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Anybody a tax accountant here?

Ns1

Ns1

No Lifer
What is a better strategy to minimize my taxes

Assume i'm in a <20% tax bracket


1. Work as an independent contractor

2. Create my own company (sole p.) and write off legitimate expenses


//edit

This is a perfectly legitimate question unless you people make it otherwise. AFAIK, if I work as a 1099 IC, I pay what, my own tax bracket + 15% FICA? If I work as my own company, I pay 35% but can write off expenses. Is that correct or is the 35% rate only applicable for corporations?
 
Do the calculation both ways and see which is best for you. My vote would be to file as an independent contractor because you can still write off expenses
 
beware of increased irs scrutiny as you offset income with expenses. now ask yourself is all that extra irs attention now and in the future worth whatt you think you are saving?
 
No but I stayed at a Holiday Inn Express last night. I did take some accounting in college and if you start a small company you can write off allot of taxes, especially if you show your business loss money. For everything you do that can be tied to the company keep the receipt and write on it a justification. Some examples include writing off a room in your house that you use as an office for the business, your computer, internet, phone, when you go out to eat leave a card or talk about your business and write that sh!t off, miles on your car, etc.
 
Originally posted by: NeuroSynapsis
What is a better strategy to minimize my taxes

Assume i'm in a <20% tax bracket


1. Work as an independent contractor

2. Create my own company (sole p.) and write off legitimate expenses


//edit

This is a perfectly legitimate question unless you people make it otherwise. AFAIK, if I work as a 1099 IC, I pay what, my own tax bracket + 15% FICA? If I work as my own company, I pay 35% but can write off expenses. Is that correct or is the 35% rate only applicable for corporations?
Click to expand...

You can write off expenses as a sole proprietor (1099). If you are talking about a C corp, you pay 35% when the corp makes money, then YOU pay taxes when you give yourself a salary, INCLUDING the corp paying FICA, AND you pay dividend taxes when you declare a dividend.

Consider LLC or S Corp. Sole P is easiest it's the same as flow through corps cept you have full liability (they can jack your house). So it all depends on how risky your field is.
 
The 15% FICA tax is on net income. Also, you get a tax on the FICA tax paid on that 1099 income when filing.

Expenses can be written off directly against 1099 income.vs having to get hit with the Schedule A and 2106 reductions.
 
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