1099 or W2 After GC approval

[chmurali]

Hi Gurus,
Recently I have received my 485 application approved and I also have my plastic card.
My questions are
1. I am getting offers from several companies where they are saying that they will pay me in 1099 rather than W2. Can Some body tell me the difference between the two and which is beneficial for an independent contractor.

2. If I am getting paid through 1099 should I take care of my own medical insurance? If so are there any companies which offer insurance for independent contractors who are not attached to any company?

3. That company person offering me position is saying that let us say hourly rate agreed was 40 dollars then he is willing to pay 25 dollars as salary and remaining 15 dollars as per dim? What is this perdim? He is saying that you need n't pay taxes on perdim because it is like a daily allowance. Please share your experiences.

Thanks,

 

[sivak_c]

I will say W2 is better than 1099.

you are right 1099 u have take care of ur medical. Offcourse some company will do the single contractors. So better open ur own consultancy and start working for it. If they are ready to pay 60$ for hr or so it will be good for you. You will control ur own control on the money

 

[gbaliga]

My reply is below. Hope it helps. send me an email I will let you know more details, which cannot be done over this public forum.

Hi Gurus,
Recently I have received my 485 application approved and I also have my plastic card.

My questions are
1. I am getting offers from several companies where they are saying that they will pay me in 1099 rather than W2. Can Some body tell me the difference between the two and which is beneficial for an independent contractor.
ANS: Difference between W2 and 1099 is in 1099 you pay the taxes to the Govt. So you do the headahe of preparing taxes, mailing the taxe etc. whereas in W2 you just file the return at the year end.

2. If I am getting paid through 1099 should I take care of my own medical insurance? If so are there any companies which offer insurance for independent contractors who are not attached to any company?
YES. Plenty of companies on the internet. search for health insurance and yu will find 1000+

3. That company person offering me position is saying that let us say hourly rate agreed was 40 dollars then he is willing to pay 25 dollars as salary and remaining 15 dollars as per dim? What is this perdim? He is saying that you need n't pay taxes on perdim because it is like a daily allowance. Please share your experiences.
yes this is possible. contact me I can give yu more detail.



Thanks,

 

[chmurali]

Share my experience

Hi Ma21 & JoeF,
Thanks for sharing your experience.
---------------------------------
This is full of pitfalls. You have to explain the perdiem (in case you get audited) and the IRS would love to know why you are getting a perdiem of $120.00 , whereas the industry standard is $25-$35 plus actual expenses.
----------------------------------
When you say this is it 25-35 dollars per day or per month?
--------------
Here is some additional info that I wanted to share.
I also spoke with my tax consultant and he is saying that when you are taking money on 1099 then I will have to pay 7% more taxes like for Social Security and other expenses that company pays to IRS when they are paying on W2.
But the advantages are if you are getting 40 dollars then you can deduct certain expenses like fuel to work, High speed internet, car loan etc., (let us say come to 5 dollar per hour) then your actual income earned is only 35 dollars and you will pay tax on only 35 dollars.
But disadvantages are
1. No group medical insurance so while I enquired with a medical insurance agent the expenses to my family were running close to 1000 dollars instead of 400 dollars.
------------------------------------------
How does Perdim work?
Do I have to work on w2 so that I can get perdim from company or can I claim constant amount of perdim while I am getting paid through 1099?

Thanks in advance.

 

[BankruptGC]

check this company before you get into this

check www.mybizoffice.com if you want to work 1099. They are the leaders in 1099 and they can help you in lot of way.