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Re: In house vs 1099

Im sure you are good at your craft but owning a business is another craft in it self.  If not done correctly, you will be broke before you know it.  

Not all will agree but your gross income will have to be 3 to 4 times what you are making now to keep you same income.  As an employee, (W2) your employer is paying 1/2 of your social security and medicare about 7.5% from you and 7.5% from your employer.  As a 1099 contractor you will be paying the full 15+% of the social security and medicare.  Then you will have insurance payments; you will be required to have General Liability Insurance (5 to 20% of your gross, maybe Workers Comp (2-20% of your gross) and if your employer is paying your health insurance then you will have that too.  Equipment costs; tools, ladder, truck and truck replacement, repairs, computer, meters and meter upgrades, software upgrades.   Office supplies, time for billing, making sure you get paid.  You will need at least 45 days maybe 90 days of operating capital because your first check  won't get to you before that.  You will need a banker that is willing to lend you money if needed, even if you don't think so now, its best to be ready.  You will a lawyer need to Incorporate or LLC.  In todays market I would NOT operate any other way.  You a CPA to make sure you set up you books and file the required reports and forms to the IRS in a timely manner.  There is more but this should get you on the right track.


If all this sounds over whelming then seek other employment where you can advance.

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Posted in reply to: In house vs 1099 by CopperKing
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