I got laid off last Friday, but I was in the middle of a couple big projects. They want me to work on various projects as a freelancer until I find a new full-time job. My old boss said I need to file a DBA so they don’t get in trouble for payroll tax evasion. After looking up some information it doesn’t seem like a DBA is what I need…
That’s just one link I found information. I don’t even want to work under an assumed name. Anyone have any idea what i should be doing as a new freelancer so everything remains kosher with the IRS? Thanks!
llc that shit and write everything off ftw lol
and ensure you are charging them at least twice what you were making before
eg: if you were making $50,000 a year, thats $25/hr roughly, charge at least $50/hr
I was making less than $50k a year, but I am charging $50/hour now
I think an LLC might be too much for now as I’m not even sure how long I’ll be doing freelance. I want a full-time job somewhere where I know what I’ll be paid every month. Plus the LLC costs a lot more money to get…
Tell him to 1099 you. No need for an LLC or DBA.
Either 1099 or Sole Propreitership at the end of the year …
I think the problem with doing that is that I was a former employee, and I guess it could look suspicious to the IRS if I used to work full time and now they are paying me as a contractor. Could look like they are trying to avoid payroll taxes.
No. The IRS will go after you. Self-employment tax and "payroll" (FICA) tax are, for all intents and purposes, equivalent. If you are not on payroll, then the IRS will not go after them for payroll tax. They will go after you for self-employment tax. They will also, of course, go after you for income tax, which is separate from SE/FICA tax.
The two taxes, SE or FICA, are just for paying your dues to Social Security and Medicare. By 1099-ing you, your boss would be passing the buck onto you to pay it. Calling yourself an LLC isn’t going to change this. The IRS will still want that money from you either in the form of SE or FICA, depending on how you file.
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No. The IRS will go after you. Self-employment tax and "payroll" (FICA) tax are, for all intents and purposes, equivalent. If you are not on payroll, then the IRS will not go after them for payroll tax. They will go after you for self-employment tax. They will also, of course, go after you for income tax, which is separate from SE/FICA tax.
The two taxes, SE or FICA, are just for paying your dues to Social Security and Medicare. By 1099-ing you, your boss would be passing the buck onto you to pay it. Calling yourself an LLC isn’t going to change this. The IRS will still want that money from you either in the form of SE or FICA, depending on how you file. |
and the self employment tax is