Contractor vs Employee

Contractor vs Employee

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Image: – – Macho Spouse

 

employee-contractor-300x270.jpgSo, you have a job offer and the employer offers you employment as either an independent contractor or an employee. You figure that since your wife is in the military, you don't need the insurance and your paycheck will be bigger without all that withholding taken out.

Life as a 1099'er

Ready to take that 1099? Not so fast. You might be in for a big shock at the end of the year. Here is a list of some of the hits you'll take.

• All the income taxes for each taxing entity will be due every quarter after your first year in business. A total of 90 percent must be paid by April 15 of the following year or there will be a penalty.

• You will have to pay the entire Social Security tax. That amounts to 15.3 percent on your first $113,700 and 2.9 percent over that amount. Employees get half that amount paid by their employer automatically. However, as a self-employed individual, you may deduct the half that an employer would have contributed.

• Independent contractors are not covered by non-discrimination laws, wage and hour protection, unemployment insurance, or pension and benefit protections that “real” employees receive.

• If you drive or run other equipment for the business that pays you, you won't be covered by the employer's insurance policy. Guess who that leaves?

What Makes an Employee

The basic issue in deciding whether a person is an employee or an independent contractor is the business's control over the work of the person. This sounds like a simple matter, but courts constantly are deluged with arguments about this issue.

If you're told when to come to work; if you don't provide your own equipment or supplies; and if you are paid in set increments such as hours or piecework, you are an employee, period. If they train you, you are an employee. The courts have made clear that just because the employer doesn't decide to use control, doesn't mean you are then an independent contractor. The crux of the matter is whether they have the right to do so. Read the IRS publication about the issue of contractors vs employees.

Making the Right Decision

Before you make any decisions, take some time to investigate and consider which category works best for you and your family. If you are leaning toward becoming an independent contractor, make sure you're prepared to save enough to cover your tax expenses and any additional costs like liability insurance.

Consider incorporating as a LLC to protect yourself and give you additional tax protection. It's a good idea to get the help of a paralegal, lawyer and tax specialist.

If you are considering becoming self-employed, be certain to read the IRS Bulletin Understanding Employment Taxes. This is a simple document that explains what the requirements are in everyday language.

This post was sponsored by the School of Firearms Technology from the Sonoran Desert Institute.


See also...

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Military Spouse Employment Survey

MOAASheild2.jpgHey guys, have you taken this survey yet?  Stuff like this is important because it may help you find work in the future, as well as, future generations of military spouses!

http://www.moaa.org/milspousesurvey/

The Military Officers Association of America (MOAA), a non-profit organization that advocates for military personnel and their families, is teaming up with Syracuse University's Institute for Veterans and Military Families (IVMF) to launch the Military Spouse Employment Survey.

Military spouses face many challenges to both employment and career advancement as a result of the military lifestyle. This imperative study will look at the employment pattern of all military spouses, especially related to their long-term career trajectories. We encourage all active duty, National Guard, reserve, veteran, and surviving spouses who are 18 years and older to participate by sharing their stories, experiences and lessons learned.

According to the 2010 Department of Defense Manpower Data Center (DMDC), there are approximately 725,877 spouses of Active Duty service members and approximately 413,295 spouses of Reserve and Guard members. In addition, it is estimated that there are more than 15 million veterans' spouses in the United States and over 5.8 million surviving spouses. By adding their voice, we can build a stronger foundation for military spouses' professional needs, identify any barriers to career development and share their stories with government officials, state, and federal policy makers in order to overcome obstacles and improve the quality of life for our service members and their families.

The Military Spouse Employment Survey will open on September 16, 2013 and remain open for 30 days. This survey icompletely anonymous, for research purposes and therefore completely voluntary. The survey will take approximately 30 minutes to complete.   

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30 Ways of Thanks Day #12

30Still.jpg"Every child deserves a toy for Christmas," we agree.  On the 12th way of "saying thanks," Lakesha Cole (2014 Armed Forces Insurance Military Spouse of the Year) reminds us about ToysforTots.org.

 

November is Military Families Appreciation Month, and the 2014 Armed Forces Insurance Branch Spouses of the Year (Branch SOYs) want to help everyone, everywhere participate in thanking and honoring military families.

Americans love our military, but many people don't quite know how best to express their gratitude. As National Guard Spouse of the Year Dr. Ingrid Herrera-Yee notes, “saying "thanks" to our military families is something that many want to do, but are at a loss as to how to do it –or in the case of Guard and Reserve, how to find us!”

So the Branch SOYs created #30Ways of Thanks to help. Each day in November, the Branch SOYs will release a video with an action item that people around the country can participate in virtually or locally, individually or in groups. Participants can hash tag #30Ways so that their messages, photos, or videos are spread far and wide. Hash tags #GratefulNation and #MilFamsRock can also be added as a short-hand way to say “You are amazing, military families!” Best of all, the entire #30Ways video collection will be stored on the Branch SOYs' YouTube channel so that it can be repeated in Novembers to come, or whenever someone is looking for a way to say “thank you” to military families.



 

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