Working as a contractor in IT
Does anyone have any experience working as a contractor in the IT field? I have 4 years of experience in the IT industry, all of it as a full time direct hire. I may have an opportunity to work for a very large company on a 2 year contract at fairly reasonable salary increase. The most important part to me is that I will be getting some experience off of the service desk as well, which I can use to continue my career going forward.
My main concern is that I am unfamiliar with contract work. I do know that I get health benefits / 401k / sick days, but I assume there must be a drawback to being a contractor, right? I feel like being a contractor is inherently more unstable than being an actual hire. The position I am being considered for is a 2 year contract, but I worry that the position could simply disappear a few months in and I'd be out of a job. Is this a fair feeling, and is there any way I can gauge how true this might be for my position? Is there something I could discreetly ask in my interview that might help me understand if this is a stable position?
If anyone has any experience as a contractor, I'd love to hear it.
If you get health benefits, 401k, sick days, a salary, are you really a contractor? It sounds like you'd be an actual employee, just on a short term basis. Although the real deciding factor is whether you get a 1099 form or a W2 form.
If you get a 1099, you're a contractor. Remember that you need to pay self-employment tax which is very possibly going to double the amount of tax you need to pay, so keep that in mind. Don't be dumb like I was. :)
Expanding on this answer regarding tax consequences: as a contractor you are responsible for remitting not only your own income taxes as they would have been deducted, but also your medicare and social security contributions, which will add an additional 15.3% (in 2019, anyway). As such, if you're a contractor and they want to pay you what they'd pay an employee, you're actually only getting paid 84.7% of what you'd otherwise get.