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1099 Pros: Can deduct expenses directly against income Cons: Higher risk of audit. No unemployment/workers' comp. You're paying the employer 1/2 of social security & medicare (AKA "self employment tax") plus any other city/county income taxes. W-2 Pros: Employer eats 1/2 social security/medicare. Can collect unemployment/workers comp if laid off/injured. Lower audit risk (warning: you need to document the crap out of your expenses and keep a copy of your employee manual - talk to a tax guy/gal about this). Cons: Your expenses are thrown onto a spot where they are basically lost (Schedule A, 2% limited, not deductible if standard deduction or in AMT). If you go 1099, form an LLC online (don't go that legal zoom crap, here in Oregon you can form it in around 10 minutes for the state fee of $100). Then get an EIN at irs.gov for free (again, in about 10 minutes). You then don't need to hand out your SSN to every jerk who asks for it, and you can elect down the road to be taxed as a different kind of tax entity (S or C Corp) very easily. DO NOT INCLUDE YOUR SPOUSE AS AN OWNER IF YOU DON'T LIVE IN A COMMUNITY PROPERTY STATE.
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Mar 14, 2017 00:08
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| # ¿ May 4, 2024 02:56 |
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