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Started By
Message
Starting a business - please advise which type
Posted on 7/12/22 at 11:59 am
Posted on 7/12/22 at 11:59 am
I have a job opportunity for a PM position on a software implementation (SAP). Previously I have been contract W2 or direct hire. This company is asking to do c2c so I am looking at setting up a business. I think LLC is the way to go (I would be the sole partner and employee) but would welcome any advice others have. This is in Texas.
Posted on 7/12/22 at 12:04 pm to TXTIGERTAIL
I don't know what half that shite means, but one of the most important things you need to add is the pay. I'm guessing its fairly high, so you will likely save significant self employment taxes by setting up as a S-corp. But as the only employee, you need to speak to a CPA about that.
You need to strong consider benefits here. If they want to pay you as a contractor, it should be 40-50% more AT LEAST then a direct hire with decent to good benefits. They aren't paying their share of taxes, workman's comp, time off, and any benefits like health care.
Some people think a 20% increase in pay to do contract work is great, its NOT for anyone making over $100k that's actually terrible.
ETA: Also, need to consider CPA/ Book keeping charges for a LLC. Probably talking $2000 or so a year for a good CPA.
You need to strong consider benefits here. If they want to pay you as a contractor, it should be 40-50% more AT LEAST then a direct hire with decent to good benefits. They aren't paying their share of taxes, workman's comp, time off, and any benefits like health care.
Some people think a 20% increase in pay to do contract work is great, its NOT for anyone making over $100k that's actually terrible.
ETA: Also, need to consider CPA/ Book keeping charges for a LLC. Probably talking $2000 or so a year for a good CPA.
This post was edited on 7/12/22 at 12:08 pm
Posted on 7/12/22 at 12:04 pm to TXTIGERTAIL
That's what I would do for now. If you become a sole proprietor exclusively going forward it could be worth setting up an S Corp, but that comes with more accounting administration and you are subject to Texas Franchise Tax.
Based on your limited info, it seems like LLC is your best bet for now, but it could be worth meeting with a CPA.
Based on your limited info, it seems like LLC is your best bet for now, but it could be worth meeting with a CPA.
Posted on 7/12/22 at 12:05 pm to baldona
quote:
I don't know what half that shite means
At least you qualify your typically bad advice now. Progress, that's all we can ask for.
Posted on 7/12/22 at 12:09 pm to Mingo Was His NameO
quote:
At least you qualify your typically bad advice now. Progress, that's all we can ask for.
This is the MT so I'm not going to get in a dick measuring contest, but you need to get off my nuts. Just because you don't like my advice, doesn't mean I'm wrong.
Posted on 7/12/22 at 12:14 pm to baldona
When working Contract W2 I increase my rate over direct hire to cover my additional cost of benefits not provided (health care, retirement contribution, etc.). The rate as a c2c (corp to corp) will be significantly higher to cover all that and taxes as well.
Posted on 7/12/22 at 1:31 pm to TXTIGERTAIL
LLC taxed as an s corp. Talk to a CPA.
Posted on 7/12/22 at 1:33 pm to baldona
quote:
Just because you don't like my advice, doesn't mean I'm wrong.
But you are wrong and you don't know what you are talking about. It has nothing to do with whether I like it or not.
Posted on 7/12/22 at 1:37 pm to jfw3535
quote:
LLC taxed as an s corp.
Depends, is this a one off or does he plan to do more of this going forward. If it's a one off, it likely doesn't make sense to do an S Corp, he have to pay to incorporate, set up payroll, pay himself, file the Corp return, etc, etc. Probably file a Texas franchise tax return.
Way too much shite to do to maybe not save any money.
S Corps have some big advantages but they aren't a one size fits all.
Posted on 7/12/22 at 8:03 pm to Mingo Was His NameO
quote:
Depends, is this a one off or does he plan to do more of this going forward. If it's a one off, it likely doesn't make sense to do an S Corp, he have to pay to incorporate, set up payroll, pay himself, file the Corp return, etc, etc. Probably file a Texas franchise tax return. Way too much shite to do to maybe not save any money. S Corps have some big advantages but they aren't a one size fits all.
I can say my CPA talked me into doing my (single member) LLC this way initially and it was an absolute cluster frick and nightmare. Way too much to worry about just to get around a little extra taxes. The hassle just wasn’t worth it.
Posted on 7/12/22 at 9:38 pm to Mingo Was His NameO
quote:
he have to pay to incorporate, set up payroll, pay himself, file the Corp return, etc, etc. Probably file a Texas franchise tax return.
easy to do. and easier once setup and streamlined. my CPA files the franchise tax for me with my taxes.
Posted on 7/12/22 at 9:40 pm to Fat Bastard
quote:
easy to do
So is filing a schedule C on your personal return, if fact, that's a hell of a lot cheaper and easier.
Posted on 7/12/22 at 10:45 pm to TXTIGERTAIL
quote:
sole partner
quote:- means only, solo, alone.
sole
quote:- Means someone else you’re in business with.
partner
Does not compute.
I’m not a money or business expert by any stretch, but I was obligated to say it.
Posted on 7/13/22 at 6:50 am to Mingo Was His NameO
quote:
So is filing a schedule C on your personal return, if fact, that's a hell of a lot cheaper and easier.
i think you missed the main point.
the point is it all depends how much
he makes.
cheaper? LOL. my CPA charges peanuts compared to the thousands upon thousands I save in taxes being taxed as an S-corp.
Now, if he makes a lot and wants to pay out his arse in SE tax hey knock yourself out. Me? f that.
This post was edited on 7/13/22 at 6:55 am
Posted on 7/13/22 at 9:17 am to Fat Bastard
quote:
cheaper? LOL. my CPA charges peanuts compared to the thousands upon thousands I save in taxes being taxed as an S-corp.
Now, if he makes a lot and wants to pay out his arse in SE tax hey knock yourself out. Me? f that.
I feel like I'm beating my head against a wall. I'm done with these threads. I'll let Baldona, who I think just inherited everything because he's a fricking retard with anything tax, and the real estate guy give all the advice.
Can you not read or do you not care, holy shite
Posted on 7/13/22 at 2:51 pm to TXTIGERTAIL
quote:Set up an LLC. go with an S corp and pay yourself a reasonable salary and play in the grey with reported self employment income on your K-1
I have a job opportunity for a PM position on a software implementation (SAP). Previously I have been contract W2 or direct hire. This company is asking to do c2c so I am looking at setting up a business. I think LLC is the way to go (I would be the sole partner and employee) but would welcome any advice others have. This is in Texas.
Posted on 7/13/22 at 2:53 pm to ChexMix
quote:
Set up an LLC. go with an S corp
Posted on 7/13/22 at 2:54 pm to Mingo Was His NameO
quote:except youre stuck paying SE tax on the entire gain when you could pay yourself a reasonable salary and avoid paying SE taxes on the difference.
So is filing a schedule C on your personal return, if fact, that's a hell of a lot cheaper and easier.
Schedule C is NOT the way to go. Little to no wiggle room and you get hammered in taxes
Posted on 7/13/22 at 2:55 pm to ChexMix
quote:
Schedule C is NOT the way to go
Im done arguing about it, but that just depends as I've already said. Is he going to contract going forward or is this a one off? How much is the contract worth? Etc, etc.
Posted on 7/13/22 at 2:58 pm to Mingo Was His NameO
quote:You dont know what you are talking about it you are advising this man to file his business on a schedule C. I hope you dont have clients
m done arguing about it, but that just depends as I've already said. Is he going to contract going forward or is this a one off? How much is the contract worth? Etc, etc.
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