Want to become self-employed and be your own boss? You're not alone. There are currently 14.7 million self-employed Americans, according to the Labor Department.
Whether you recently lost your job or you are just tired of working for someone else, the idea of becoming self-employed is often an exciting yet scary prospect.
As an employee, you may have the comfort of a daily routine, health and retirement benefits, and a steady paycheck. But you also may also have a disagreeable boss, minimal control over your pay and a daily commute that commonly resembles NASCAR.
While it may seem risky right now to venture out on your own, there are many benefits that make 'being your own boss' hard to beat.
Here are five reasons why you should join the 14.7 million Americans who have already made the move to self-employment.
#1 -- Set Your Own Schedule
According to the U.S. Census Bureau, Americans spend more than 100 hours a year commuting to work. Over a 40-year career, that amounts to more than five and a half months of time in your car. Recent research has suggested long commutes contribute to obesity, neck pain, loneliness, divorce, stress and insomnia.
Imagine life without a commute, where you can adjust your work to your life -- choose the hours and days you work and when you take off -- and completely avoid rush hour. If you can work from home, you can avoid commuting all together.
As a self-employed worker, you never have to jump through any administrative hoops to take your vacation time. In fact, with today's technology, you can work from a remote beach in the Caribbean or a cabin in the woods.
#2 -- Be Your Own Boss
Being self-employed means creating your own rules.
#3 -- Take Advantage of Self-Employed Tax Benefits
Because self-employed individuals must pay 13.3% of their income towards Medicare and Social Security instead of 7.65% that business-employed individuals have to pay, several tax breaks are offered by the IRS to encourage continued entrepreneurship. Namely, deductions galore.
The IRS allows you to deduct certain business-related expenses from your revenue, including home office costs, health insurance premiums, meals and entertainment, internet and phone costs, payroll taxes, transportation expenses and interest on business loans and credit cards. For more specific details on deductions and to find ways to lower your taxes as an entrepreneur, contact a tax attorney and/or use an accountant at tax time.
[Be careful: You do not want to end up on the wrong end of an IRS audit. To learn more, read 6 Ways to Avoid an IRS Audit.]
#4 -- Keep the Money You Earn
As a self-employed worker, you can earn more money simply by increasing your own output.
Putting in overtime to finish a project means you will actually get paid for it, rather than just winning brownie points with the boss. Eliminate the middle man and your earning potential increases.
This can be a scary prospect in the beginning because if you don't have the discipline to work hard, you won’t make any money.
However, there is potential for greater growth and earning because the more you work, the more you can make, which isn't always true when you work for someone else.
#5 -- Enjoy a Career of Creative Freedom
Are you passionate about something outside of your current line of work? Self-employment gives you the creative freedom to strike out independently in your current field, or to make the career change you've been dreaming about for years.
This can be especially appealing to workers in the later stages of their careers. In fact, there are several great websites made especially for workers making a big life change toward the end of their working years.
[InvestingAnswers Feature: 13 Best Job Sites for Baby Boomers]
The Investing Answer: Tax breaks, creative freedom and being your own boss make being self-employed attractive to millions of Americans. If you work hard and successfully turn a great idea or skill into a lucrative business venture, the end result can be deeply satisfying.
Self-employment is not for everyone, but if you are willing to take risks and responsibilities, it is one of the most strategic ways to take control of your own time and earning potential.