Insight, tips for evaluating 1099 job

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pre-tax benefit deductions.

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This isn't really true. Self employment Ira, premiums are deductible to you, etc, etc.

bullshite. He can open a solo 401k or SEP IRA.

1. Take 1099 job
2. Don’t file taxes
3. Profit

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Does that still apply with the new tax changes? I am working contract for a company and inquired about writing off some of those expenses and was told that I wouldn't qualify anymore even though I work over 200 miles from my residence

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They're incorrect. Unremibursed business expenses have been eliminated as an itemized deduction. As a 1099 you would deduct on Schedule C as a business expense, not Schedule A as an itemized deduction subject to the AGI floor.

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Insight, tips for evaluating 1099 job

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Spend the money to sit down with a tax professional/CPA to work this out for your situation.

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Under the 2018 Solo 401(k) contribution rules, a plan participant under the age of 50 can make a maximum employee deferral contribution in the amount of $18,500. That amount can be made in pre-tax or after-tax (Roth). On the profit sharing side, the business can make a 25% (20% in the case of a sole proprietorship or single member LLC) profit sharing contribution up to a combined maximum, including the employee deferral, of $55,000. For plan participants over the age of 50, an individual can make a maximum employee deferral contribution in the amount of $24,500. That amount can be made in pre-tax or after-tax (Roth). On the profit sharing side, the business can make a 25% (20% in the case of a sole proprietorship or single member LLC) profit sharing contribution up to a combined maximum, including the employee deferral, of $61,000.

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solo 401k

I would be interested in how they characterize your employment as an independent contractor. Even money says they’re misclassifying the position itself as it should be considered a fulltime employee with a commission structure.

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makersmark1

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There is a 20 question test to see if you are a “contractor” versus “employee”.

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USDOL uses the, “three fold,” test. It’s much simpler obviously but similar. It is one of the single biggest issues facing taxing authorities for state workforce agencies. It really outsmart pressure on a segment of the lower end of your workforce.

Misclassifying employees increased their tax burden, gives them less actual employment security and robs state and local government of tax revenue. I understand that manpower is a huge issue and labor costs are always going to put pressure on Small and Medium sized businesses.

But the Law is the Law.

Here's a handy guide for a misclassified worker checklist/assessment:

Louisiana Workforce Commission - Missclassified Worker Assessment Tool

This shouldn't replace a review by your CPA-and potentially your attorney-to determine whether or not you should reclassify your 1099/contract employees.

But the last thing someone wants to do is get an audit from a Tax specialist with LWC's UI Tax Unit where they apply the three-fold test and determine you've misclassified 20 employees over the last two years and now have to pay up PLUS penalties and interest.

It's no bueno, I assure you.

ETA: The link isn't working, but if you copy and paste the URL into another version of your browser, it seems to work just fine? Not sure what the deal is.

I'm using Chrome, BTW.