I will be accepting a part-time job soon-is it better to be paid as an employee or independent contractor?
I have recently begun my own business as a freelance designer, but I will soon be accepting a part time job from another company to supplement my income while I try to grow my business. I will not be receiving any benefits, just an hourly wage. Would it be more advantageous to be paid as an independent contractor or an employee? What would the advantages be (taxes, etc...) of one over the other?
Careers & Employment - 9 Answers
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1 :
contractor
2 :
employee...at the end of you the year when you file taxes you won't have to pay anything or little at all...as in independent contractor you are responsible for tax payments to the government.
3 :
If you have business expenses, you can take them off on your taxes if your a contractor.
4 :
If all work related expenses are going to be paid fro myour employer and you'll be working at his locatiopn all the time you cna't be an independent distributor, but even if you can it'd be more worth it then to be considered an employee so he has to do most of the accounting work. If you're paying for most of the working costs out of your own pocket, make sure you are considered an independent distributor so you cna write it off on your taxes versus letting the employer get that right. If you're looking for an indipendent distributor oppurtunity check this website out, oits pretty good. https://www.youngliving.org/Gramora Hope this helps.
5 :
as a contractor, the company will not withhold any taxes or social security. you will be responsible to pay it, either quarterly or at the end of the year. if you are disciplined to set aside the tax portion for year-end, then go as a contractor. if not, let the company do the payroll for you and be an employee.
6 :
Hmmm It has been my experience that when you are a contractor, your pay is usually on a net 30 (aka, the accounting department is not in a rush to pay you in a timely manner). If you are an employee you know that your check will follow a regular pattern.
7 :
As a contractor. You may have to pay self-employment taxes, but you will be able to write off a lot of your income due to the expenses incurred by your business. Check with a tax preparer or CPA, because the tax laws are constantly changing.
8 :
A contractor gets all the money, whereas an employee gets whats left after the fed takes out money for insurance & health care. I'd go with contracter: It's a little more paperwork & money management on your end, but at least you know where it's going. If they're offering health care insurance and you WANT health care insurnace, you could choose be an employee.
9 :
Won't make much of a difference, but I think getting a 1099 (contractor) gives you a little more options. In 2004 I was a contractor - that year I saved on taxes - I did something with my car depreciation expense that saved me $250.
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