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change from w2 to 1099

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  • change from w2 to 1099

    I’m an associate at a small private practice and w2 employee two years out of residency. i recently paid off my student loans (180k)! Additional funds go to a back door Roth IRA, brokerage account, HSA, 529, and a high-yield savings account. I am relatively happy with the practice.

    Unfortunately there is no retirement plan for the practice. I am considering requesting to change from a w2 to a 1099 contractor for year 3 (new contract), primarily to set up a solo-401k, as well as take advantage of the 2018 tax law changes.  My initial contract was a salary; new contract will have a lower base salary but include production bonuses (ultimately increasing total compensation). My hours and time off are more flexible due to the salary changes (eg I can take off more time as long as i cover base salary).

    Few questions:

    1. is changing from w2 to 1099 reasonable/allowable by the IRS while at the same office?

    2. besides requesting an increase in compensation to cover employer portion of FICA, is there anything else I should request?

    Thanks in advance!

  • #2
    Very strict rules for 1099 and unless the language in your contract significantly changes (eg they have significantly less oversight of you, your scheduele/hours etc) this would probably be seen as a red flag by the irs.


    • #3
      Don't see how you'll change.
      Get the practice to start a plan.