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2 FT Jobs W2+1099, Weird Taxes?


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So I'm working 2 full time gigs now (72-80hr/wk) while I try and figure things out in the COVID era. Neither job has any benefits, so I'm hoping to claim a ton of deductions with licensing, CME, masks/PPE, etc. Anyone have any tips on not getting audited, or just general tips for filing when you're both 1099 and W2? Should I bite the bullet and hire an accountant next year?

Edit: I know it's a weird time of the year for a tax question, but I've never worked 1099 before and pretty lost when it comes to how much $$ I should be keeping liquid for taxes each month.

Edited by EastCoastPA
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You absolutely do NOT need a coop (LLC).  There us no benefit in establishing one (unless you make enough to pay yourself and spouse a wage), and it offers absolutely zero liability protection against malpractice. 

Yes, you should have an accountant (a CPA, not just someone who 'does taxes'.)  

This can be a great way of doing things.  If you make enough with the W2 job to max out your payroll taxes then you will have your employer pay for half of that, and you only have to pay income tax with your 1099 income.  Plus you can deduct any and all expenses (CME travel/conferences, malpractice, mileage, etc) from your 1099 income.  

 

AND with the Trump tax cuts you get a 20% deduction from your 1099 taxes as well!

 

Edited by Boatswain2PA
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11 hours ago, Boatswain2PA said:

You absolutely do NOT need a coop (LLC).  There us no benefit in establishing one (unless you make enough to pay yourself and spouse a wage), and it offers absolutely zero liability protection against malpractice. 

 

not true

I have an LLC and there are MANY bennies (will not get into here) but with kids and expenses it is worth it.

Boats is correct on MEDICAL LIABILITY but this does not hold true for GENERAL LIABILITY and is also why I have one.....

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3 hours ago, ventana said:

 

not true

I have an LLC and there are MANY bennies (will not get into here) but with kids and expenses it is worth it.

Boats is correct on MEDICAL LIABILITY but this does not hold true for GENERAL LIABILITY and is also why I have one.....

Please name one benefit that someone making <$200k/year as a 1099 has by using a LLC versus just DBA.

 

And to the OP: This really isnt "weird taxes" for a CPA.  Many people have a W2 position and a side-gig, many of whom get paid as a 1099.  Very prevalent in construction or trades.  

Edited by Boatswain2PA
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1 hour ago, Boatswain2PA said:

Please name one benefit that someone making <$200k/year as a 1099 has by using a LLC versus just DBA.

 

And to the OP: This really isnt "weird taxes" for a CPA.  Many people have a W2 position and a side-gig, many of whom get paid as a 1099.  Very prevalent in construction or trades.  

employing family members, special tax incentives for savings, ability to do retirement for family employees, retirement vehicles available through Vanguard, general liability protection 

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A PA doesnt make enough to pay (and thus offer retirement) for their spouse/family and still pay themselves the REQUIRED reasonable salary (Which is why I asked about benefits for making <$200k). 

I know of no "special tax incentives for savings" that is exclusive to LLCs (either S or C corp), please enlighten us.

 

Retirement savings, whether through a personal IRA, or a SEP-IRA, are the same for a DBA as it is a LLC (unless you make enough to pay yourself the REQUIRED "reasonable salary" and have enough left over to pay a spouse to so scheduling, etc).

A LLC for doing IC medical work doesnt give you any general liability protection.  If you are sued, it is personal.  Furthermore, you personally OWN the LLC, so if a judgment is placed against you they can take any bank accounts in the LLCs name.

 

I have an LLC for my real estate business.  This allows some protection of my PERSONAL wealth if someone sues because of what my business does (ie: someone is injured on one of the properties owned by the LLC, they sue the LLC and not me). This doesnt apply for IC work.

 

If you have a medical locums company where you are contracting to send others then an LLC might provide liability protection, but I see no circumstance where an LLC would provide any personal liability protection for a contracting medical provider.

 

 

Edited by Boatswain2PA
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Appreciate all the info! I'm going to avoid the LLC as I'm well under 200 and probably not going to be able to keep up with the 2nd full time gig after the end of the year (hoping to find a better primary job), but I'll definitely hire a CPA and I upped my withholding at my W2 so I wont have to worry as much about the pretax income. Maybe if Trump is still here in 2021 I'll keep most of the withholding and get a nice payday.

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Boats. 
well never mind.  You are closed minded and unwilling to think there is a different answer then yours.  I personally derive benefits that far outweighs the tasks of keeping a Corp.  but go on your merry way please.  
 

and if there was no general liability protections from Corp them why do they exist. Business law 101... 

 

I’m out.  

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Personal attacks, from a moderator no less.

Nice.

Glad you personally derive from some LLC benefits.  Too bad you havent been able to explain what any of those are.

Obviously a LLC is a tool to limit liability, but it has to be used appropriately.  I see absolutely no way that forming an LLC limits any personal liability for someone doing contract work.  And you havent given any possible examples either.

Your advice seems to come from Failed Business models

 

 

 

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Simple...get a good accountant. I have had a mish-mosh of 1099 and W2 jobs for years, started my own clinic, and started 2 other businesses and my accountant has saved me lots of money and kept me out of trouble. Get a real CPA and not someone who does taxes. The money you spend will be well worth it.

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11 hours ago, Boatswain2PA said:

Personal attacks, from a moderator no less.

Nice.

Glad you personally derive from some LLC benefits.  Too bad you havent been able to explain what any of those are.

Obviously a LLC is a tool to limit liability, but it has to be used appropriately.  I see absolutely no way that forming an LLC limits any personal liability for someone doing contract work.  And you havent given any possible examples either.

Your advice seems to come from Failed Business models

 

 

 

please go look up general liabity - I even underlined it for you

That is one Corp benefit - think slip and fall by a patient - if you are a DBA you have PERSONAL LIABILITY and the protection to your personal assests is a CORP structure

As well Retirement benefits, pass through tax benefits of a Sub S, wirte offs, and Sub S seems to be less likely to get audited..... 

 

So if instead of holding to your point, you stopped and read my previous posts and then thought about it, instead of just typing the same thing "of that I am so smart and that Ventans knows nothing" you might actually learn something.....

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18 hours ago, EastCoastPA said:

Appreciate all the info! I'm going to avoid the LLC as I'm well under 200 and probably not going to be able to keep up with the 2nd full time gig after the end of the year (hoping to find a better primary job), but I'll definitely hire a CPA and I upped my withholding at my W2 so I wont have to worry as much about the pretax income. Maybe if Trump is still here in 2021 I'll keep most of the withholding and get a nice payday.

You’ll be sorry come tax time. I had W2 and 1099 I I come for 15 years. Lost very dime of the 1099 money to taxes and penalties.  Sat with an accountant my lawyer recommended   For the next 14 years I paid next to no taxes on the corporation I formed   Sit with an accountant now if only to get professional advice. It will be worth what ever it costs 

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21 hours ago, ventana said:

please go look up general liabity - I even underlined it for you

That is one Corp benefit - think slip and fall by a patient - if you are a DBA you have PERSONAL LIABILITY and the protection to your personal assests is a CORP structure

As well Retirement benefits, pass through tax benefits of a Sub S, wirte offs, and Sub S seems to be less likely to get audited..... 

 

So if instead of holding to your point, you stopped and read my previous posts and then thought about it, instead of just typing the same thing "of that I am so smart and that Ventans knows nothing" you might actually learn something.....

I understand general liability.  But there IS no liability that can be attributed to a LLC that is comprised of a single person practicing medicine as an IC.

Can you think of a single action that a LLc would protect an IC from?  Just name one and I will cede the point.  An IC provider's LLC won't be named in a slip-and-fall case. 

You mention retirement benefits again,  but only in vague terms.  Please educate us on what specific retirement vehicles are open to an LLC that a IC provider cant get on their own (Other than paying a family member and thus their retirement).

I'm open to learning, you just ain't teaching.

Edited by Boatswain2PA
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On 9/20/2020 at 8:06 PM, ventana said:

Yikes. 
hire a good accountant.  
to complex for here

you need to be paying quarterly withholdings and such. 
you likely need a Corp 

Having a Corporation allowed me to deduct business expenses like the cost of purchasing a car gas , matainance, insurance, cell phone, malpractice insurance,  computer, lab coats CME, journal subscriptions to name a few write offs 

 I’m sure an accountant would find more 

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7 minutes ago, VeryOldPA said:

Having a Corporation allowed me to deduct business expenses like the cost of purchasing a car gas , matainance, insurance, cell phone, malpractice insurance,  computer, lab coats CME, journal subscriptions to name a few write offs 

 I’m sure an accountant would find more 

All of those are deductible as a DBA as well.  There is no need to have a LLC for this.

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23 hours ago, Boatswain2PA said:

Please name one benefit that someone making <$200k/year as a 1099 has by using a LLC versus just DBA.

 

And to the OP: This really isnt "weird taxes" for a CPA.  Many people have a W2 position and a side-gig, many of whom get paid as a 1099.  Very prevalent in construction or trades.  

I imagine 2 full time means more than 200k/yr 1099, at least I would hope so. 

I have a full time job( 6 shifts/mo), a part time job( 3 shifts/mo), 2 per diem jobs, and teach.

I have 2 1099 positions and 3 W2 positions. I have an LLC and an accountant to figure out the quarterlies, state of WA business tax, deductions, etc. 

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20 hours ago, EMEDPA said:

I imagine 2 full time means more than 200k/yr 1099, at least I would hope so. 

Yes, but I think the OP has a W2 AND a 1099 job.  

If you make enough as a 1099 to pay yourself a reasonable salary (say $100k/year) after deductions then starting a LLC to pay a spouse for scheduling (etc) can be lucrative, especially if you want to max out two retirement accounts.  Of course that also depends on if your spouse has a another retirement account from their job.

Also, if the OPs W2 job has a 401K, then that limits options as well.

Edited by Boatswain2PA
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Definitely sub 200k, I'm new so I started the W2 in May (horrible, horrible salary / no benefits,, but I graduated in the shutdown so I counted myself lucky to be employed) and added the 1099 in early August. If I had both the full year I would definitely hit 200 (the 1099 UC pay is half decent). The 200k -might- come into play next year, but if I keep up 80 hours for more than 6 months into 2021 my wife will probably murder me even if I "pay" her my 1099 hourly 🙃

I don't think my car is going to last me through next year though, so if that's true about being able to deduct it then an LLC is sounding pretty nice, but something tells me I might get screwed on a tax audit doing that.

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better to write of mileage at 54 cents/mile than the car itself. To write off the price of the car you can ONLY use it for work. The mileage you can deduct forever at 54 cents/mile. I am driving up to 1600 miles some months for work so that is basically $900 mileage write off every month, around $11,000/yr. That buys a pretty nice car...

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You do NOT NEED AN LLC TO DEDUCT MILEAGE.  Just keep a log of when you drove where for your IC work (including meetings, interviews, CME, and work).

Emed is spot on.  While some read the IRS regs differently, almost everyone who does IC work deducts the $0.54/mile which can be a good savings.

I did that when I was an IC, but my real estate LLC owns a truck that has higher costs but I put on much lower miles on.  I know of one IC who deducts her lease for her high end German car because she has a short commute....just gotta see which would be best (dont lease!!!)

I assume you are working so much to get out of debt? 

Edited by Boatswain2PA
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2 hours ago, Boatswain2PA said:

I assume you are working so much to get out of debt? 

The goals were: get out of debt, get exp faster, transition to the better paying job without having to drop the first one initially. I'd be lying if I said I had a clear career path at this point though, not sure either job feels right, but I figure doubling down the experience for now will help me land something better in the next year or two. I'm starting to feel a lot more comfortable with the idea of 1099 thanks to everyone here, I could see myself staying on that path.

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14 minutes ago, EastCoastPA said:

The goals were: get out of debt, get exp faster, transition to the better paying job without having to drop the first one initially. I'd be lying if I said I had a clear career path at this point though, not sure either job feels right, but I figure doubling down the experience for now will help me land something better in the next year or two. I'm starting to feel a lot more comfortable with the idea of 1099 thanks to everyone here, I could see myself staying on that path.

That's awesome.  Being debt free is an amazing feeling.  Instead of working for the past (the stuff you have already bought), one who is debt free is working for the FUTURE.

Your goals sound right to me.  Make sure your wife is totally onboard with you working so much.  Few things in life are as expensive/painful as a divorce.

I was an IC for the first several years after graduating and took some bad advice from folks on the internet (including this board) and started an LLC for my IC business.  It didn't do me much harm other than the several hundred dollars in initial and annual filing fees, but I would eventually sit with a team of GOOD attorneys (including med-mal and business) who told me having a LLC for this was useless because the way a medical provider runs an IC business confers absolutely ZERO liability ONTO the business...it is ALL personal. 

When I discontinued that LLC and reverted back to being a DBA my CPA didn't care one bit.  My tax situation remained absolutely the same (allowed the same retirement plans, deductions, etc).

When you get some measure of wealth (and you will within a few years of being debt free), I recommend you spend some money (few thousand dollars) to find a good law firm and sit with them to discuss liability protection and whatever else concerns you and your wife have.  When we did this it was an eye-opener for us as we had risks where we didn't expect, and vice versa.  Find a law firm that doesn't advertise on TV/radio/internet/paper, yet has partners who specialize in areas you are concerned with (med-mal, etc).

Good luck!  

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On 9/23/2020 at 8:15 AM, Boatswain2PA said:


I was an IC for the first several years after graduating and took some bad advice from folks on the internet (including this board) and started an LLC for my IC business.  It didn't do me much harm other than the several hundred dollars in initial and annual filing fees, but I would eventually sit with a team of GOOD attorneys (including med-mal and business) who told me having a LLC for this was useless because the way a medical provider runs an IC business confers absolutely ZERO liability ONTO the business...it is ALL personal. 

When I discontinued that LLC and reverted back to being a DBA my CPA didn't care one bit.  My tax situation remained absolutely the same (allowed the same retirement plans, deductions, e

YMMV

my story is different and general liability as well as Corp retirement accounts made it beneficial for me to incorporate.  One difference is that true is I was (and still do) run a business not just IC.  If you are strictly doing work in someone else’s clinic, with their supplies, and their patients, and their staff then you likely have no general liability and might not gain the advantages that I experienced  Course then there is the IRS issue of 1099 status (minimal to no liability to employee-most liability is employer.)

 

 

 

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