Going from W2 to 1099

[MegaFan]

I don't own the business. I'm working for someone else. What could I write off besides mileage and healthcare? My wife doesn't work if that matters

Well... let me help you be creative. If you drive and want to feel safe while doing so, how about buying personal "security equipment", training to use said equipment (range time, ammo, etc.), clothes/footwear/safety equipment, cost of a business computer, etc., plus a prorated amount for cell phone.

Any start-up costs? Did this line of work include a business investment? Did you consider starting an LLC, invoicing the business you work for as an LLC, with payments to the LLC, and have your wife be a 50% owner? If so, pay yourself a smaller earned income and pay her quarterly as unearned investment income (passive income) if she doesn't actually participate in running the business. No self-employment tax on her passive income and that alone could cut the self-employment tax in half.

Not offering legal or professional advice... just a few random thoughts to get you started.

 

[jpm2953]

Well... let me help you be creative. If you drive and want to feel safe while doing so, how about buying personal "security equipment", training to use said equipment (range time, ammo, etc.), clothes/footwear/safety equipment, cost of a business computer, etc., plus a prorated amount for cell phone.

Any start-up costs? Did this line of work include a business investment? Did you consider starting an LLC, invoicing the business you work for as an LLC, with payments to the LLC, and have your wife be a 50% owner? If so, pay yourself a smaller earned income and pay her quarterly as unearned investment income (passive income) if she doesn't actually participate in running the business. No self-employment tax on her passive income and that alone could cut the self-employment tax in half.

Not offering legal or professional advice... just a few random thoughts to get you started.

I have so much to learn. Thanks for all the tips. No start up costs for me. Walking into an existing business that only has the owner as an existing "employee". I considered starting an LLC and him paying the LLC and then the LLC paying me but thats over my head currently.

 

[Kman]

I have so much to learn. Thanks for all the tips. No start up costs for me. Walking into an existing business that only has the owner as an existing "employee". I considered starting an LLC and him paying the LLC and then the LLC paying me but thats over my head currently.

I would save a ton of $ if my employees were 1099!!!!!!! Its basically letting the owner of that business get away with not paying half your federal taxes, workers compensation and any benefits. Workers comp is about 10% of my payroll and I match my employees fed taxes.

 

[mhg]

I don't own the business. I'm working for someone else. What could I write off besides mileage and healthcare? My wife doesn't work if that matters

You now own your own business. You now have to keep every receipt for anything you buy.
Being that you know very little about the taxes and deductions, get yourself an accountant to at least
get you started. A good accountant will save you much more than there cost in the first couple years.
You may then be able to reduce your need for a professional for your taxes.
It will be money well spent. I know this from experience.

 

[The Old Jaybird]

I have so much to learn. Thanks for all the tips. No start up costs for me. Walking into an existing business that only has the owner as an existing "employee". I considered starting an LLC and him paying the LLC and then the LLC paying me but thats over my head currently.

LLC in Georgia is cheap and simple to set up. Again, give me a call for details.

 

[whiskerz]

One of the 1099 requirements used to be you set your own hours. This guy may be gaming the system. The IRS will catch on. I have a friend who was self employed and over the course of a year he received 6-20 1099's he was drug to court over one of the guys he worked for being investigated. He won as did the guy but there was a lot of pressure by the IRS. You may need an accountant and quarterly payments are a new way of life. You can deduct a lot more stuff.

 

[DJCantonGA]

One of the 1099 requirements used to be you set your own hours. This guy may be gaming the system. The IRS will catch on. I have a friend who was self employed and over the course of a year he received 6-20 1099's he was drug to court over one of the guys he worked for being investigated. He won as did the guy but there was a lot of pressure by the IRS. You may need an accountant and quarterly payments are a new way of life. You can deduct a lot more stuff.

This. If the business owner tell you what time to be at a job/location, how long to be there, what to do, etc, you're not a 1099 contractor, you are an employee.

Find a CPA that has extensive experience in this area.

 

[madmarinehays]

Might be doing the same move in for info

 

[jpm2953]

One of the 1099 requirements used to be you set your own hours. This guy may be gaming the system. The IRS will catch on. I have a friend who was self employed and over the course of a year he received 6-20 1099's he was drug to court over one of the guys he worked for being investigated. He won as did the guy but there was a lot of pressure by the IRS. You may need an accountant and quarterly payments are a new way of life. You can deduct a lot more stuff.

He isn’t trying to game the system. It’s my old boss and we have been friends/coworkers for over 10 years. He just started the company this year and I will be the only other one working there. Just easier for him to do 1099 starting off. I plan on talking to a financial guy on Friday and getting a plan set up. Thanks for the help!

 

[OttoMan]

I worked on 1099 for many years. You have to have a good accounting person. I deducted as much expenses as possible; all expenses related to the business though, such as my cellphone bill, home-office supply, work clothing, etc... etc... AND FOR SURE MILEAGE!!! - Keep track of how many miles you’ve done thru the year.