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    me_kalyan111's Avatar
    me_kalyan111 Posts: 8, Reputation: 1
    New Member
     
    #1

    Mar 13, 2006, 07:30 PM
    Incorporated Vs 1099 Contractor
    Hi

    I am trying to know the differences in tax that an individual would pay as an independent contractor vs being incorporated.

    I am on OPT now and would convert to H-1 in OCtober. I got an offer from a company and would like me to be incorporated. My total estimated income would be close to $60,000.

    What about the self-employment taxes?

    Would I save more on taxes being incorporated?

    I am fairly new to the world of contracting... Please help me out?

    What about the deductions in both cases?

    On a 1099 Misc would I be liable to pay federal, state, medicare and social security?


    Please Advice...

    Can I legally be incorporated as a non-resident? (Student on F-1 Status)

    Thanks in advance.

    Babu
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,305, Reputation: 7692
    Expert
     
    #2

    Mar 13, 2006, 09:36 PM
    You need to sit down with a tax attorney, Corporations are very good sp is you have a lot of personal assests you want to protect.

    Remember the money that your corporation takes in is mot your personal money, your coporation would have to then pay you. So you would be paying taxes for the profit that the corp earns and also taxes on the money that the corp pays you.

    Each state has its own incorporation laws and rules, and you don't even have to incorporate in the state you live in, as long as you have an agent in the state where you incorporate.

    A long visit to a tax attorney or an attorney that does incorporatoin is called for here
    me_kalyan111's Avatar
    me_kalyan111 Posts: 8, Reputation: 1
    New Member
     
    #3

    Mar 14, 2006, 08:33 PM
    Thanks for the reply chuck. I would consult a professional on this. Thanks Once Again
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,814, Reputation: 846
    Senior Tax Expert
     
    #4

    Mar 14, 2006, 08:44 PM
    I agree with FR Chuck's presentation.

    I have nothing to add.

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