know what you want to describe.......

Hi again,

One final thought.  Just because a person claims to be an independent consultant, does not make them an independent consultant.  I worked with a woman who had her own computer consultant business.  But, during slow times she works for a temp service as a consultant.  She was an employee of that firm as long as she was working through the temp firm.

Interesting.

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