- quote -

If you are properly licensed by the city and state you
operate out of or in, I would simply point out to the
contractor that you are no different than the local plumber
he would call in...you wouldn't pay him on a W-2. You may
also want to point out that you will save him money on his
federal employment taxes, unemployment contributions and
workers comp. If it is a prevalent problem, you may even
have a statement prepared by your CPA/EA explaining your
situation with a few references listed...that is something
he could follow-up on through your accountant or his own.

Good Luck

Mike

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nospam[at]stopspam.com (Dan) wrote:

- quote -

Clients are all over the place in what they're willing to
accept. Another common variation is a client that won't do a
1099 for anybody: unless you're incorporated, you have to be
paid on a W-2 arrangement.

- quote -

The big one I see is segregating expenses. Expenses for W-2
work are employee business expenses and flow to Schedule A,
not Schedule C. If you have expenses that are shared between
different jobs, you may have to allocate them.

- quote -

Yes, the main risk for a client is improperly classifying
you as a contractor when the facts of the situation make you
out to be an employee, or (less often) vice versa. What they
will or won't do depends on how they perceive that risk.

--
Chris Green

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I am an electronics engineer who was laid off as of
3/7/2003. After a period of no work, I did a short contract
job for a company where I was paid without tax withholding
(1099). The agency would not do a W-2 working relationship.
I am now looking at another contract job but they insist on
a W-2 arrangement. I live in Illinois and the 1099 contract
was in Wisconsin if it matters.

I have an established (10 yrs old) sole proprietorship
business that I have used for part time contract work. All
the part time work was done on a 1099-like arrangement but
no 1099s were filed. I reported all income and paid all the
self employment taxes. I am planning on filing the recent
1099 contract income through this business on a Schedule C.

What tax issues are there when I do a mixture of 1099 and
W-2 contract work?

Some agencies insist on 1099, others insist on W-2 and some are
willing to set it up however I like. Is this proper?

Thanks in advance...

Dan.

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