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Not sure if my terminology is correct but bear with me. I'm starting a new job next month, but will continue to do projects for my current employer on a freelance basis. We're working out an arrangement in which I bill the company for any days I do work, and get checks made out to "Minidust Consulting" (working title) at a regular interval (2 weeks or monthly). The terms are all sounding good to me, I just wonder if I'm technically supposed to form a business for this to go down properly. LLC? Sole Proprietorship? Since I'd be billing them instead of being an employee on the payroll, I assume there's some technical stuff I'll have to figure out (at least for when tax season rolls around). Thanks, knowledgeable goons.
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May 21, 2019 22:19
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| # ¿ May 16, 2024 10:51 |
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Thanks guys, I'll try and give more details for clarification. Old employer is probably shutting down soon (business was drying up), so yeah, this is just me getting the final trickle of their projects done in my off hours. There's only 4 full-time employees and the work is highly specialized, so hiring/training a replacement would be far more trouble than it's worth at this point. The old company (and by extension, this arrangement) could conceivably last through the year or indefinitely, if more business comes through than expected. Either way I don't plan on taking this "business" on the road or anything. What my current boss suggested was a daily rate derived from my current salary (i.e., [X/52]/5 ), increased by 15%. So I'd bill the company for that amount on any day I do work for them. So it seems like a pretty favorable arrangement for me, especially on days where the work amounts to just an hour or two. From skimming various articles on Legal Zoom and such, it sounds like I could just be a sole proprietorship under my own name, and the only major formality would be reporting the income by April (or perhaps 4x/year like someone mentioned?). As I understand it, sole proprietorship doesn't really entail any setup process, it's just kind of what you are if you're billing somebody for your services. If it turns out the LLC thing makes sense I could go that route, but since I'm basically just continuing a relationship with my employer of 15 years, I'm not really concerned about any litigation. Also I want to reiterate that this might only last for 2 months, as the status of the old company remains up in the air. I've been on a health plan through my spouse's job this whole time so that's a non-issue. Other benefits will all go through my new full-time job. Thanks again goons!
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May 22, 2019 15:16
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Is there any reason I couldn't start with a sole proprietorship and then just look into LLC/S-Corp/etc if it's still going on in six months or so?DaveSauce posted:Did you double check the numbers? Remember you're losing more than salary.... you're losing access to equipment, software, benefits, retirement, etc.... I know you said health insurance is taken care of, but there's a ton of other benefits that your employer provides that can be easily converted to a dollar figure.
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May 23, 2019 16:12
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Welp, so the boss got spooked after talking to his accountant and the plan is to just keep me as an employee with a custom schedule now. Same pricing arrangement, but handled through payroll so tax withholdings and all that will be taken care of. Sounds good to me; I'd prefer to have less to think about when starting the new job anyhow. Guess I'll be on payroll after all but thanks for the advice Goons!!
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May 24, 2019 18:23
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SpelledBackwards posted:Does the new job allow you to be doing this old job work on the side? Are they similar industries, and would it be seen as threatening the skill, knowledge, attention, and even competitive business that the new employer would expect you to devote to them? Yeah it's cool, the two jobs are in completely different industries. One could not remotely be considered a "competitor" of the other, and I've been very deliberate about not doing "old job" tasks in the 9-5 hours. But that was a good point to bring up, thank you. 
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Aug 6, 2019 20:19
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