Contract vs Full-Time Employment - what the IRS wants you to know, how to decide which is better for you and who to get help from when you decide contracting is the way to go...
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14. Contract
1099
Overview
You:
Pay the income taxes
Manage the tax withholding
Estimate tax withholding amounts
Make the tax withholding
payments
Salary payment initiated by invoice
15. Contract
W2
Overview
You still pay the taxes!
The company:
Manages tax withholding
Tax payments to the IRS
Salary payment requests are done
internally with email, spreadsheets
or payroll access
It is mostly on them
20. When
to
Incorporate
1. Allowable expenses net a lower
income tax rate
2. Expense a force multiplier tool or
service
3. You expect to hire other people
as contract assets
4. You amass assets to control but
not own
25. Why
Do
Contracts
More control over your income earnings
More control on tax strategy
You decide how much tax you pre-pay
SEP-IRAs or Keogh Plans for retirement
34. Choosing
aTax
Return
Preparer
They have a Preparer Tax Identification
Number (PTIN)
Ask about their continuing education
Check the Better Business Bureau
CheckYelp!
Discuss their fee structure
Check for disclaimers on their fee-refund policy
Ask about exclusions on their fee-refund policy
Verify they will represent your case to the IRS
36. Enrolled
Agents –
This
Speakers
Preferred
Expert
America's Tax Experts.
The only federally licensed tax practitioners
They have unlimited rights to represent
taxpayers before the IRS
http://www.naea.org for more information
Typically former IRS agents
Represent you in court with full rights and
privileges
37. CONCLUSIONS It’s better to work than not.
If full-time is available – take it.
ContractW2 is the same tax
headacheas being full-time.
1099 is time sensitive to filing
Do not like 1099? Ask: “Can we
make this contractW2”?