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Employee benefits at AT&T?

Benefits of being a 1099 employee: are there any?

  • Here's my situation: was in fortune 500 sales for last 10 years; laid off twice since 2009 (just my luck); want to return to sales but like security of working for company with >100 people (benefits, bonus checks, 401k match, etc.). until that time, though, a friend of mine started a medical distributorship company and wants me to market a product of his, of which I'll collect 15% of the sale. I'll be a "1099" employee if/when I decide to do it. Here are my questions: 1) can I be a 1099 employee AND work a regular job (provided the time allows)... this doesn't screw anything up when tax time rolls around, right? 2) are there any benefits to being a 1099 employee... like being able to write off lunches at client's offices or trips to conventions for my customers or owning my own automobile? I don't know the degree to which the tax benefits will help or hurt me. My wife is an accountant but much, MUCH more, intellectually gifted than me (we're really night and day by most people's standards, and this definition isn't from her adoring husband, it's based on her advanced schooling and those grades associated with such). Anywho, I zone out when she starts talking about taxes and stuff like that, mainly because she's not on my "commoner" level. My hope is that I can get some down-to-earth guidance on what all is involved with 1099 stuff. PS, I don't consider anyone who replies a "commoner," as I'm about as common as a person can get. Any help appreciated... websites, discussion groups, personal experiences, etc.

  • Answer:

    There's no such thing as a "1099 employee." If you are in sales, you may be considered a "statutory employee" or a "statutory nonemployee." If you are doing direct sales and the contract you signs states the same, you are not an employee for any federal tax purpose. Being paid on a 1099-Misc means that YOU are responsible for everything. That means you have to pay for insurance on your own, plan for any time you aren't being paid (you can't get unemployment while you are direct selling or when you stop direct selling) and expect 30% to go to taxes. 15% for income tax (though your rate may be higher) and 15.35 for SE tax.

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No one can be a "1099 employee". A 1099 worker is, by definition, an "independent contractor" and not an "employee". You can be a 1099 worker (just not an employee) at one company and a regular W-2 employee at another at the same time. You are not allowed to write off anything merely because you own an automobile. You may be able to write off some things if you use the automobile for work. You can no longer write off the full cost of lunches under any circumstances. When a write off is allowed, it is usually only 1/2 the cost.

StephenWeinstein

the main thing about being 1099 is saying that the employer is paying you cash outright and has not taken out any taxes at all. You will owe all the taxes due on that at tax time. If you work a regular job and get your regular W-9 at the end of the year, this will offset it some. Just remember, 1099 means that it is money that the IRS knows that you made that you didn't pay them for. You can talk to your wife about doing quarterly payments (940?) so that you don't get hit all at once at tax time. Good Luck!

Kim H

You can be self employed and work another job. You have to file a schedule C and SE at tax time. You keep track of your income and subtract your expenses. You can deduct some entertaining but not necessarily 100%. You need to pay 15.3% in self employment taxes and your applicable federal and state taxes. IF you make a lot of money you will need to do estimated quarterly payments. If you and your wife have regular jobs you can adjust your W4's to take out some additional taxes to cover some or all of the taxes due for your 1099 income. You will face penalties if you $1000 or more at tax time.

travelguruette

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