Please help! Should i take pay on w2 or 1099 from a family friend owned consultancy

[mummadi]

Hi. I am on H-4 EAD.  I work on c2c mode for an employer who is a family friend.   

Billing rate $66.  90-10 ratio lo we agreed. So na pay approximately $59.  

After vendor pays my employer and after 90-10 split ayyaka, Let's say $8000 ravali naku 2 months ki.

 

Case 1:  He's offering to give $8000 entirely on w-2.

Case 2:  He's offering $4000 on w-2 and $4000 on 1099.  He mentions this is advantage for me.  

3 questions:

1. Can anyone help me explain case 2 ela better avthundi naku?  
2. Do i need to open LLC or ala in this scenario? or NOT mandatory ?
3. One more thing, That $8000 is somehow consistent even in both cases if you see. But case 2 lo he's not running payroll taxes. Mari 90-10 split enduko?

 

Thanks bhayyas. 

 

[mettastar]

16 minutes ago, mummadi said:

Hi. I am on H-4 EAD.  I work on c2c mode for an employer who is a family friend.   

Billing rate $66.  90-10 ratio lo we agreed. So na pay approximately $59.  

After vendor pays my employer and after 90-10 split ayyaka, Let's say $8000 ravali naku 2 months ki.

 

Case 1:  He's offering to give $8000 entirely on w-2.

Case 2:  He's offering $4000 on w-2 and $4000 on 1099.  He mentions this is advantage for me.  

3 questions:

1. Can anyone help me explain case 2 ela better avthundi naku?  
2. Do i need to open LLC or ala in this scenario? or NOT mandatory ?
3. One more thing, That $8000 is somehow consistent even in both cases if you see. But case 2 lo he's not running payroll taxes. Mari 90-10 split enduko?

 

Thanks bhayyas. 

 

Additional overhead .. you need to pay taxes on other 4k .. like unemployment taxes etc .. 

[mettastar]

Ayina 59 ante more than $9k ravali kada

[ImprovedLokesh]

26 minutes ago, mummadi said:

Hi. I am on H-4 EAD.  I work on c2c mode for an employer who is a family friend.   

Billing rate $66.  90-10 ratio lo we agreed. So na pay approximately $59.  

After vendor pays my employer and after 90-10 split ayyaka, Let's say $8000 ravali naku 2 months ki.

 

Case 1:  He's offering to give $8000 entirely on w-2.

Case 2:  He's offering $4000 on w-2 and $4000 on 1099.  He mentions this is advantage for me.  

3 questions:

1. Can anyone help me explain case 2 ela better avthundi naku?  
2. Do i need to open LLC or ala in this scenario? or NOT mandatory ?
3. One more thing, That $8000 is somehow consistent even in both cases if you see. But case 2 lo he's not running payroll taxes. Mari 90-10 split enduko?

 

Thanks bhayyas. 

 

You get 9440 per month so take on W2

[mummadi]

2 hours ago, mettastar said:

Additional overhead .. you need to pay taxes on other 4k .. like unemployment taxes etc .. 

Ba. 4000 lo W2 meeda taxes deduct ayi bank lo vache amount vs  4000 ki taxes on 1099 meeda vache final amount are they not same?

Where does it significantly differ.

[mummadi]

2 hours ago, mettastar said:

Ayina 59 ante more than $9k ravali kada

$8k was just an example.  To simplify ala raasa.

[mummadi]

1 hour ago, ImprovedLokesh said:

You get 9440 per month so take on W2

Sure na example lo $4000 was only an example. not the exact number. Can you confirm which is better getting $4000 on w2 (~3k change after usual taxes)  or  getting $4000 1099 and i pay taxes then.  

[ImprovedLokesh]

3 minutes ago, mummadi said:

Sure na example lo $4000 was only an example. not the exact number. Can you confirm which is better getting $4000 on w2 (~3k change after usual taxes)  or  getting $4000 1099 and i pay taxes then.  

W2 anytime on 1099 you have to pay taxes later which is pain in butt 

[mummadi]

6 minutes ago, ImprovedLokesh said:

W2 anytime on 1099 you have to pay taxes later which is pain in butt 

Effective ga naku vache $4000 ki end of the day katte taxes same e na? In this case, im curious why would my employer suggest to get 1099 since he mentioned theres an advantage. Any idea? Is it to deduct any expenses in an itemized way? And to do that LLC undala ? 

[ImprovedLokesh]

3 minutes ago, mummadi said:

Effective ga naku vache $4000 ki end of the day katte taxes same e na? In this case, im curious why would my employer suggest to get 1099 since he mentioned theres an advantage. Any idea? Is it to deduct any expenses in an itemized way? And to do that LLC undala ? 

On 1099 you can quote for some expenses if you own a company so that you will save on taxes but that is not that easy 

[idibezwada]

w2 is better… asalu not sure how he agreed on 90-10 because he will save anything…neku free service chesinatte

[mettastar]

1099 lo aithe some tax write off cheyachanta .. if you have your own company and get paid through that .. 401k contributions atla chala tricks untayi.. 

If you want to do this long term then 1099  .. short term 1,2yrs tharvatha no contracting anukunte go for w2