On 08/30/2013 08:22 AM, Edward Ned Harvey (blu) wrote:
From: Martin Owens [mailto:[email protected]]
Sent: Thursday, August 29, 2013 1:37 PM
On Thu, 2013-08-29 at 11:45 -0400, [email protected] wrote:
Don't go W2! If you are an independent contractor, W2 defeats your tax
advantages. A W2 means you are an employee.
Can you explain to the lay person what tax advantages you're talking
about?
There's definitely no tax advantage. There is a liability advantage.
If you're an employee of a company, then they have to pay FICA, and you have to pay
FICA (social security & medicare withholdings from your paycheck). They have
to provide unemployment and worker's comp insurance. And as an employee of them,
anything you do on behalf of the company can be held against them.
If you're a contractor, you create an LLC, you establish a business
relationship between your LLC and the client. You are an employee of the LLC.
(But you don't pay yourself a salary. Ask your accountant.) You're required
to carry workers' comp and unemployment (but this is a frequently violated
law). Instead of paying FICA, you pay Self Employment tax, which is generally
about the same as paying FICA.
And if you are a 1099 without a corp or LLC you can be sued. But, even
with your own LLC, your company can be sued. One of the companies I
worked for as a 1099, billing was a real pain. The problem was not that
they didn't pay their bills, but my boss didn't submit them to accounts
payable. That company was l;ater bought by Compaq, and what was left of
that company ended up in my group at Compaq.
--
Jerry Feldman <[email protected]>
Boston Linux and Unix
PGP key id:3BC1EB90
PGP Key fingerprint: 49E2 C52A FC5A A31F 8D66 C0AF 7CEA 30FC 3BC1 EB90
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