costs of being self-employed

[dquan97]

My wife has the choice of being paid as an employee vs. as a consultant (self-employed). The pay is the same: $9.50/hr. What are the additional costs of being self-employed? I understand that she'll have to cover the entire 15% cost of SS & FICA, instead of 7.5%, but is that it?

Any benefits of choosing to be self-employed?

 

[Descartes]

There are a lot of benefits to being self-employed, but for $9.50/hr? You'll have a lot more than 15%, and how much depends on how you handle your taxes (incorporated vs. llc, stick with 1099, etc.).

 

[vi edit]

Benefits include home office deduction(HUGE) and writing off vehicle milage and expenses.

 

[xchangx]

I would think benefits such as medical insurance, retirement plans, etc..

 

[kranky]

I assume that if the pay is the same, then there aren't any benefits included.

Check here for some information.

 

[dquan97]

Originally posted by: kranky
I assume that if the pay is the same, then there aren't any benefits included.

Check here for some information.

Great info there!

I dont think it's worth it for her to go through the trouble setting up her own business for $9.50. Looking at that test, what she does certainly looks and feels more like being employed instead of a contractor.

 

[MacBaine]

Originally posted by: dquan97

Originally posted by: kranky
I assume that if the pay is the same, then there aren't any benefits included.

Check here for some information.

Great info there!

I dont think it's worth it for her to go through the trouble setting up her own business for $9.50. Looking at that test, what she does certainly looks and feels more like being employed instead of a contractor.

You can get more than (or as much as) $9.50 an hour working most part time jobs...

 

[Christoph]

As a consultant with her own business, she may be able to write off business-related expenses such as
- business phone and isp
- business use of her car
- computers and other equipment

If she will be working from home, she may be able to take a home office deduction.

Additional costs of self-employment:
- no health care
- no paid holidays
- no paid sick time
- no paid vacation
- generally don't qualify for unemployment

With no difference in the rate, I don't see how it could possibly be worth it to consult.

 

[toekramp]

Originally posted by: Christoph
As a consultant with her own business, she may be able to write off business-related expenses such as
- business phone and isp
- business use of her car
- computers and other equipment

If she will be working from home, she may be able to take a home office deduction.

Additional costs of self-employment:
- no health care
- no paid holidays
- no paid sick time
- no paid vacation
- generally don't qualify for unemployment

With no difference in the rate, I don't see how it could possibly be worth it to consult.

agreed, i'm currently a constultant...if they offered me 60% of what i make now to be a full time employee i would take it.