Any Self employment experts here?

[Jeff K]

Here's the deal
Joanne was working for a company that does electronic assembly work. When we bought the new house it became too far to drive, so she quit. The company asked her to continue working from home, but, they made her fill out a 1099. So really she works for herself. She doesn't make much money doing this but she is happy and I kinda like having her home. And since there isn't any travel involved its a huge gas savings.

Anyway...
This 1099 crap scares the crap out of me. I think she should become a "company" and avoid the 1099. But I don't know where to start. And hiring someone to do it for her would eat up all she is making.

So llc.?
S corp?

Anyone have any expertise in this?

[Jeff K]

And to top it all off she is getting so busy she has been thinking of having our daughter help her. I had hope this would all fizzle out but it seems to be picking up steam instead

[KY,Dave (AKA Misunderstood)]

All the 1099 is is a way of them telling the government how much they paid her for her work. They write off that on their business and you report it as income on hers. Just make sure you pay your quarterly taxes in a timely fashion (April 15th, June 15th, Sept. 15th and Jan 15th) and you won't have any trouble. No penalty the 1st year you're in business for yourself until you figure what you'll owe. Can't wait until end of year to pay they want it quarterly once set  up. End of year you'll use a schedule C for the business income and fill out a schedule SE for self employment also known as Social Security. Make sure you set enough aside quarterly for this as you're paying the full 15 %, not half by you and half by your employer. I'm no expert, but been working for myself for over 20 years and do my own taxes. Dave

[DFragn]

If she organizes as a C or S Corp, LLC, or Sole proprietorship and "Subs" work from said company there's still the 1099 to contend with in some cases.
Best suggestion is to consult a good small business accountant for proper setup. There are tax advantages & disadvantages to varying types of incorporation. Depending on the type of work a state license may not be required, but a local business license registration may.

A 1099 is not a scary thing. Simply file and pay quarterly estimated taxes.

[Warlock]

Here's the deal
Joanne was working for a company that does electronic assembly work. When we bought the new house it became too far to drive, so she quit. The company asked her to continue working from home, but, they made her fill out a 1099. So really she works for herself. She doesn't make much money doing this but she is happy and I kinda like having her home. And since there isn't any travel involved its a huge gas savings.

Anyway...
This 1099 crap scares the crap out of me. I think she should become a "company" and avoid the 1099. But I don't know where to start. And hiring someone to do it for her would eat up all she is making.

So llc.?
S corp?

Anyone have any expertise in this?

Back when I was self employed I would set aside 33% of what I made and payed them ever quarter.
David

[fstsix]

Don't worry about the 1099, been doing it for over 30 years, the best part is that she can stay DBA self employed if you feel there is no risk of lawsuit, You can also use here car, and home office, cell phone, gas, travel expense, as business expense to offset her tax...and the best part is SHE IS FREE from someone looking over her shoulder. Greg. 

[BonS]

This is the way we do it: My wife business is a sole proprietorship. I have a day job. I have enough withholding taken from my paycheck to cover our combined anticipated taxes. Come April 15th we have already paid our share and we usually get a small refund. Because we didn't owe any extra when we filed we don't have to pay Quarterly estimated taxes during the following year. If you're ever late with the estimated quarterly payments you get gigged for penalties and interest and I hate that! Works good for us.

[hubcapsc]

My wife does our taxes as I'm clueless  but I do some contracting and have to do a 1099... what everyone
else says sounds right to me... especially the quarterly estimated tax thing... the only scary thing to me
is paying estimated taxes before you actually have made any money...

-Mike

[ArmyValker]

As far as a s-corp, llc or any other protection, I'm not sure if that's the right path. There's no liability to protect yourself from, they are simply letting you work out your own taxes.

A good business lawyer would be able to give you firm answers, but I think it'll be pretty close to the advice you've already got. As long as she pays the taxes she's supposed to, it's easy peasy.

[Pete]

$500+ for incorporation + additional Corp tax return to be filed yearly.
+ 15+% self employment tax on profits paid to her.

+++'s far outweigh the cost if she is making say $10K or more, because many things can be paid before taxes by the corporation to reduce taxable income paid to her.

Health Insurance
Medical cost for DR's care and prescriptions above insurance.
Some expenses as described above by others.
S401K, SEP retirement options
others

If she is making and paying taxes on more than $5000 profit per year I would incorporate - regular corporation.   (LLC and SUB-s no real advantages now)

[Robert]

The 1099 is not a big deal quite a few in sales are issued a 1099 not to worry just find the particulars on what you can deduct and such. I really dont think incorporating is the way to go but then again you need to see what tax advantages are better for you. To file for a corp by a lawyer with minutes and all the legal stuff is about 500. You can file for yourself and the filing fees are around 150.00 and you need to get a corp book but just look up the Florida dept of corporations and go from there. If you have a good accountant you should ask them these questions. But what I really dont like is the fact that the company wants you and says its ok to work at home and then cuts your pay. How by issuing the 1099 effectively making you pay the full boat for your taxes. Normally each employee you pay half of their taxes withholding and SS and such but with a 1099 you are solely responsible for it. It may work out better by deductions but if she isn't making much then nothing may really help. It also matters if you file jointly and you see things need to be worked out. But the 1099 is not a biggie.