|
|
| *The Commerce Journal>>>Other Taxes |
LLCs for individuals - my employer wants to make me pay taxes instead of him! Any advice - pros/cons? |
LLCs for individuals - my employer wants to make me pay taxes instead of him! Any advice - pros/cons? Your question is not related to LLC for individuals. Employer wants you to pay taxes instead of him means that employer wants you to work as a contractor (or on a contract job) and he does not wish to keep you as a regular employee. As a contractor you will end up paying 7.65% more taxes. This also saves the employer of paying you other benefits that are given to the regular employees. The IRS will have a say in whether you are a "independent contractor". If the employer controls the work hours, workplace, and how you do the work, then you aren't. When your employer wants you to pay payroll taxes, then you're no longer an employee. You are called a consultant. As a consultant, you're responsible for your own payroll taxes including the employer portion. As an employee, your federal payroll taxes is 7.65% for FICA and Medicare. As a consultant, your payroll taxes is 15.3%. However, this tax is based on net income after your business expenses such as telephone, office supplies, gas, car depreciation, etc. As a consultant, you don't have a set working schedule. Your employer can't demand that you show up at a certain hour or leave at a certain hour. But your employer can request that you be there around a certain hour and can be specific on meeting schedule. You should check with your accountant on some additional issues pertaining specifically to your situation. As a consultant, it is good to have a LLC. It limits the your liability exposure. Your personal assets are better protected. You may want to have business insurance depending on your industry. If you want to discuss more on this issue, feel free to email me. I have been a consultant and self employed for over 15 years. Since you are an employee, there is no option. Your employer MUST withhold taxes from your wages and MUST pay his payroll taxes. Therefore it is NOT a question of pro and con. The law is the law and that's that! Your employer is not obligated to withhold your taxes. You are. It's a convience they provide their employees. May or may not be legal - there are rules, employer can't just decide any and all employees are now independent contractors. Assuming it's OK, your expenses will go up, so you should be paid more for same work. If the IC setup is proper, then a corp may be a better choice than an LLC, depending on numerous factors - consult your biz attorney and accountant. |
| Tags |
| Boston Austin Atlanta Other - Business & Finance Other Taxes United States Taxes United Kingdom Taxes Spain Taxes Singapore Taxes Mexico Taxes Ireland Taxes |
| Related information |
And this has to do with Taxes - General how? Please ask this in the proper section.... No, higher taxes do not necessarily mean more welfare money. Welfare (cash aid to needy families) in most states have either not changed or have been cut in order to encourage more work part... More than likely it means Medicare Employee. Is it 1.45% of your gross pay? If so then that's what it is. If not, then best bet is to ask payroll dept at your work what it is to be certa... Title 26 of the US Code is the codification of the Internal Revenue Act and is the prima facie law covering taxes. ... Link attached to California Sales tax Source(s): ... What country or state are we talking about here? I don't know of any service tax here in the US to deduct for, but other countries may have other taxes. Washington State has 8.4% sales t... You have received a bill from someone, acknowledged that it is payable by you, recorded it in your accounting system but have not paid it yet. Bills payable is a liability in your accounting... The Irish Reveue Office has an excellent site at ... |
Commerce Categories--Copyright/IP Policy--Contact Webmaster |