From a tax perspective, being an independent contractor offers several advantages, although it also comes with added responsibilities. You likely won’t have to pay tax on all your income because you’ll be able to deduct business expenses using IRS Schedule C when you prepare your tax return. The resulting number after business deductions is what you’ll enter on your tax return as self-employed taxable income.
Be careful with your business deductions, however. The Internal Revenue Service says that business expenses must be both “ordinary and necessary” to be deductible.