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...

image for 30 Ways of Thanks Day #21

30 Ways of Thanks Day #21

30Still.jpgA group of military spouses wrote Stories Around the Table, a collection of stories about what military family life is like. A portion of sale proceeds benefit Operation Homefront, and organization that helps military families in crisis.

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.

image for Sesame Street and USO Tour - Japan and Korea

Sesame Street and USO Tour - Japan and Korea

SesameUSO.jpgYEAH SESAME STREET!  This tour is still going on for those in Japan and Korea.  Could be a great way to spend an afternoon with your family!

 

The tour which begins at Eielson Air Force Base in Alaska on May 29 and will visit 42 bases in 8 European and Pacific countries over the next six months.  The organizations hope others will be inspired to learn more and suggest these five simple actions everyone can do to support military families:
 
1.        Volunteer at one of the more than 160 USO locations around the world and discover ways you can take action locally.
2.        Offer to help a military family on the home front who live on or off base.  Whether you see that their lawn needs to be mowed or garbage cans taken in, helping with simple household chores and errands can really relieve some of the stress a family may be feeling.
3.        Teach your child how they can help support military kids in their school by visiting uso.org/get-involved.aspx and or Facebook.com/SesameStreetforMilitaryFamilies.
4.        Lend an ear to listen to a military spouse as sometimes just having someone there to vent to or talk to when you may feel all alone can be the greatest support of all.
5.        Say thank you to a military member and their family for their service, sacrifice and strength.  Our troops and their families make sacrifices so we don't have to and those two simple words say so much.
 
“There is nothing that comes close to the feeling you get when you see the smile on a child's face at our Sesame Street shows.  I knew we had something very special the first time I saw the smiles of our military families, and here we are five years later, celebrating a tour that that has traveled the globe three times over and is about to do it again,” said Sloan Gibson, USO President and CEO.  “The USO is proud to be on Capitol Hill celebrating the tour's fifth birthday and assembling care packages for troops overseas.  There is no better way to commemorate such a momentous occasion than IN our nation's capital and WITH our friends at Sesame Street.” 
 
The longest running tour in USO history, the Sesame Street/USO Experience for Military Families has taken its message to more than 368,000 troops and military families, and performed 631 shows on 145 military installations in 33 states and 11 countries.  In 2011,Sesame Street and the USO introduced a brand new character named Katie – a military child experiencing the stresses of moving as her parents are transferred to a new duty station.  Last year, Katie and her Sesame Street pals visited 67 military bases and performed 204 shows stateside.
 
 “Sesame Street has so much admiration and respect for our military families, we feel privileged to partner with our friends at the USO and be a part of this special USO Care Package event,” said H. Mel Ming, Sesame Workshop President and CEO.  “This is a great way to show our continued support to our service men and women and to celebrate five years of bringing our resources and the Sesame Street/USO Experience to Military Families to installations around the world.”

Operation USO Care Packages contain vital items troops use every day, from prepaid international phone cards and snacks to travel-size toiletries and comfort items.  Designed as a way for America to say 'thank you' to our troops and their families overseas as well as to unite communities, today's Care Packages included a special gratitude card from Cookie Monster as well as a personal note to troops signed by USO Caucus Co-Chairs, Reps. Jeff Miller, R-Fla., Tim Walz, DFL-Minn., Howard (Buck) McKeon, R-Cali., and Adam Smith, D-Wash.
 
Since 2003, the USO has delivered 2.3 million care packages to bring a touch of home and necessities to active duty military serving all over the world.  USO Care Packages are distributed to troops traveling through the USO's more than 160 locations worldwide as well as to troops serving overseas. 
 
Whether on the frontlines, with their loved ones, in recovery or in remembrance, the USO and Sesame Street are adapting to meet the needs of those who need us most.  Operation USO Care Package and The Sesame Street/USO Experience for Military Families are just two of the ways we can help them navigate life's challenges. To learn more Operation USO Care Package visitwww.uso.org/operation-uso-care-package.aspx.  To learn more about the Sesame Street/USO Experience for Military Families or check for the latest tour info visit www.USO.org/Sesame


 

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