Wife to work as a Contractor - Advice needed

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Type2Much
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Wife to work as a Contractor - Advice needed

Post by Type2Much » Fri Apr 11, 2014 9:44 am

All,

My wife graduated college in May ’13 & was pregnant at the time. She received a few different job offers w/ some large MegaCorp companies but due to a number of reasons we opted to turn them down. We were blessed with a perfectly healthy, beautiful baby girl in October & my wife has stayed home with our daughter since. My wife recently started applying again & has been offered a job working for another MegaCorp as a contractor. She will be working as an account coordinator in the Supply Chain/Operations group for a very large Oil & Gas company here in Houston. While there are some drawbacks from being hired as a contractor rather than FT employee, we believe the opportunity is worth it to get her career off to a good start. Having this type of experience & this company on her resume should benefit her further down the road. We are aware that her income will be greatly offset with the added expenses (daycare, commuting, time, etc), but we feel that will be the case with the majority of entry-level positions & she has to start somewhere.

I am posting this to accomplish a couple things: Get a better idea as to how to handle our families tax situation as well as figure out all the important details & questions to ask the employer in regards to working as a contractor rather than a FT employee.

My employer covers all of our families insurance needs & my 401K.

Tax Filing Status: Married Filing Jointly
State of Residence: TX
Age: Me 24/Her 22

My current salary is $55K (expecting a decent increase this summer) & my company matches 50% of my contributions up to 6%, so 3%, as well as a once a year profit sharing contribution (ranging anywhere from an additional 4-6% that will go straight into my 401K). As of right now, being in the 15% tax bracket, my 401K contributions are set to 7% on a ROTH basis & I have been maxing out my ROTH IRA as well.

My wife will not be able to participate in a 401K, but I was planning on increasing my contributions & converting them back to a traditional basis as well as start to max out a ROTH IRA under her name in addition to continuing maxing my ROTH IRA.

My wife will be paid $25/hr and expected to work a standard 40 hr-week (there may be some overtime opportunities as well). This rate (at 40 hrs/week @ 52 weeks/yr) annualizes out to $52K/yr which would move us into the 25% Federal tax bracket.

FWIW, my current W4 withholdings allowance is set at 5.
  • 1. How should we determine how much to withhold for taxes from my wife’s check? Are there any, convenient, online tools/calculators for this?
    2. Since she will work as a contractor, what expenses of hers (if any) are deductible? She will have typical commuting expenses (gas, tolls, depreciation, maintenance) as well as she will have to pay for her own parking as she will be working downtown. Is any of that deductible in her case? Otherwise, she will be using their office, computer, phones, etc.
    3. Do we have to pay her taxes quarterly?
    4. Should I adjust my withholdings allowance at all?
    5. Those who have experience working as a contractor in a situation similar to this, what sort of questions should we ask beforehand? I am a very thorough, detailed driven person, where my wife is a little more relaxed & plans to just figure everything out once she starts. I don’t want her to ask too many nit-picky type questions ahead of time but also don’t want to get any major surprises regarding both ours & their expectations once she starts (current start date is still a few weeks away). This was all set-up through a recruiter, up to this point, all communications back & forth have been done through the recruiter.
    6. Based on the information presented, should we open a tIRA or a ROTH IRA for her?
    7. If my employer allows a middle of the year change, I plan to contribute the full amount ($2500) to our DCA account for daycare expenses. We already take advantage of the FSA plan. Will her working as a contractor qualify as a life changing event? Daycare will cost us $250/week. Are there any other daycare related tax issues I may not be thinking of?
    8. Am I missing anything? Any other insight, advice, recommendations are very appreciated.
Many thanks in advance.

Best regards.

ieee488
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Re: Wife to work as a Contractor - Advice needed

Post by ieee488 » Fri Apr 11, 2014 9:49 am

Will your wife be working on a W-2 for a contracting company?

When I worked contract, I was still an employee. Just not an employee of the company that I was contracting at.
I hope that makes sense.

That contracting company had a 401K. I don't remember what the 401K match was.
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Type2Much
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Re: Wife to work as a Contractor - Advice needed

Post by Type2Much » Fri Apr 11, 2014 10:06 am

ieee488 wrote:Will your wife be working on a W-2 for a contracting company?

When I worked contract, I was still an employee. Just not an employee of the company that I was contracting at.
I hope that makes sense.

That contracting company had a 401K. I don't remember what the 401K match was.
Hmmm.. That is a good question and frankly I am embarrassed to say I am not 100% positive :oops: . I was under the assumption she would receive a 1099 from MegaCorp, but now I am thinking she possibly could receive a W2 from the company the recruiter works for.?.? :?: :?: :?:

Regardless, whether that makes any sense or not, I am going to have my wife call/email the recruiter to verify where her check will be coming from? If needed, I will edit my OP.

Thank you for the reply.

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Re: Wife to work as a Contractor - Advice needed

Post by Jack FFR1846 » Fri Apr 11, 2014 10:27 am

My dad, who owned his own business always pointed out to me that as a self employed person, you have the priviledge of paying both the employer and employee social security contributions.
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ieee488
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Re: Wife to work as a Contractor - Advice needed

Post by ieee488 » Fri Apr 11, 2014 10:34 am

Type2Much wrote:
ieee488 wrote:Will your wife be working on a W-2 for a contracting company?

When I worked contract, I was still an employee. Just not an employee of the company that I was contracting at.
I hope that makes sense.

That contracting company had a 401K. I don't remember what the 401K match was.
Hmmm.. That is a good question and frankly I am embarrassed to say I am not 100% positive :oops: . I was under the assumption she would receive a 1099 from MegaCorp, but now I am thinking she possibly could receive a W2 from the company the recruiter works for.?.? :?: :?: :?:

Regardless, whether that makes any sense or not, I am going to have my wife call/email the recruiter to verify where her check will be coming from? If needed, I will edit my OP.

Thank you for the reply.
Let us know what you find out.

I have also been in a situation where I received a 1099. That was for a very small start-up company.
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Type2Much
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Re: Wife to work as a Contractor - Advice needed

Post by Type2Much » Fri Apr 11, 2014 10:56 am

Jack FFR1846 wrote:My dad, who owned his own business always pointed out to me that as a self employed person, you have the priviledge of paying both the employer and employee social security contributions.
Yes, if she receives a 1099, I am planning to account for that, but that was part of my initial question, how much to expect to account for?
ieee488 wrote:Let us know what you find out.

I have also been in a situation where I received a 1099. That was for a very small start-up company.
Will do. I am eagerly awaiting a confirmation & hope to receive it before the weekend. I get the pleasure of leaving work now to attend a company-wide bowling charity event & get to spend the rest of the day out of the office enjoying company provided food & beverage. :sharebeer

Thanks for all the replies.

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Re: Wife to work as a Contractor - Advice needed

Post by mlipps » Fri Apr 11, 2014 11:07 am

The 1099 v W2 will make all the difference. If 1099, yes you'll need to make quarterly estimated ppayments, at least for the SS/Medicaid taxes.

If its a W-2, the IRS has a wonderful withholding calculator you can use to complete the W-4 correctly, as well as adjust yours if needed. You can also revisit it after you get your raise this summer to see if any changes are necessary.

Either way, commuting is not deductible. Everybody does it. If she goes from her office to a client site, that is business miles and would be deductible; from a Sch C if 1099 employee or Sch A if W-2.

jackholloway
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Re: Wife to work as a Contractor - Advice needed

Post by jackholloway » Fri Apr 11, 2014 11:11 am

I worked for a consulting firm and was paid salary, was part of the retirement plan, and was given a w2 at year end.

Many contractors at local tech firms are hourly, get a 1099 at year end. They also tend to be kicked out of company meetings, and must not have too much self direction. (If you select your own tasks and the company trains you and drives your career, you are an employee and get benefits.)

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Re: Wife to work as a Contractor - Advice needed

Post by Spirit Rider » Fri Apr 11, 2014 11:39 am

Type2Much wrote:My wife will not be able to participate in a 401K, but I was planning on increasing my contributions & converting them back to a traditional basis as well as start to max out a ROTH IRA under her name in addition to continuing maxing my ROTH IRA.
If she is paid via a 1099, she is self employed and can open her own solo 401k.
  • 1. Your joint federal tax liability will increase by the marginal rate of her additional income. Based on your description; some of this will be at 15% and some at 25%. If she is paid via 1099, you will also have to pay 15.3% SE Tax.
    2. It doesn't sound like she will have very many deductible expenses
    3/4. You can pay her tax liability with quarterly estimated taxes, Increased withholding (fewer exemptions/additional paycheck allotments), or a combination of the two.
    5. The KEY question resolves around the W2/1099 question. This directly impact the value of her contact rate.
    6. It is up to you to decide which is more valuable to you tax deferral or tax-free. For example, you could use tax deferral to limit taxes at the 25% marginal rate.
    7. You really have to ask your company.
    8. Many companies offer contact jobs at what essentially are equivalent level compensation. There should be a real premium for a contract job (at least 25% 1099, at least 10% W2)

obgraham
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Re: Wife to work as a Contractor - Advice needed

Post by obgraham » Fri Apr 11, 2014 4:05 pm

Not an expert on this, but:

How is MegaCorp hiring this person as a contract worker, when she is not in fact an Independent Contractor, at least in the eyes of the IRS. She is working only for one firm, and they have set out the conditions of work, hours, and location. Around here, many such cases have been thrown out and the worker deemed to in fact be an employed worker.

The main reason MegaCorp wants to do it, of course, is to lessen their liability for paying benefits. At the worker's expense.

ieee488
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Re: Wife to work as a Contractor - Advice needed

Post by ieee488 » Fri Apr 11, 2014 4:32 pm

obgraham wrote:Not an expert on this, but:

How is MegaCorp hiring this person as a contract worker, when she is not in fact an Independent Contractor, at least in the eyes of the IRS. She is working only for one firm, and they have set out the conditions of work, hours, and location. Around here, many such cases have been thrown out and the worker deemed to in fact be an employed worker.

The main reason MegaCorp wants to do it, of course, is to lessen their liability for paying benefits. At the worker's expense.
If she is indeed becoming an employee of the recruiting firm but working at MegaCorp, she may get some benefits.
The benefits won't be as good as MegaCorp's.
I did receive some benefits when I worked contract. I had 6 paid holidays a year as I recall - New Year's Day, Memorial Day, Fourth of July, Labor Day, Thanksgiving Day, and Christmas.
I also did have a 401K with a match. No medical insurance.
They eventually stopped matching the 401K with each paycheck and changed to matching at year end just like IBM's new policy.
The one good thing about being contract employee is that you get paid for overtime but at 1x not 1.5x.
Last edited by ieee488 on Fri Apr 11, 2014 4:45 pm, edited 1 time in total.
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Re: Wife to work as a Contractor - Advice needed

Post by placeholder » Fri Apr 11, 2014 4:44 pm

That was my first thought on reading it the second being that it was a terrible rate for a contract worker.

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Re: Wife to work as a Contractor - Advice needed

Post by englishgirl » Fri Apr 11, 2014 5:08 pm

Yes, for a contractor that rate is low. It really grinds my gears that companies can get away with this - make you work a 40 hour week and treat you like an employee, and yet, give you no benefits and make you responsible for ALL of your own taxes. Ugh.

Sorry, that was not constructive. And what is she going to do if this is her best offer? It's not like she is in a great bargaining position.

Anyway, if she is not going to be an employee of the recruiter OR megacorp, then she will be able to deduct more. I have had an accountant tell me that 1099's can deduct commuting expenses, because they are not employees and they are driving to a consulting gig. But I want to check that out further. Also look into continuing education expenses, any expenses for setting up accounting for herself, even uniforms.

My first year as a 1099, I did not deduct taxes quarterly, but then I also had a W2 job, and I had left $1000 of my prior year's tax return sitting there as an estimated payment. I set aside about 25% into a savings account because I just didn't have a clue. At the end of the year, I owed, but I only owed like 10% of my 1099 income and Turbotax gave me a recommendation of what to pay quarterly in estimated taxes for the next year. I think there are provisions regarding no penalty for lack of quarterly payments if it's the first year, or if you withhold 100% of the taxes owed the previous year. You'd have to look them up, as every time I read them they make my head spin, so I can't keep the details straight.

If she doesn't have access to a retirement plan at work, then she could do a TIRA and the income limits for it being tax deductible are higher than for someone who does have access to a plan at work. With you being covered at work with a 401k, your modified AGI for married filing jointly that you can make and still be able to deduct her TIRA is $181000 for 2014. Once she opens something like a SEP-IRA or 401k, then she's got a work plan, so that changes things.
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Re: Wife to work as a Contractor - Advice needed

Post by BradMajors » Fri Apr 11, 2014 10:30 pm

If she is a contractor she will sign a contract with the Megacorp. For her protection, she should not personally sign the contract. The contract should instead be between Megacorp and her company. Has she obtained a business license and any other permits for her company? What are the terms of her contract? Have you had a lawyer review it?

She will not be able to deduct commuting expenses. She must pay estimated taxes or she will owe a penalty. She can contribute to a SEP-IRA and should definitely not open a 401(k).

By your description it seems that she is not a contractor, regardless of whether or not she is paid on a 1099.

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Re: Wife to work as a Contractor - Advice needed

Post by Jack » Sat Apr 12, 2014 12:37 am

She will not be able to deduct commuting expenses unless she has a home office. If she is not working from home, then her place of business is the place she works. You can't deduct commuting expenses to your place of work, the same as a regular employee, although she can deduct travel expenses if she is required to go to other job sites from her regular office.

If she has a home office, then her place of work is home and she can deduct travel expenses from her home office to other job sites.

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Re: Wife to work as a Contractor - Advice needed

Post by Saving$ » Sat Apr 12, 2014 1:28 pm

Jack wrote:She will not be able to deduct commuting expenses unless she has a home office. If she is not working from home, then her place of business is the place she works. You can't deduct commuting expenses to your place of work, the same as a regular employee, although she can deduct travel expenses if she is required to go to other job sites from her regular office.

If she has a home office, then her place of work is home and she can deduct travel expenses from her home office to other job sites.
But there is a limitation on that also. Look it up, but if the assignment is for more than 6 month, and you know that at the start, then you can't deduct the commuting. If the assignment is for 6 months or less, and is unexpectedly extended, I think you can deduct for up to a full year total, but not after that.

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Re: Wife to work as a Contractor - Advice needed

Post by pshonore » Sat Apr 12, 2014 2:12 pm

Saving$ wrote:
Jack wrote:She will not be able to deduct commuting expenses unless she has a home office. If she is not working from home, then her place of business is the place she works. You can't deduct commuting expenses to your place of work, the same as a regular employee, although she can deduct travel expenses if she is required to go to other job sites from her regular office.

If she has a home office, then her place of work is home and she can deduct travel expenses from her home office to other job sites.
But there is a limitation on that also. Look it up, but if the assignment is for more than 6 month, and you know that at the start, then you can't deduct the commuting. If the assignment is for 6 months or less, and is unexpectedly extended, I think you can deduct for up to a full year total, but not after that.
I don't believe there's a limit for a self-employed person who has a home office. However I doubt OP's wife would qualify for a home office.

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Re: Wife to work as a Contractor - Advice needed

Post by Peter Foley » Sat Apr 12, 2014 4:57 pm

obgraham wrote:
How is MegaCorp hiring this person as a contract worker, when she is not in fact an Independent Contractor, at least in the eyes of the IRS. She is working only for one firm, and they have set out the conditions of work, hours, and location. Around here, many such cases have been thrown out and the worker deemed to in fact be an employed worker.

The main reason MegaCorp wants to do it, of course, is to lessen their liability for paying benefits. At the worker's expense.
There are a bunch of issues here. The degree of direction and control is a key factor in determining whether one is an employee or independent contractor. Space is an issue, materials/tools used on the job etc. The ability to offer one's services to a number of employers is also a key issue. The IRS has a list of standards as does each state. The IRS is interested as well as the Unemployment Insurance program in each state. I worked in Unemployment Insurance and had a staff of 30 auditors who audited employer payrolls and determined "worker Status". Englishgirl is correct, there is a lot of abuse of the independent contractor status, but "employees" are fairly powerless.

I would suggest that you use the IRS tables to calculate your wife's withholding.
My wife works as an independent contractor (a real one, one who can choose to accept a particular assignment or not). I simply increased my withholding to be able to cover the taxes she would owe on her income.

If you are not going to set a lot of money aside for retirement, a SIMPLE IRA is easy to set up. One can defer about $12,000 in income. Also note that health insurance is a deduction if you are self employed.

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Re: Wife to work as a Contractor - Advice needed

Post by lululu » Sun Apr 13, 2014 6:55 am

Contractors are normally paid significantly more than regular employees, because the contractors have to pay for their own benefits and, theoretically, have less job security.

Your wife has to pay attention to her salary. She is probably happy that Megacorp wants to hire her and thinks well of them, meanwhile they are trying to take advantage of her. If she doesn't develop a (polite) hard nose about her salary, she will be taken advantage of long term. That's no way to run a career or a family's financial security.

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Re: Wife to work as a Contractor - Advice needed

Post by desertbandit442 » Sun Apr 13, 2014 2:04 pm

This always worked for us, when my wife worked as an "independent contractor;" she put 50 percent of her earnings in a separate account to fund federal taxes, state taxes, self-employment taxes, and a SEP IRA. This always kept us out of any tax trouble/shortages and funded an IRA for her. Since you have no state income taxes in Texas, I would think setting aside 40-45 percent of her income for the year would cover her taxes and IRA.

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Re: Wife to work as a Contractor - Advice needed

Post by tibbitts » Sun Apr 13, 2014 2:52 pm

lululu wrote:Contractors are normally paid significantly more than regular employees, because the contractors have to pay for their own benefits and, theoretically, have less job security.

Your wife has to pay attention to her salary. She is probably happy that Megacorp wants to hire her and thinks well of them, meanwhile they are trying to take advantage of her. If she doesn't develop a (polite) hard nose about her salary, she will be taken advantage of long term. That's no way to run a career or a family's financial security.
Having worked as both employee and contractor, I don't think employers try to take advantage of one type of worker more than another. But they do try to use the type of labor that will be most advantageous to them. One of the biggest differences in contract vs. employee wages is that as a contractor, you get repriced periodically. For example, on one contract my rate was cut 6% when my 6mo contract was renewed. The company was doing extremely well, and they were happy with my work. That usually doesn't happen with employees, except during somewhat extraordinary times (if the business isn't doing well.) Other contracts I've worked on a daily or weekly basis had even more frequent repricing.

I've been "hard nosed" in contract negotiations too, but you have to understand that part of that is understanding that you the other party might choose to break off negotiations at any time. I've experienced this. The other party just feels like you won't be happy working for $x less than you're asking for, so literally they cut off communication. You don't get another chance. People will tell you that never happens, and that "there's no harm in asking", but I've seen it happen, so I know it does.

My guess is that on this forum, you're going to find a disproportionate percentage of contractors whose services are less "commodity" than typical. So you have to judge replies like this in that context. Ordinary contractors just don't have a lot of bargaining power if there are ten other contractors waiting in line to do the same work. Some employers are a little pickier about employees than contractors, because if they don't like a contractor, it's easier to get rid of the contractor vs. an employee. So you might actually have more bargaining power if an employer has made you an employment offer vs. a contract offer, because the employer has determined that overall, you're a good fit for the organization. With a contractor, it's more about just finding someone who can do the work, and the employer might be more likely to just move on to the next person on the list if you don't like the terms as presented.

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Re: Wife to work as a Contractor - Advice needed

Post by ralph124cf » Sun Apr 13, 2014 4:03 pm

I would like to expand on what Peter Foley said.

There are two basic ways to pay taxes during the year: W-2 withholding and Quarterly estimated tax deposits. Either way, the government wants it's money pretty much as you earn it, not just at the end of the year.

Since you file jointly, it is perfectly OK for you to have your employer withhold extra tax from your pay to cover the additional tax due instead of filling out the estimated tax forms. You still have to make a reasonably accurate estimate of the total taxes due for the year (including Social Security if your wife will be paid via 1099), but then file a new W-9 form with your employer to have the extra taxes withheld from your paycheck. Note: This only applies if your wife gets a 1099, not a W-2.

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Re: Wife to work as a Contractor - Advice needed

Post by pinhead » Sun Apr 13, 2014 10:03 pm

Been contracting for over 7 years....most likely its not the MegaCorp that is lowballing her but the recruiting company that placed her there.
MegaCorp is probably paying Recruiting Company somewhere around $60/hr or more.

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Re: Wife to work as a Contractor - Advice needed

Post by technovelist » Sun Apr 13, 2014 10:08 pm

I am now a contractor, part-time, for my previous employer. The contract is between my closely-held corporation and my ex-employer. Such an arrangement has a lot of advantages, especially with regard to options for retirement accounts that aren't available otherwise.
In theory, theory and practice are identical. In practice, they often differ.

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Re: Wife to work as a Contractor - Advice needed

Post by Spirit Rider » Sun Apr 13, 2014 10:33 pm

technovelist wrote:I am now a contractor, part-time, for my previous employer. The contract is between my closely-held corporation and my ex-employer. Such an arrangement has a lot of advantages, especially with regard to options for retirement accounts that aren't available otherwise.
Exactly what retirement account option is available to a closely-held corporation that is not available to a sole proprietor?

Since the following are available to both:
1. Defined Benefit Plan
2. 401k Plan
3. SIMPLE IRA
4. Profit Sharing Plan
5. SEP IRA

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Re: Wife to work as a Contractor - Advice needed

Post by technovelist » Sun Apr 13, 2014 10:45 pm

Spirit Rider wrote:
technovelist wrote:I am now a contractor, part-time, for my previous employer. The contract is between my closely-held corporation and my ex-employer. Such an arrangement has a lot of advantages, especially with regard to options for retirement accounts that aren't available otherwise.
Exactly what retirement account option is available to a closely-held corporation that is not available to a sole proprietor?

Since the following are available to both:
1. Defined Benefit Plan
2. 401k Plan
3. SIMPLE IRA
4. Profit Sharing Plan
5. SEP IRA
I have a Profit Sharing Plan and Trust, which I have been given to understand was more flexible due to its being a corporate plan. Perhaps this is wrong, and sole proprietors can do the same.
In theory, theory and practice are identical. In practice, they often differ.

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Re: Wife to work as a Contractor - Advice needed

Post by ieee488 » Mon Apr 14, 2014 6:56 am

pinhead wrote:Been contracting for over 7 years....most likely its not the MegaCorp that is lowballing her but the recruiting company that placed her there.
MegaCorp is probably paying Recruiting Company somewhere around $60/hr or more.
The recruiting company's take is usually about 2x.

When I was contracting in 2003, I was paid $X. It is still $X now or even less.

For people who are complaining about "lowballing", they should try looking for a job these days.
The job market is totally a buyer's market.
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Re: Wife to work as a Contractor - Advice needed

Post by tibbitts » Mon Apr 14, 2014 7:45 am

ieee488 wrote:
pinhead wrote:Been contracting for over 7 years....most likely its not the MegaCorp that is lowballing her but the recruiting company that placed her there.
MegaCorp is probably paying Recruiting Company somewhere around $60/hr or more.
The recruiting company's take is usually about 2x.

When I was contracting in 2003, I was paid $X. It is still $X now or even less.

For people who are complaining about "lowballing", they should try looking for a job these days.
The job market is totally a buyer's market.
My rate the past few years has been the same or less (nominally) as in 1992, even with no intermediary involved. Agreed about the job market. It's extremely difficult for the average person to find work of any kind, and has been for a very long time.

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Re: Wife to work as a Contractor - Advice needed

Post by tibbitts » Mon Apr 14, 2014 7:55 am

technovelist wrote:I am now a contractor, part-time, for my previous employer. The contract is between my closely-held corporation and my ex-employer. Such an arrangement has a lot of advantages, especially with regard to options for retirement accounts that aren't available otherwise.
I'm not aware of any retirement account advantages, although there may be advantages in terms of modest liability protection, and in theory being taxed as an employee of your own corporation can offer tax advantages (partly being paid in dividends vs. salary, for example.) In my experience it's often a (possibly misguided) requirement from the hiring company that drives the creation of a separate business entity. Beware that for the typical contract, say $50k/year, the overhead of being an employee of your own company (vs. say, being an LLC taxed as an proprietorship or partnership) may not be even close to worth any tax advantages. The typical self-employed person, no matter what the business organization, has far more deferred space available than (s)he can possibly fund in any year.

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Hayden
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Re: Wife to work as a Contractor - Advice needed

Post by Hayden » Mon Apr 14, 2014 8:43 am

ieee488 wrote:
pinhead wrote:Been contracting for over 7 years....most likely its not the MegaCorp that is lowballing her but the recruiting company that placed her there.
MegaCorp is probably paying Recruiting Company somewhere around $60/hr or more.
The recruiting company's take is usually about 2x.

When I was contracting in 2003, I was paid $X. It is still $X now or even less.

For people who are complaining about "lowballing", they should try looking for a job these days.
The job market is totally a buyer's market.
This is not true in my industry. In the distant past, companies would make 2x. Today, it is no where near that number.

tibbitts
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Re: Wife to work as a Contractor - Advice needed

Post by tibbitts » Mon Apr 14, 2014 6:02 pm

Hayden wrote:
ieee488 wrote:
pinhead wrote:Been contracting for over 7 years....most likely its not the MegaCorp that is lowballing her but the recruiting company that placed her there.
MegaCorp is probably paying Recruiting Company somewhere around $60/hr or more.
The recruiting company's take is usually about 2x.

When I was contracting in 2003, I was paid $X. It is still $X now or even less.

For people who are complaining about "lowballing", they should try looking for a job these days.
The job market is totally a buyer's market.
This is not true in my industry. In the distant past, companies would make 2x. Today, it is no where near that number.
That's probably true; I don't know that the average was ever 2x, but these days it seems like the markup is lower.

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