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    persephoniekali's Avatar
    persephoniekali Posts: 1, Reputation: 1
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    #1

    Mar 17, 2011, 04:27 PM
    Self-employed vs. employee
    I am working part-time for a previous employer. I now live in California (previously Texas) and am telecommuting. I am trying to find if it is more beneficial to be self-employed or an employee. Can I write off things like internet service, etc. How would I go about filing taxes, etc. if self-employed is the better option?
    ?
    excon's Avatar
    excon Posts: 21,482, Reputation: 2992
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    #2

    Mar 17, 2011, 04:35 PM

    Hello p:

    I don't know if one is more advantageous than the other... Yes, there are certain home office deductions that you can take, but you'll be paying BOTH sides of your social security - the employer & the employee, and you won't be eligible for unemployment if your "contract" runs out. Filing taxes is pretty easy. You just fill out a schedule "C" to come up with your income instead of relying on W-2's.

    Your employer/contractee would probably LOVE to pay you as a contractor instead of an employee.

    excon
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,301, Reputation: 7692
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    #3

    Mar 17, 2011, 08:06 PM

    Internet, is it just for business or is it your home internet also. Will there be a room just for business, not kitchen table, not desk in a corner of another room ?
    Will there be a telephone just for that business.

    Those are some of the issue as to being able to claim some expenses.
    Next of course as a self employed, you have to pay the additional tax normally paid by the employer, so the amount they pay, needs to be much higher to you, and should be since they are not liable for many costs they have to pay as a employee.
    Also as self employed, you can not get unemployment if things end.
    joypulv's Avatar
    joypulv Posts: 21,591, Reputation: 2941
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    #4

    Mar 18, 2011, 10:18 AM
    You will pay 15.3% Social Security (SCH. SE) instead of 7.65%.
    You should add more than 7% to your hourly rate, however, for that and the other reasons people mentioned.
    You will try to offset it with as many deductions as you can on SCH. C. (Working at the kitchen table is not office space.)
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