Re: W-2 vs 1099

Subject: Re: W-2 vs 1099
From: "Gene Kim-Eng" <techwr -at- genek -dot- com>
To: "R D" <jaguarjam -at- yahoo -dot- com>, <techwr-l -at- lists -dot- techwr-l -dot- com>
Date: Wed, 20 Feb 2008 10:23:52 -0800

----- Original Message -----
From: "R D" <jaguarjam -at- yahoo -dot- com>
> I just negotiated an hourly rate on W-2. The recruiter
> just called to notify me that the rate would be on a
> 1099. As far as I know, I would have to pay an
> additional 7.5% for SS taxes plus they get out of
> paying unemployment tax of 10 to 15%. Is there
> anything else I need to be aware of?

You'll be paying the self employment tax instead of
SS (equivalent to your SS + the part usually paid
by employers). There will be no unemployment
benefits when the job ends, and no workmens'
comp if you get injured on the job (unless you pay
into the programs yourself). Hopefully, you adjusted
your rate to suit.

The plusses are, half the self-employment tax and
anything you do pay into payroll-related costs is
deductible. As a self-employed person your
place of business is whatever you say it is (like
your house), and every time you step out the door,
start your car to go to the client's office, buy printer
cartridges, staples, big jars of peanut butter filled
pretzels to keep on your desk, etc., it's a deductible
business expense. If you've had your eye on any
computer upgrades or a TV for your home office,
now's the time, and for the duration of the job never
go out to eat or drink anything without saying
something to someone at the table about how your
work is going. If you have more than one credit
card, set one aside for work purposes and charge
everything you can so you have a record of every
expense. You can even look into setting aside part
of your house for an office or a vehicle for business
and deduct part of your costs for those and depreciate
their value, but that's probably more effort than it's
worth unless you work 1099 a lot.

Gene Kim-Eng

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W-2 vs 1099: From: R D

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