familygal Posted January 27, 2021 Share Posted January 27, 2021 I am considering switching from W2 employee to independent contractor with my practice if I switch to part-time. How much money will I save them in payroll taxes, which, subsequently, I can negotiate into my pay rate? Employer would also no longer cover my malpractice, $2000/year CME, and professional certification/licensure. Employer does not, and has never, offered health insurance or 401k (it's a small, independently-owned private practice). I have worked for them full time for the past 7+years. I am considering returning part time after maternity leave and was thinking IC may be a good option so I can have flexibility with my schedule and also have the option to pick up shifts at an urgent care on weekends or help out with a hospice company from home during the week. My husband's job provides our health insurance and I contribute to my own retirement funds. IC is new to me so what other questions should I be asking myself to evaluate if this is the right fit for me? Thanks! Quote Link to comment Share on other sites More sharing options...
Administrator rev ronin Posted January 27, 2021 Administrator Share Posted January 27, 2021 In round numbers, at least 30% more. You probably need to ask an accountant. 1 Quote Link to comment Share on other sites More sharing options...
Moderator ventana Posted January 27, 2021 Moderator Share Posted January 27, 2021 part time is good I would suggest possibly doing a % of collections as a w-2 lessens liability to the employer of loosing money on you, but still makes you an employee might allow for a really nice hourly I am thinking of asking for 45% of collections and would settle for anything over 40% base rate then settle up monthly on the collections Quote Link to comment Share on other sites More sharing options...
familygal Posted January 27, 2021 Author Share Posted January 27, 2021 8 minutes ago, ventana said: I would suggest possibly doing a % of collections as a w-2 lessens liability to the employer of loosing money on you, but still makes you an employee Is staying an employee an advantage to me just because it simplifies my taxes? As of now, I get a monthly base salary plus 35% of my collections (whichever is higher). I suppose I could switch to PT at simply a higher rate of collections without a base (and no bennies?) Yes, talking to an accountant would be very helpful, which I would do. Thank you! Appreciate getting input on the end of how I should approach it with the employer Quote Link to comment Share on other sites More sharing options...
Cideous Posted January 27, 2021 Share Posted January 27, 2021 IRS is cracking down HARD on IC work for those that do not qualify...like most PA's. In California they pretty much came out and said no way. Just be careful, the last thing you want is trouble with the IRS. 1 1 Quote Link to comment Share on other sites More sharing options...
GetMeOuttaThisMess Posted January 27, 2021 Share Posted January 27, 2021 (edited) Let's keep this real simple. If you do not have absolute control over your work days (when you're on and off) then you do not qualify as an IC. You need to be able to say that you are available days such and such and not available on days such and such. As an IC, you're responsible as well for the full 15.3% of payroll taxes (you then would deduct these on your annual tax return) and figuring/paying estimated taxes at least quarterly. Edited January 28, 2021 by GetMeOuttaThisMess COrrection of percentage 1 1 Quote Link to comment Share on other sites More sharing options...
Administrator rev ronin Posted January 27, 2021 Administrator Share Posted January 27, 2021 37 minutes ago, GetMeOuttaThisMess said: ... and figuring/paying estimated taxes at least quarterly. Or if you work both W-2 and 1099, you can just have enough withheld per W-2 pay period, and that seems to satisfy the IRS, too. I never used to understand why anyone would use that "withhold X additional per pay period" box; now I do. Quote Link to comment Share on other sites More sharing options...
Cideous Posted January 28, 2021 Share Posted January 28, 2021 6 hours ago, GetMeOuttaThisMess said: Let's keep this real simple. If you do not have absolute control over your work days (when you're on and off) then you do not qualify as an IC. You need to be able to say that you are available days such and such and not available on days such and such. As an IC, you're responsible as well for the other 15.3% of payroll taxes (you then would deduct these on your annual tax return) and figuring/paying estimated taxes at least quarterly. PLEASE READ THIS OVER AND OVER AGAIN. THIS IS WHAT QUALIFIES YOU TO BE AN IC. IF YOU DO NOT MEET THIS REQUIREMENT, DO *NOT* TAKE PAY AS AN IC. YOR ARE ASKING FOR AN IRS INQUIRY.... Quote Link to comment Share on other sites More sharing options...
GetMeOuttaThisMess Posted January 28, 2021 Share Posted January 28, 2021 29 minutes ago, Cideous said: PLEASE READ THIS OVER AND OVER AGAIN. THIS IS WHAT QUALIFIES YOU TO BE AN IC. IF YOU DO NOT MEET THIS REQUIREMENT, DO *NOT* TAKE PAY AS AN IC. YOR ARE ASKING FOR AN IRS INQUIRY.... The financial responsibility actually lies with the employer for the individuals’ tax liability. I know this from when my last ED group tried to go this route. Quote Link to comment Share on other sites More sharing options...
Moderator ventana Posted January 28, 2021 Moderator Share Posted January 28, 2021 1 hour ago, GetMeOuttaThisMess said: The financial responsibility actually lies with the employer for the individuals’ tax liability. I know this from when my last ED group tried to go this route. yup - some pretty huge financial risk to employer for mis using the 1099 classification, but really limited risk to the employee, but not zero.... seems stupid why so many employers keep trying cause of the 4-5 I have heard of getting audited, they ALL lost. 1 Quote Link to comment Share on other sites More sharing options...
familygal Posted January 28, 2021 Author Share Posted January 28, 2021 Thanks for everyone's replies and thoughtful input. Sounds like this might not be the right path for me....will continue to explore Quote Link to comment Share on other sites More sharing options...
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