Technology has drastically changed the corporate landscape, allowing workers to work in an almost unprecedented number of ways. From entrepreneurs and home-based businesses to freelancers and consultants, there are more ways than ever to earn a living. With all of these new titles and positions, however, understanding the differences can be challenging. Here is an overview of the differences between a freelancer and a consultant.
A consultant can be a freelancer, but consulting is only one of the many ways to be a freelancer. In some cases, a freelancer may actually work as a contract employee for a single company for many years. In other cases, a freelancer may work with one company for several months before moving to another or work for several different companies in a single month. The main difference between a freelancer and a regular employee is their tax status.
Freelance workers are classified as independent contractors and receive a 1099 at the end of the year rather than a W-2. As such, no taxes are taken out of their paycheck or they may simply be paid a flat fee for their work. At the end of the year, freelancers are required to file (and pay) their own taxes. There is also no limit to the types of jobs a freelancer can hold, from dog walking to graphic design to accounting and more.
A consultant is a person who has a certain amount of expertise to offer in a specific area. Consultants are often freelancers, but they can also own or run their own businesses. In some cases, a consultant may actually work for another business or even a large consulting firm, in which case they are no longer freelancers. Consultants are available for a wide range of needs.
Business consultants can help streamline organizations or help them reach peak efficiency. Political consultants may help potential candidates understand how likely they are to be elected or how to develop a good strategy for getting elected. Movie consultants help make sure what happens on the screen is as realistic as possible, while security consultants help to design or determine vulnerabilities in a security system. Personal consultants may help you organize your home, get ahead in business or even be a better parent.