Guest guest Posted April 1, 2004 Report Share Posted April 1, 2004 We payed a 7% " bonus " this year near tax time. We are considering switching to the w-2 route for this year because the paper work is really simpler assuming you use something like Quicken and their Quickpayroll service. The w-2 route is also pretty bullet-proof as far as an audit is concerned. My guess is a lot of folks may start out on the consultant route because that first year is sort of panic-ridden getting the program going and all that. People also expect to get paid slightly less when hired as an actual employee. It really works out about the same either way--the feds get about the same amount of money either way also. Bart [ ] 1099s versus W-2s When you do a 1099, the " consultant " is responsible for paying all their taxes from what is reported on the 1099 (social security, self- employment tax, income tax, etc.) and they are supposed to be independent contractors (i.e. you have NO say in specifically HOW or WHEN they get the job done - no direct directions/supervision...also they are responsible for any occupational licenses, etc. needed to operate as an independent contractor). When a person has a W-2 the EMPLOYER (you) has a say in how and when the job gets done (as is the case with most behavior techs) and the EMPLOYER PAYS additional taxes (i.e. unemployment, etc.) and has additional filing requirments (regular depositing of withholding for state and federal taxes owed, etc.). It will ultimately cost more to have a person a W-2 employee than a 1099 consultant, because with an employer/employee - W-2 relationship, there are more taxes that apply. Hope this info helps. List moderators: Jenn - ABAqueen1@... Steph - Stephhulshof@... Post message: Subscribe: -subscribe Unsubscribe: -unsubscribe ---------------------------------------------------------------------------- ---- Quote Link to comment Share on other sites More sharing options...
Guest guest Posted April 1, 2004 Report Share Posted April 1, 2004 From the deep recesses of my faded memory (LOL!) The IRS has a standard questionaire (about 21 questions IIRC) to see if a person really qualifies for " 1099 " Independent Contractor status. Hope this helps. Regards, Sharafanowich, Devon's Dad & Secretary, SEPTA NETWORK www.septanetwork.org ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ -- " Bart Hickman " <bart_hickman@...> wrote: We payed a 7% " bonus " this year near tax time. We are considering switching to the w-2 route for this year because the paper work is really simpler assuming you use something like Quicken and their Quickpayroll service. The w-2 route is also pretty bullet-proof as far as an audit is concerned. My guess is a lot of folks may start out on the consultant route because that first year is sort of panic-ridden getting the program going and all that. People also expect to get paid slightly less when hired as an actual employee. It really works out about the same either way--the feds get about the same amount of money either way also. Bart [ ] 1099s versus W-2s When you do a 1099, the " consultant " is responsible for paying all their taxes from what is reported on the 1099 (social security, self- employment tax, income tax, etc.) and they are supposed to be independent contractors (i.e. you have NO say in specifically HOW or WHEN they get the job done - no direct directions/supervision...also they are responsible for any occupational licenses, etc. needed to operate as an independent contractor). When a person has a W-2 the EMPLOYER (you) has a say in how and when the job gets done (as is the case with most behavior techs) and the EMPLOYER PAYS additional taxes (i.e. unemployment, etc.) and has additional filing requirments (regular depositing of withholding for state and federal taxes owed, etc.). It will ultimately cost more to have a person a W-2 employee than a 1099 consultant, because with an employer/employee - W-2 relationship, there are more taxes that apply. Hope this info helps. List moderators: Jenn - ABAqueen1@... Steph - Stephhulshof@... Post message: Subscribe: -subscribe Unsubscribe: -unsubscribe ---------------------------------------------------------------------------- ---- Quote Link to comment Share on other sites More sharing options...
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