is anyone (or dh) an independent contractor?

jtbmommy

dh was laid off in July and just offered a 4-6 week contract. It could lead to more, but it is an an independent, not a full time employee- hence no benefits, hourly rate, no 401k, etc. He is taking as it is something for now and I carry full benefits, but it looks like mnay jobs in his field are this way. IF we were to decide to have another baby and this is what he did for a few years, how does health care work, etc? He would have to find how own if I were on mat. leave.

Also they suggested he create an llc to help deduct certain expenses. This is alll very confusing to me! 

veloelle

I used to be an IC. You have to pay and keep track of all your own taxes, as if you are an employer and employee since as an IC, you are self-employed. For example, as an employee, your employer pays FICA. As an IC, you pay all of that. Seriously, I was writing a $15,000 check at the end of the year for my taxes. Typically you make quarterly or yearly payments.

As an IC, you can deduct things you typically can't as an employee. Things like cell phone (% of your monthly bill that's work related), mileage to job site (NOT office, off site work only), square footage of your homeoffice if you don't have a permanent office. Talk to an accountant-they can give you the low down.

Long term if that's how is industry is, yes, I would create an LLC. Again, an accountant or tax atty will really help you. You can esentially protect yourself a lot more and structure so you aren't paying an arm and leg in taxes.

As an IC, you work for yourself, so if you want to quit, he'd have to get an independent health care plan. If you carry the health care, there shouldn't be an issue there; he'd join your plan. On mat leave, you still have a job and are still covered under your health plan, unless you quit.

jtbmommy

We are def. meeting with an accountant because I do not want to F this up.. Also, we are concerned that setting up an llc could effect the possibility of getting unemployment if this ends in 4-6 weeks. Right now, they said we just reopen the claim we filed last month no prob. 

If I took more than my fml (as a teacher they hold my job for up to 2 years), I lose insurance. I can cobra, but I know that is $$$.

Right now I hate being a grown up! 

veloelle

It's my understanding you can be employed less than 6 weeks and not have it affect your unemployment. I don't think the LLC has anything to do w/ that. But I'm not an atty.

So if he thinks this will not last, he should make sure the independent contractor gig ends at 5 weeks 6 days to be safe.

And def be aware of paying all your own taxes. IC salaries seem so much higher, but a lot of that is going to pay your own taxes.

GL.