One of the things I “miss” most about freelance is cutting giant checks to the IRS every quarter. That being said going freelance means you can deduct all kind

One of the things I “miss” most about freelance is cutting giant checks to the IRS every quarter. That being said going freelance means you can deduct all kinds of crazy stuff to bring down your income like your cell phone, internet, a portion of your housing costs for home office, electricity, meals & entertainment, computer hardware, car, etc. You also get to setup an SEP IRA which lets you divert substantially more pre-tax cash into retirement than you could with IRA’s and 401k’s offered by a W2 shop. One key thing to remember is W2 employers pay a bunch more payroll taxes “behind the scenes”. As a 1099 you get exposed to them directly. In addition you get exposed to state / municipal business taxes as well. Thus, you need to factor all that into your bill rate. In the end, I think the taxes can work out much better for those self-employed. It just requires some planning and help from your accountant.