Good conversation. I was an LLC and paid the IRS as an S-Corp. Because
the filings where too much for me I used a payroll company. Not sure I
really saved much because it cost so much for the payroll company and
for the CPA.
After reading what David and Steve had to say I think I may never do any
1099 work again... in the form of freelance programming. I think Steve
has the right idea.
Both of you gave great feedback.
On 2022-08-19 18:10, David Schwartz via PLUG-discuss wrote:
> A. I have nothing for sale to folks here, as I’m semi-retired now.
> This is all water under the bridge to me.
>
> B. I went down the route of working as a sole proprietor for over 10
> years. I nearly lost my house twice and got hosed-up in a lawsuit
> where I “won the battle but lost the war” mainly because of
> personal exposure I took on from a client (a Corp) whereas I was a
> sole proprietor rather than a Corp or LLC. My lawyer was new and
> didn’t recognize that this guy had used a very classic approach to
> judgement-proof himself and his business, and after “we” won what
> amounted to a worthless judgement, my lawyer resigned and sued me for
> his fees. Never mind that my “client” had actually been awarded
> 100% of my judgment against him from a malpractice claim, it was
> totally uncollectible, and my lawyer never saw it coming.
>
> C. This all cost me a LOT of money, time, stress, and aggravation,
> (all of those things you mentioned, and more) and ended up forcing me
> to cash out my retirement funds to keep from losing pretty much
> everything.
>
> D. I was audited by the IRS several times, although in the end I
> didn’t owe them anything. It’s just that as a sole proprietor
> there are lots of perfectly legitimate tax write-offs you can claim
> that raise enough flags with them that you attract audits. Audits are
> quite nerve-racking, take a lot of time, and can end up costing your a
> LOT of money.
>
> E. in 2009 I got a big contract in another state, and met with a tax
> advisor who basically laid out most of what I stated; he convinced me
> to set up a C-Corp and use a 3rd-party to process my payroll. It ended
> up being the easiest, simplest gig I ever had; my personal taxes were
> simple to file; my corp taxes were very straightforward; very little
> of the stuff you mentioned applied; and my CPA said it saved me money
> over not having the Corp. I had it for a few years and it really
> simplified a ton of stuff.
>
> Take what you want and leave the rest. It’s all free.
>
> -David Schwartz
>
>> On Aug 19, 2022, at 5:40 PM, Steve Litt via PLUG-discuss
>> <plug-discuss@lists.phxlinux.org> wrote:
>>
>> On Sat, 2022-08-20 at 00:07 +0000, David Schwartz via PLUG-discuss
>> wrote:
>>
>>> All of that noise
>>
>> Not noise.
>>
>>> really only applies to someone who’s a glutton for punishment.
>>
>> https://en.wikipedia.org/wiki/Ad_hominem [1]
>>
>>> If you value your time, energy, and sanity, here’s what you want
>>> to do.
>>
>> A little more advice for those choosing to be tech contractors.
>>
>> You need to sell your services, so be nice. Don't call other
>> peoples' statements
>> "noise". Don't imply that they're "a glutton for punishment". And no
>> matter how
>> smart and successful you consider yourself, don't gloat over how
>> valuable your time,
>> energy and sanity are.
>>
>> I stand by what I wrote in my previous post.
>>
>> SteveT
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>
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