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-> Household Management
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amother
OP
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 Thu, May 09 2024, 9:35 pm
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Is it better to do consulting contracting with a W-2 or a 1099. What are the pluses and minuses of each. This just came up for my husband and we're not sure. He's only ever been employed with a W-2 before. TIA
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amother
Daffodil
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Thu, May 09 2024, 9:41 pm
It isn't a "choice" as there are legal definitions for when you are an "independent contractor" versus being an employee.
Many employers prefer to hire people as IC because it saves money.
The disadvantage
You are responsible for employer share of FICA which is approximately 7.5%
You typically get no benefits which include PTO as well as health insurance
You are not eligible for unemployment when the job ends.
If you are not paid by the project, you are only paid when the employer wants you to work - if the office closed you don't get paid. Typically an employee gets PTO plus all Federal/state holidays.
There could possibly be some tax deductions but for the most part, you are better off as an employee unless you are really trying to start a business and this is a legitimate "client" AND you are being paid enough to compensate you for real cost in income because of your increased taxes and lack of benefits
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amother
Cinnamon
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Thu, May 09 2024, 9:47 pm
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In general a consultant is 1099. W2 is for an employee.
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amother
Navyblue
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Thu, May 09 2024, 10:01 pm
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This, if you are an outside contractor/consultant etc. you are a 1099. If there are other questions you need to consult an accountant / payroll specialist.
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