Contracting Rates

Subject: Contracting Rates
From: Barry West <Barry_West -dot- S2K -at- S2KEXT -dot- S2K -dot- COM>
Date: Fri, 28 Apr 1995 12:49:32 EDT

>I'm no tax expert, but I believe that if you go through an agency, you
>do not pay the 7% self employment tax (employers portion of SS -- as
>you are your own employer). Going through an agency, you are "1040",
>employed by the agency, which takes out witholding. You don't pay the
>added 7% SS tax, but you also can't deduct as business expenses
>staples, paperclips and the cost of a new computer. Going in on your
>own, you pay the 7%, and can deduct business espenses.

Only if you are a W-2 employee, which isn't necessarily going to be the case.
Most Technical Writing companies I have worked for hired me as a 1099
contractor. Most employment agencies or temp services go the W-2 route. If you
are a 1099 contractor, however, you are responsible for the entire 15% tax,
just as you are if you operated on your own. Either way, you are going to
encounter additional costs or command a lower rate because of agency overhead.
That was my point.

Barry_West.S2K @ s2kext.s2k.com @ INTERNET


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