Why go independent?
Unlimited income potential
Earn more for doing the same work. Set your own bill rates without paying for company overhead.
Increased flexibility
Work as much or as little as you want based on your lifestyle preferences.
Be your own boss
Spend your time on the problems that interest you rather than office politics and climbing the corporate ladder.
Create a foundation for your business
Put the business structure in place to save you time, money and headaches later.
Form a company
A formal business entity can reduce personal liability and increase tax benefits.
The first step in starting any business is to ensure you have selected a legal entity structure that will protect and separate your personal assets from your business and provide the best tax structure to maximize business deductions. Most individuals should evaluate a Limited Liability Company or an S-Corporation and work with a registered tax accountant to ensure the right structure for their business.
After you have selected a name for your business, you should register your legal entity with the State of your business operation. Once you have secured your state business registration, you will need to obtain a federal employer identification number, or EIN, which is a nine-digit number the IRS assigns to businesses for tax filing and reporting purposes.
Register your Business Name Get an EINOpen a business bank account
Separating personal and business finances provides greater protection from IRS audits.
It is important to open a separate business banking account to separate your personal and business related transactions. To open up a business banking account, you will need your registration paperwork from your State filing and your EIN.
Compare Business AccountsObtain local permits and licenses
Many counties require a business to obtain local licenses to operate.
Many local counties require a business to obtain local business licenses to operate. Some licenses and permits expire after a set period of time. Keep close track of when you need to renew them — it's often easier to renew than it is to apply for a new one.
You'll have to research your own state, county, and city regulations. Industry requirements often vary by state. Visit your state's website to find out which permits and licenses you need.
Purchase business insurance
Many employers require you to carry liability insurance before starting work.
As an independent consultant, it is important to have Professional Liability Insurance or E&O coverage to protect against any potential legal issues that may arise with your business. In addition, some states may require you to have worker's compensation even as a single member in your company.
Typically employers hiring consultants through ConsultDirect require a minimum of $2M of Professional Liability Insurance coverage. We've partnered with a registered insurance broker to make it easy to purchase high quality coverage without signing expensive annual contracts.
Purchase Liability InsuranceSelect a healthcare plan
Ensure you have the coverage you and your family need.
As an independent consultant, the ability to obtain health insurance coverage is important and there are different options available for individuals.
Get a QuoteVirginia Residents
A new law in Virginia (SB 672) requires insurance carriers to offer group health plans to self-employed individuals. SB 672 became effective July 1, 2018.
Sole proprietors, single member LLCs, partnerships, or corporations — with no partners and no employees who work full time in your business are eligible for group health plans. You must have filed a tax return for the previous tax year.
Enroll in a tax-advantaged retirement plan
As long as you have some earnings, you have some tax-advantaged saving options.
Independent contractors are able to open their own SEP-IRA or Solo 401(k) to lower their income tax burden while also saving for retirement.
We’ve partnered with First National Corporation, a Registered Investment Advisor, to provide an avenue for easily opening and managing your retirement plan.
Enroll in a Retirement PlanReady to find your first project?
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