Occasionally I hear from freelance writers who mistakenly think they’re employees. Some even list clients as employers on LinkedIn. I don’t think I’ve ever run into the reverse. In the United States, there’s a clear distinction between the two, and it’s important to know which you are.

If you’re an employee, you filled out a W-2 form for the IRS, and your employer deducts taxes from your paycheck. If you’re a contractor, you’re self-employed. You get a 1099 reporting your income, and normally the IRS collects the tax through estimated tax payments or with the 1040 in April. You get the privilege of paying double Social Security tax. On the positive side, you can deduct business expenses, perhaps even a home office.

What does being a contractor mean?

There’s a difference in the relationship, and that’s where you win as a contractor, but you often have to fight to maintain it. An employee has to do anything the employer wants, within the bounds of the job description and legality. A contractor agrees to do specific tasks for the client. As a contractor, you get to decide how to do it. The client can decide it’s satisfactory or not, but it’s the delivered work that counts, not how you did it.

You have to abide by all aspects of the agreement. Read any contract carefully before signing, and ask questions. It might include things like a prohibition on subcontracting or a confidentiality agreement. The freedom to do the job as you want has limits. But if you prefer to do the work at home in the middle of the night, you can.

Most of my contract experience has been with software development rather than writing blog posts and white papers. I could write a book about it. Maybe I should. Independent contractors routinely run into managers who go off on power trips, even though it hurts their own company. One manager wanted me to fill out an employee timesheet and threatened not to pay me if I didn’t. On another occasion, someone declared himself my supervisor. Once I got a check that was revoked after sending, even though I was owed the money.

One client tried to make me sign an agreement turning over all my thoughts to them. That’s common for employees, but if you’re self-employed and get something like that pushed at you, the right question is “How much extra are you paying me for that?” Putting a price tag on clients’ demands is often a winning strategy.

I learned how to push back. Usually I won. Occasionally I had to refuse a contract with ridiculous terms. A couple of times I had to go to court.

Being self-employed brings freedom, and freedom brings responsibilities. The first step is to know whether you’re self-employed or not. The next is an ongoing commitment to maintaining the proper relationship with your clients.