Difference W2 and W9
- Thread starter msstl
- Start date
Thanks JoeF for the reply. 1099 is correct
Again back to the question
If I work as independent contractor, I will get 1099 form instead of W2.
From the website, the additional taxes I have to tax are
1. 6.2% Social Security tax
2. 1.45% for the Medicare
Also, I will have to pay for the medical/dental etc insurance.
Is there any other tax, I have to pay as working on 1099 as compared to W2.
There is some confusion about the Independent Contractors and Employee
Following is from IRS website
"Independent contractor. People such as doctors, dentists, veterinarians, lawyers, accountants, contractors, subcontractors, public stenographers, or auctioneers who are in an independent trade, business, or profession in which they offer their services to the general public are generally independent contractors. However, whether these people are independent contractors or employees depends on the facts in each case. The general rule is that an individual is an independent contractor if the payer has the
right to control or direct only the result of the work and not what will be done and how it will be done. The earnings of a person who is working as an independent contractor are subject to SE tax.
You are not an independent contractor if you perform services that can be controlled by an employer (what will be done and how it will be done). This applies even if you are given freedom of action. What matters is that the employer has the legal right to control the details of how the services are performed. "
If I do consulting, will I be treated as independent contractor or employee.
The employer certainly has the right to decide what will be done and how it will be done. Just because of the above point, I will be considered as an employee.
Please clarify.
Thanks
JoeF said:
Again back to the question
If I work as independent contractor, I will get 1099 form instead of W2.
From the website, the additional taxes I have to tax are
1. 6.2% Social Security tax
2. 1.45% for the Medicare
Also, I will have to pay for the medical/dental etc insurance.
Is there any other tax, I have to pay as working on 1099 as compared to W2.
There is some confusion about the Independent Contractors and Employee
Following is from IRS website
"Independent contractor. People such as doctors, dentists, veterinarians, lawyers, accountants, contractors, subcontractors, public stenographers, or auctioneers who are in an independent trade, business, or profession in which they offer their services to the general public are generally independent contractors. However, whether these people are independent contractors or employees depends on the facts in each case. The general rule is that an individual is an independent contractor if the payer has the
right to control or direct only the result of the work and not what will be done and how it will be done. The earnings of a person who is working as an independent contractor are subject to SE tax.
You are not an independent contractor if you perform services that can be controlled by an employer (what will be done and how it will be done). This applies even if you are given freedom of action. What matters is that the employer has the legal right to control the details of how the services are performed. "
If I do consulting, will I be treated as independent contractor or employee.
The employer certainly has the right to decide what will be done and how it will be done. Just because of the above point, I will be considered as an employee.
Please clarify.
Thanks
Clarification
If I get 1099 and work as an employee, do I have to pay additional taxes (social security and medicare) or the employer will pay for that.
On W2, the employer pays half of the social secutity and medicare taxes. Will it be the same case, if I get 1099 and work as an employee.
Are there other tax consequences other than the above mentioned between 1099 and W2.
One more question: The IRS get the tax (social security + medicare), either from the employee (classified as independent contractoe) or the employer (classified as an employee) in 1099 case. Then make this confusing, why not just let the employer pay or the employee pay the taxes. OR is there any other tax, employer saves by classifing an employee as an independent contractor
Thanks
If I get 1099 and work as an employee, do I have to pay additional taxes (social security and medicare) or the employer will pay for that.
On W2, the employer pays half of the social secutity and medicare taxes. Will it be the same case, if I get 1099 and work as an employee.
Are there other tax consequences other than the above mentioned between 1099 and W2.
One more question: The IRS get the tax (social security + medicare), either from the employee (classified as independent contractoe) or the employer (classified as an employee) in 1099 case. Then make this confusing, why not just let the employer pay or the employee pay the taxes. OR is there any other tax, employer saves by classifing an employee as an independent contractor
Thanks
Last edited by a moderator:
You guys seem to have answered most of my doubts, i have a quick question and appreciate your comment on this.
In order to become an independant contractor, you need to start your own company. In order to start your own company, do you necessarily need to have your GC approved or could you do that with a valid EAD while your AOS is pending?
Apologies if my question sounds stupid, im totally new to this aspect of self employment and independent contracting and am slowly absorbing information from discussions here.
Thanks!
In order to become an independant contractor, you need to start your own company. In order to start your own company, do you necessarily need to have your GC approved or could you do that with a valid EAD while your AOS is pending?
Apologies if my question sounds stupid, im totally new to this aspect of self employment and independent contracting and am slowly absorbing information from discussions here.
Thanks!
JoeF said:
Thanks for your reply, JoeF. I am currently on H1, have applied for GC as the spouse of a USC. Yet to get my EAD. Tired of the company that sponsored my H1, cant wait to get my GC so i can become an independent contractor. So based on what you said, i assume that i can start a company and work as an independent contractor as soon as i get my EAD? Also, would i be able to get an EIN based on EAD? I was always under the impression that you can apply for EIN only if you have your GC.
Thanks for your help.
P.S: There was someone i worked with whose first name was Joe and last name starts with F and was very good with immgration laws. He quit his job couple of weeks back and i havent heard from him since. Im not sure if you are the same person, but if the word CDSEM mean anything to you, PM me, we have lots to talk
If not, then ignore the last paragraph