!099-please help and clear me

C

canus_immi

Volunteer Moderator
1099-please help and clear me

Hello friends ,

please help me.

what are options on 1099 - i am have to work on EAD

1) In order work on 1099 Do we need to have a company or not.

2) How do you generate payroll on 1099. How soon we have to pay the taxes!!

30 if i ask 42$ per/Hr how much money I will get to my pocket

Please Help me


Thanks
 
Last edited by a moderator:
1099 vs. W2

canus_immi,

If you are a primary applicant for greencard, 1099 might not work. In case of RFE for employment letter, you won't be able to provide it.

You do not need to form your own company to work on 1099. If you form a company, you become an employee of the company - but as you're on EAD, I am not sure if INS will accept it as a proof of employment.

If you're working on W2 and if the employer is paying you an hourly rate, it can be considered as an employment in case of RFE and you can ask your employer (the one that's giving you W2) to give you an employment letter.

There is a lot of difference in taxation in all the above cases.

On W2, the employer deducts all the taxes from your pay. So you do not need to do anything. This is as good as a full-time salaried position.

If you're on 1099, you need to take care of your taxes. The client will give you a check without any taxes witheld. You need to file State/Federal taxes and pay for the social security money which otherwise the employer pays for you. (So make sure that your 1099 rate is at least 10% more than the W2 rate).

If you're incorporated, you need to file small business taxes (I guess quarterly - not very sure). You better have a CPA do that for you.

Hope this helps.
 
to find out how much will go in your pocket on 1099

See your last years W2

Say your salary was 100K and you've paid total 35K in taxes (Federal/state and others). Also check the employers contribution for Social security - say it was 10K (Note that it did not come from your salary).

So in this case, your employer spent a total of 110K on you (ignore 401K etc). and you got 65K in your pocket.

Now if you're getting $40/hour on 1099 and say you work for 2000 hours in a year. Your total income is 40 * 2000 = $ 80000.00
(This is equivalent to 110K in the above example). You still need to pay your Fed/state taxes. In addition, you need to pay the social security contribution (which otherwise your employer would have paid).

So subtract 35% of Fed/State taxes and 10% of SS taxes from 80000. Which would be

80000 - 28000 - 8000 = 44000.00 = what you'll get in pocket after taxes.

NOTE**** I do not know the percentage of SS taxes. I am assuming it to be 10%


Well, this is just my understanding! Gurus, please correct me if I am wrong.
 
Last edited by a moderator:
Monthly calculation :
Gross monthly income = 42*180 = 7560.
My calculation is you will get a net pay in the range of 5000 to 5500
It's based on my experience in the last year( in one of the projects, i was paid $39/hr by my company and used to get a net pay of $5000/month) .
 
Thanks for the info,

one thing i did not understand

1) What will be the procedure for generating the taxes. How soon i have to pay the taxes withhold.


2) another question comes to SSN+Medicare tax (6.2+1.3) * 2 Do i need to pay the 15% taxon ssn and medicare.

3) can we take the commute expenses incurred using 1099 , without company?? I know it is possible with company.

4) Any other vitual info please share ur experience


Thanks for the help
 
You can claim travel expenses on 1099

Yes, you can get tax benefits on travel expenses, laptop etc. on 1099 even if you're not incorporated.

Do not know any details about how to withold taxes etc. I've never done it.
 
How do you deduct for laptop and etc withoyt having corpartion

Can anyone share the infor with me please

thanks
 
Last edited by a moderator:
I have another question. Can we have W2 and 1099 simultaneously when we are on H1B. Or is that going to be considered a violation of visa rules.
 
I think YES , if you have EAD and working on W2 with GC sponsered company . This case is NOT a problem in case you get an RFE because your company will provide you employment letter

Thanks
 
Canus_immi,

Vidongre has covered most about 1099.

You are allowed to deduct some of the work related expenses. Like if you work from home, rent paid for that area can be deducted. Phone or internet exclusively for official purpose. I'm not sure about commute.

You have to calculate estimated tax for your income and pay it every 3 or 6 months(not sure, please check). If you dont pay estimated tax, you have pay a penalty calculated by IRS at a later date. Or if your spouse is working, you can have additional tax withheld from him/her.

1099 forms and instructions are available in

http://www.irs.gov/formspubs/lists/0,,id=97817,00.html

Hope this helps.
 
Originally posted by Gonecase
I have another question. Can we have W2 and 1099 simultaneously when we are on H1B. Or is that going to be considered a violation of visa rules.
Click to expand...

H1B is tied to an employer. So you cannot work on a 1099 while on an H1B. You can work on a W2 or 1099 if you have an EAD. With an EAD you can have multiple jobs too.
 
1) What will be the procedure for generating the taxes. How soon i have to pay the taxes withhold.

Ans: You'll need to pay estimated taxes to the IRS every 3 months. Visit the IRS site and search for 1040-ES.
 
thanks for the help,

After I am talking with them abt the salary , I asked him 32$ per/HR on 1099 plus XX$ as expenes .
XX*160 = XXXX$ he will pay in form of personnel check(no taxable , it is okay for him he can save some extra dollars)
and 32$ * 160 = 5120 for this amount only i have to pay the taxes. Rest of the money is no tax and they said they will dont show that money as income or anything else . Will it be any problem
Now my question is that extra dollars (XXXX) given as expenses do i have to show to IRS. He Said I dont mention these dollars in yr W2 form.

So please help me . Do you have to show them to IRS these dollars while filing taxes

Thanks
 
Last edited by a moderator:
You must log in or register to reply here.
Top