Hi,

I am on my EAD(Green card) and working as an independent consultant for a company in Bayarea. I get 1099 for my tax purposes. I would like to know

1) Will I end up paying more taxes than I would have paid on W2.

2) If I open my own corporation, does it help any better to save taxes?

3) What is the process to open a corporation?

4) What are the ways to save taxes on 1099?

Thanks,
Nitu

1) Probably. You are required to pay self-employment taxes at 15.3% of your net profit. The employee's share of FICA (Social Security and Medicare) taxes is exactly HALF that (at 7.65%), which means you are pay BOTH the employer's and employer's share of the FICA taxes.

2) Possibly, but setting up a corporation usually requires an attorney to do it right. It depends a LOT on the nature of your work.

3) Whole books have been written about setting up corporations. MUCH too complex to address here.

4) Again, depends on the nature of your work. There are common deductions available to you (business use of your cell phone, office costs, business use of the home, etc.), but each has its own record-keeping requirements.