I graduated in June 2009 and am now on F-1/OPT till August 2010. I am starting work shortly. I can be employed as a full time employee or as a consultant.

1. What is better from a tax perspective?
2. Is it right that as a self employed person / consutant - I will not have to pay FICA. Does that mean my effective tax is less in this case?
3. What are the disadvantages of being a consultant vs full time employee.

Thanks

K

On F1 you are exempt for 5-years and your income is not subject to FICA taxes so take home income will be same in both the cases.

An employee gets W2 and an independent contractor gets 1099-misc. The advantage of getting 1099-misc is that you can directly deduct your business related expenses on schedule C or C-EZ. On W2, you can take business related expenses only as itemized deduction However, as a contractor you may not get many benefits that employees get.

Read: Your U.S. Tax Return: W2 vs 1099-Misc: Employee vs Independent Contractor.