Consultant vs. Independent Contractor?

[Bonzi]

What are the positives and negatives of each?

Which is "easier" to start up with less liability?

 

[Iceweasel]

Not much to go on there. How are they different? Both sound self employed, the contractor sure is. You'd likely need a license for the later, you need to check your state laws.

 

[Pogo]

It isn't necessarily something you 'start up' unless you're talking about a legal tax status.

A lot of employers get around tax regs by hiring "temporary" labor -- by the week, or the month, whatever, without defining them as "employees". They pay that temp labor a lump sum, with no tax withholding -- which might be a nice chunk of change in the short term, but at the end of the year that labor gets a 1099 form (instead of a W-2) which becomes a major headache unless you really like filling out obtuse tax forms, and where you literally have to tax yourself.

Actually you're expected to send the IRS "estimated" tax four times a year if you do this regularly, although that, in typical IRS "wisdom", expects you to actually predict the future in order to estimate it.

I worked this way for about 30 years. When I did I would use the term "independent contractor", "consultant" or "freelancer" interchangeably, though I never actually founded my own company. It has its benefits and drawbacks. Biggest benefit is, by definition your job has a finite end, which not only frees you from the insufferable chains of Monday-Friday 9-to-5 Routine Hell, but gives you a finite end to the task with a sense of accomplishment at the finish line. The taxes are no picnic though.

 

[MarathonMike]

Your post is a bit confusing. An independent contractor typically works under a 1099 tax form. Consultants may or may not depending on the contract they engage in with the company they are consulting for. A third option is working for a company like Volt or SAIC that "contracts with" companies but you would be a W2 employee of Volt or SAIC.
Companies are usually reluctant to hire 1099s because it opens up litigation possibilities for them.

 

[Iceweasel]

The W2 would be an employee and they have to take out half of your social security obligation. Self employed is 100% of course.

 

[Pogo]

Companies are usually reluctant to hire 1099s because it opens up litigation possibilities for them.

It certainly never slowed me down. I can think of maybe one company I worked with -- out of 40 to 50 -- that went the W-2 route in preference to the 1099, all in the same industry.

 

[saveliberty]

Not enough information.