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1099 pay

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RiddleEagle18

Well-known member
Joined
Jan 3, 2006
Posts
640
Any of you guys paid as contractors and get 1099's at the end of the year? Have you found any advantages in creating an LLC or something like that. What are you writing off? Cars, gas, health insurance premiums?
 
Any of you guys paid as contractors and get 1099's at the end of the year? Have you found any advantages in creating an LLC or something like that. What are you writing off? Cars, gas, health insurance premiums?

you can write a lot off, and you dont need an LLC to do so....car, gas, computers, web, phones, uniforms, tips overseas, etc etc.

If you have a decent amount of income as a 1099 you should get a pro to do your taxes, many of these things are borderline and a triggers for audits....which are getting more common as the IRS needs more money!

They can also advise you if creating and maintaining a company is needed, which is highly unlikely for most part-time contractors.
 
Any of you guys paid as contractors and get 1099's at the end of the year? Have you found any advantages in creating an LLC or something like that. What are you writing off? Cars, gas, health insurance premiums?

I know some guys who do this. As far as I can tell (and I'm no expert) there really aren't any tax advantages. When you're an employee, you pay 7.5% SS tax, and you're employer pays the other 7.5%. When you're under a 1099, you pay the entire 15%. When you're both the employer AND employee, such as when you create your own LLC, you ALSO pay both. Now, you can "delay" some compensation and thus reduce your tax liabilities, but in the end, you have to pay the tax.

The real difference is the liability. Say you crash a plane, I think you're a bit more insulated from lawsuits since you're an employee, and not a contactor. Again I am no expert, just my two cents.
 
I know some guys who do this. As far as I can tell (and I'm no expert) there really aren't any tax advantages. When you're an employee, you pay 7.5% SS tax, and you're employer pays the other 7.5%. When you're under a 1099, you pay the entire 15%. When you're both the employer AND employee, such as when you create your own LLC, you ALSO pay both. Now, you can "delay" some compensation and thus reduce your tax liabilities, but in the end, you have to pay the tax.

The real difference is the liability. Say you crash a plane, I think you're a bit more insulated from lawsuits since you're an employee, and not a contactor. Again I am no expert, just my two cents.

That's my impression, too. As far as the FICA, if you're paying for your "regular" job do you have to pay for your 1099 earnings, too? Can you file for a refund for the overpayment?

TC
 
That's my impression, too. As far as the FICA, if you're paying for your "regular" job do you have to pay for your 1099 earnings, too? Can you file for a refund for the overpayment?

TC


You do have to pay taxes on all income. If you have a blend of W2 and 1099 income, any overpayments from the W2s will offset any non-payment from the 1099s.
 
Thanks for the replies!! Couple more questions for ya.

Are health insurance premiums deductable?
Insurance on the truck or is that factored in by mileage?
 
If you are 1099, I am near certain you can write off 100% of you healthcare costs, including co-pays and Rxs. If you're W2, only if you're expenses are above a certain amount, 7% of gross income I think.
 
Thanks for the replies!! Couple more questions for ya.

Are health insurance premiums deductable?
Insurance on the truck or is that factored in by mileage?


If attempting taxes yourself, be REAL careful if you start playing with car usage, home office, computers, etc...a $500 CPA can save you a huge headache. Im not talking about the kiosk retards at the mall with laptops and turbotax...find a CPA that works with pilots/contractors. Find one willing to sit down with your for an hour or two (whatever) and knows your situation. The "drop all your stuff off" guys aren't worth anything.

Those items you mention, along with a 1099, are audit flags, and audits are on the rise these days.

And above all, for fuks sake don't get your tax advice on flightinfo.com. Thats downright scary...

:)
 
It's not that hard if your situation is simple: just do contract work, own one home, you keep good records and documents etc. I have done it both ways-turbo tax and tax services-and never had an issue<---- fingers are crossed!
 

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