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Thread: Working as Contract worker as own business

  1. #11
    Super Member buslady's Avatar
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    Also, have you noticed how the schools are now using contractor instead of employees. I always wondered how it would be cheeper to allow an employee to retire, then hire them back as a contractor. Its because of the savings in SS and MED taxes, as well as workers comp. You can look back at you and DH paystubs. What ever you paid in is what your employer paid in, as well. It is not a small number. And the government doesn't care that you are out that money, they want their "fair" share and will add penalties and interest making that number even larger if you don't pay on time. If you will owe the government more than $1000 you could be required to make quarterly payments, as well. This is NOT tax advise in any way shape or form, make sure you check out all the details before getting too far into this. If they are a really good, they may even be able to tell you. OK, I 'm off my horse.
    Onalee Rose
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  2. #12
    Super Member seamstome's Avatar
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    You need to consider the state laws in this instance also. Being an independent contractor has specific federal and state rules, I think there are 21 in IL.

  3. #13
    Power Poster nativetexan's Avatar
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    I just talked to my hubby's BIL who is very business savy. It cost money to file a business license and all in all, it doesn't sound like something I'm willing to tackle. So i'm bowing out of that particular job hunt.
    thanks all. CC

  4. #14
    Super Member Sheila_H's Avatar
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    If they contract the work out they don't have to pay you any kind of medical benefits and they won't contribute to your 401K either so it really saves the companies a lot of money if they can "contract" out a lot of they're higher paying positions. I wouldn't do it, it will cost you a lot of money to get setup us a business and then your opening up both you and your husband to a lot more scrutiny by the IRS which no one wants.

    When I first started working in the US one day at work I got served to go to tax court by the IRS. Had no idea what it was about, there was a woman behind a stack a mile high of folders. Judge asked me why the IRS had no tax records of me before 1997 I told him I'm a Canadian citizen that recently started to work in the US. He looked at her she nodded he thanked me and told me to have a nice day. I learned real quick these are not people you want to mess around with.

  5. #15
    Moderator QuiltnNan's Avatar
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    By chance would the company be Aspire? I saw that on the news a few nights ago and was intrigued. So I read the website VERY carefully before applying. They do point out, many times, that you should hire your own accountant. And they give you a reference for an attorney for advice on the incorporation. Not only do you have to invest in your own supplies, but uptraining is on your own time and they charge a fee of $19.95 per pay period. They state that your 'payouts' come to about 10-13 dollars per hour. Working from home at your own hourly schedule is nice, but the true income is very low.
    Nancy in western NY

  6. #16
    Senior Member Ellen's Avatar
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    Nativetexan, I was thinking earlier if they want you to get a business license, just go into business for yourself and compete with them.
    I used to have a tax man that came to the house and did ours....you could do the same with no grief.
    Good luck finding a job or making one.
    Ellen......I'm gonna go play now

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  7. #17
    Super Member cpcarolyn's Avatar
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    The Business license is a smoke screen the company thinks will help it getting around the independent contractor vis employee. The IRS has a hole list of what makes an independent contractor vis an employee and not anywhere on the list does it mention a business license. It talks about who determins what is to done and when and for how much. It is correct that as an employee the employer will pay have your SS and Medicare and as an independent contractor you pay the hole thing. But also remember that as an independent contractory there will be no Workmans Comp, no Sate disability and no unemployment. But bottom line is if you need the job you have no choice. Good luck.

  8. #18
    Super Member willferg's Avatar
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    Bear in mind that while as an independent contractor, you have to pay more of your own taxes, you also get to write off any business expenses, which can more than even things out. I agree with cpcarolyn, though, that requiring a business license is to benefit the company's case that you are not a regular employee and not anything that benefits you. If you would be working in their office, with their equipment, presumably at set hours, it seems to me that you would not meet the criteria of independent contractor, and the company should know that. Just my two cents!

  9. #19
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    I work by contract. I work through a group called MBO Partners which is for independant contractors and small businesses. You should at least check out the website before you give up. You can find them at: http://www.mbopartners.com/#home

    I know you have to be careful with social security and making TOO much money. I hope this helps.

  10. #20
    Power Poster nativetexan's Avatar
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    This company handles HOA fees for homeowners. I'd make only $11.00 per hour and it's not worth all the trouble and stress for that. I'm one of those who get caught if i try anything the least underhanded. I'm not willing to pay a lot to set up my business license nor tackle tax problems. I"m just able to file our joint taxes as it is. So I"m out of the running for the job, i called them this morning.
    I just applied for a job with the City here that is supposed to be Tues, Wed and Fridays. unless you need to cover for others, then it's 40 hours or more and evenings once in awhile. This is very close to home, so it may work out. It pays $16.00 up to $23.00 with benefits. If they hire me anyway.

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