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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[1]
https://u2206659.ct.sendgrid.net/ls/click?upn=SJEG7TF39YLaAIMD0HhsfJkjrxUKkKXCH0UcDCU0jN2SaWJXsnatdggtYeM7CerI81QtL3mOwSy5zWJnIHoBPA-3D-3DLaS4_o-2BjQxMsWfboH-2B-2BcY2qb3IYCoqvthnvff9ftZz0pNEJ2tF1jbVlVBtrlaPYq4av3GGkt2eseCzkoQM0e2-2FxhsxjlIL3n-2FcbRLJt-2BYPG310KzZFV9HH8OIbe58dEvp27Y5YF76VJAY8-2B1xsqlLPNrY-2FdgsoRBYeX8bIjEB5Qxs82ZhFlGyAmjtYRggN5uAeMsxCwOSXtvVEMsISoeJ7LtuADagHIBsaurJBlVbF7K4tgA-3D
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