1099 options

jeepyjman

Well-Known Member
Joined
Sep 22, 2007
Location
Concord
I am doing a small side job for my wifes company. I have the option to run the payment amount under her and add it to her paycheck or 1099. Opinions on which is better? Amount paid will be under 3000 dollars. thanks
 
I think you pay double Medicare and SSI taxes on a 1099 (7.65% x2). Getting paid via her paycheck is the better option. Disclaimer: I'm not a CPA, just a regular dude who tries to minimize taxes paid in real life.
 
I'd make her pay the taxes...

Also that being said it depends on what your income is (if that's your only "income" this year you will pay nearly nothing on it), otherwise since your wife's employer will pay for half of what you would owe as self employed I would definitely let them.
 
Are you going to have any expenses related to this work?

Anything (type of labor or materials) that would make the labor amount subject to sales and use tax?

With the way the gubamint is nowadays, are you sure you want to discuss this on an open forum?

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I was hoping either way was legal since I am paying taxes either way! No this is not my only income, just a few days/weeks of extra income. The only expense I would have is my fuel since I am driving my own vehicle to the stores for the installation.



kaiser715 said:
Are you going to have any expenses related to this work?

Anything (type of labor or materials) that would make the labor amount subject to sales and use tax?

With the way the gubamint is nowadays, are you sure you want to discuss this on an open forum?

Sent from my SM-G930V using Tapatalk
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jeepyjman said:
I was hoping either way was legal since I am paying taxes either way! No this is not my only income, just a few days/weeks of extra income. The only expense I would have is my fuel since I am driving my own vehicle to the stores for the installation.
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But you had to consult the internet for tax advice, so now this months internet bill is a business expense. And you were in your home office when you did it. And you accessed from a cell phone, so you gotta count that bill too ;)
 
And you said installation which means tools. Of course you bought new tools for this.

Then again if they forgot to mail it and you forgot to list it...I should stop
 
dont count fuel. count mileage. usually .50 to .58 cent per mile?
 
All of the above.
Here is what it comes down to:
W-4 = easiest option for you, more work for them. You pay only 6% FICA tax (plus usual income tax).
1099 = more complex option. You will pay 12% FICA tax (plus usual income tax). BUT you very well might have > 12% in costs to deduce before taxes anyway. So it *might* save you money on the long run BUT is more headache for you. Easier for them.
 
Wait a minute, I just caught this
jeepyjman said:
I have the option to run the payment amount under her and add it to her paycheck or 1099.
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Just to be clear, it sounds like what they are proposing is that instead of you filling in a W-4 etc as an employee, they literally will just pay her more $$ and you do the work?

If that is the case, then the only *proper* route is the 1099...
Disclaimer - I'm no CPA - but I don't see how the above is not employment tax fraud.
 
rodney eppes said:
Will the Extra income, throw Her into a higher tax bracket, &/ or Overtime. Overtime tends to create higher taxes.
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Technically, assuming they file their taxes a married/jointly, it wouldn't matter in the end. When you file you're taxed based on what was bade between both people over the course of the whole year. Sometimes your rate of what is withheld is increased b/c you made a lot more than usual, so the automated algorithm then projects your final annual income with be higher and thus needs to be withheld more... but really you're just going to get that back later either way.
 
Open LLC. Ask to be subcontractor. Deduct EVERYTHING
 
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