1099 employment question

  1. I was offered a 1099 position in another state through a locums company. The company would be paying for my lodging, rental car, uniforms and transportation expenses. The rate was $62.00 per hour. I didn't accept as it seemed to leave me with a huge tax burden. Any thoughts?
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  2. 6 Comments

  3. by   Jules A
    Regardless of if they offered full federal benefits and someone to shovel your cat boxes that is a crap rate and I'd have promptly told they to shove it and to never contact me again.
    Last edit by Jules A on Aug 10 : Reason: On second thought could this possibly be real?
  4. by   DizzyJon
    I'm not sure if that is the worst rate. If it didn't have anything with it, then yes. But, $62 and not needing to pay for lodging or a car. In Cali I've gotten offer's though in the $70's per hour.
  5. by   Jules A
    Quote from DizzyJon
    I'm not sure if that is the worst rate. If it didn't have anything with it, then yes. But, $62 and not needing to pay for lodging or a car. In Cali I've gotten offer's though in the $70's per hour.
    But with traveling the transportation and lodging isn't a perk its a necessity and imo shouldn't be given one iota of consideration toward compensation. Its like NHSC facilities acting as if the tuition reimbursement is in any way a reason to consider a lower rate or an employer saying that their contribution to your share of FICA as an employee is a perk, yeahhhhNO.
  6. by   gmorrisFNP
    Seems a bit low as you will be responsible for all taxes....
  7. by   TammyG
    Your taxes as a 1099 employee will be somewhat higher because you must pay a larger share of your social security tax; normally that is shared by your employer, but now you'll be paying for it all yourself. You also have NO benefits -- no health, 401k, dental, holidays pay, vacation, etc which can amount to quite a lot of money. But, you can deduct a whole bunch of stuff from your taxes which might amount to a sizeable savings. You can find lots of guides to 1099 employment online or in a book store that will spell this all out for you.
  8. by   aprnKate
    Quote from NewbieFNP
    I was offered a 1099 position in another state through a locums company. The company would be paying for my lodging, rental car, uniforms and transportation expenses. The rate was $62.00 per hour. I didn't accept as it seemed to leave me with a huge tax burden. Any thoughts?
    Not a good rate for 1099. so $62/hr so more like minus 4-5 dollars per hour because you are paying taxes on your own. if you are 1099 you are considered a sole proprietor so if you get sued, your personal assets can be taken. You could create a LLC or S corp (your own company) and then have your company subcontract for the 1099 locums company you are planning to go with that way if someone sues you then your company's assets are the only assets that are at risk, not your personal assets. You can work for your company as a W2 as well. Talk to a CPA on how to set this up and make sure you find a CPA that is also a good tax strategist. When you are 1099 sole proprietor you are going to pay about 35-40% taxes because you are considered a business/self employed NOT an employee. If you create your own company, you can be an "employee" of your company because you as an "employee" is considered a separate entity from your company. Your company can pay your medicare and other taxes (which your CPA should help you calculate) like a W2. But your company which is a separate entity does not have to pay all those taxes, just have to pay company tax/franchise tax if it applies. at the end of the year, you file a separate tax for you as a W2 employee and a separate tax for your company (which you can deduct a lot for) and then at the end of all this you can get a distribution of your revenue from your company at the end of the year since you will most likely be a shareholder or president of your company. I don't know everything but I read a lot. I highly suggest talking to a CPA about it and make sure to pick a good one. I've done locums as a W2 and locums as 1099. Its not necessary to have a company as 1099 but it does have some perks.

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